What Premium and Discount Mean
Premium = how far the token trades from its fair value.
Fair value is not always "the stock price": for total-return tokens (dividends reinvested), fair value = r̂ × stock price, where r̂ is the accrual ratio. Hence the single formula used across this site:
premium = token price ÷ (r̂ × stock price) − 1 (price-tracking assets have r̂ = 1)
- +2% premium: you pay 2% extra for the same share value — absent a special reason, don't overpay;
- −2% discount: on-chain is 2% cheaper — but whether you can capture it depends on costs.
From premium to net edge
Charging into a −2% discount often nets you nothing, because your real costs include:
- Platform fee (0.5% by default on this site, shown in the swap panel);
- Price impact: your own order pushes the pool price — $1,000 and $10,000 impact very differently.
Our signature column is therefore net edge = (−premium) − (fee + impact). Only a positive net edge means "buying on-chain beats the fair price, executably, right now."
Why premiums exist
- Closed markets: stocks stop trading, chains don't; news and sentiment keep repricing tokens;
- Thin liquidity: shallow pools let a mid-size order push prices by percent (an extreme case: AMZNX was once pushed ~100× off fair value by a small buy);
- Mint/redeem friction: pulling prices back requires eligible arbitrageurs with time and cost;
- Regional demand surges.
Why closed-hours spreads are not free money
You see TSLAx at a 3% discount while the market is closed and think "3% at the open"? Three problems:
- No hedge available — the 3% is measured against the last close, not a price you can sell at;
- Gap risk — tomorrow's open may be down 5%, flipping your discount into a premium;
- You are not alone — arbitrage capital erases the capturable part before the open.
That is why closed-hours premiums display as grayed "reference premiums" and never trigger alerts by default. Information, not opportunity.
FAQ
- What is the difference between premium and net edge?
- Premium is the raw deviation of the token from fair value (r̂ × stock price). Net edge subtracts the platform fee and the price impact of your size — the executable measure of whether buying now is actually worth it.
- Why do some assets show 'calibrating'?
- New total-return assets need about five trading days of intraday data to estimate the accrual ratio r̂. Until then premiums are computed at r̂=1, are indicative only, and never alert.
- Is a negative net edge a hard no?
- It means buying on-chain costs more than fair value right now. If you value 24/7 liquidity or DeFi composability, paying a measured cost can still be rational — just pay it knowingly.
- Will a closed-hours discount still exist at the open?
- Not necessarily. The open can widen, shrink or flip it. Closed-hours spreads measure sentiment against the last close — they are not lockable profit.