The theoretical futures price represents an expected price at expiry. When this price which can either be at a premium or discount deviates significantly from the spot price of the underlying asset, a natural market correction occurs driven by supply and demand forces. 

Consider an instance where an underlying asset’s price significantly exceeds the futures price. This creates an attractive opportunity to purchase the seemingly cheap futures contracts instead of the expensive physical asset and close the position at expiry by taking delivery of the underlying asset.

This increased demand for futures contracts pushes its price upward towards the asset’s price level. Simultaneously, the high price becomes unsustainable as users opt for the more affordable futures contracts. 

This shift in demand exerts downward pressure on the physical price, ultimately pushing the spot price of the underlying asset and the futures contract towards a state of convergence, or a balanced equilibrium prior to expiry. This highlights the critical role of the cost of carry in aligning futures prices with the expected future physical price.