Futures Magazine June 01, 2007
Trading Techniques
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Penny priced options keep things rolling
The Penny Trading Pilot program started in January 2007 with all option exchanges supporting penny-priced increments on the options of 10 stocks and three exchange-traded futures (ETFs). Penny
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All options are not created equal
All options share certain attributes. The characteristics and most mechanics of options are universal. For example, both options on stocks and options on futures are derivatives and they both have
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Eurodollar bookends
Yields on Eurodollar futures are continuously adjusted to form curves that are approximately parallel to the U.S. Treasury yield curve. The space between the two curves is attributed to a credit
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Advanced option trade management
In the previous two parts of this series on managing position risk in options, we have presented some fairly simple, but effective, techniques for hedging. These included simply exiting the position,
Technology & Trading
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System trading: tale of two traders
During our series on automated trading systems, we’ve compared and contrasted buying an off the shelf system with building and testing your own trading system. In this final part of the series, we’ll
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Spreading grains into the 21st century
During the last 20 years, many traders, from the smallest retail accounts to the largest hedge funds, have focused their trading interests on the development and execution of mechanical trading
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PhotonTrader Version 6.02 by Futurepath Trading
Once in a while a product comes along that does one thing and does it well. PhotonTrader is just such a product. Whereas many futures order entry systems on the market attempt to be all things to all
Forex Trader
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The DJIA-currency connection
The Dow Jones Industrial Average Index’s recent historic highs have brought great fanfare. We need to ask: Are there deeper intermarket implications in this milestone, particularly for forex traders?
Futures 101
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It’s all Greek to me
To make money consistently by trading options, it’s important to understand how options prices move and what moves them, because as many beginning traders will attest, it can be very frustrating to
Industry Trends
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Asia: Almost here
“Contrary to that book by Thomas Friedman, the world is not yet flat — at least not in Asia,” laughs Foo-shiung Ho, the former Chicago Board of Trade (CBOT) economist and head of the Taiwan Futures
Markets
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Following the numbers in grains
The most important number in all the grain markets is a big one — 11.635 billion. That’s the United States Department of Agriculture’s (USDA) estimate of the bushels of corn to be used in the 2006-07
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Indexes making all-time highs
By the end of April of this year, there was a pleasant surprise for most market observers. The market was at new all-time highs — at least the Dow Jones Industrials, NYSE Composite and the
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Outlook of interest rates uncertain
Although the economy has slowed and downside risks have risen, those clamoring for an easing of monetary policy may still have to wait. In fact, there is no guarantee the Federal Reserve’s next move
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Tech Talk: Where’s the top in corn?
There have been 10 major bull moves in corn futures since 1977. A lot of money has been and can be made in the bull market we are currently in. Using Elliot Wave and Swing Theory technical tools,
Editor's Note
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Doing and teaching
In our efforts to expand into cyberspace, we recently held a “virtual” trade show, the I-Trade show. This online expo debut was April 17 to 18 and like any show had both speakers and exhibitors. But
Breaking News
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eSpeed bumps ahead
When Tullettt Prebon Plc’s $12 per share bid for eSpeed was rejected in mid April, a bilious geyser erupted, with shareholders demanding to replace board members, retain an independent auditor to
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Carbon trading soars
London-based holding company Climate Exchange, which owns both the Chicago Climate Exchange (CCX) and the European Climate Exchange (ECX), lost 10 times its revenue in 2006 but things are looking up
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Exchange buying mania
At the Chicago Mercantile Exchange’s (CME) shareholder meeting in late April, CME Chairman Emeritus Leo Melamed remarked that the United States must consider the implications of no longer being the
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Eurex SSFs on the march
Volume on Eurex’s single stock futures (SSFs) long ago passed Spain’s MEFF exchange and this year is running ahead of Euronext.Liffe — despite Euronext.Liffe launching its SSFs in 2001, while Eurex
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Make it sweet-sour
In fact, there will be two: ICE announced it would launch a cash-settled contract from London on May 21, and the Dubai Mercantile Exchange (DME) had a physically-settled product scheduled to launch
Book Reviews
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Beating the Financial Markets: Combining Small Biases into Powerful Money Making Strategies By Art
While there are more in-depth books on the subject, Collins lays out a soup to nuts approach to give the reader a clear blueprint to creating trading systems. The book utilizes a building-block
News
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International news
Canadian data-broker Thomson Corp. in May made an offer to buy Reuters, the 156-year old London-based news service. The same week News Corp. Chairman and Chief Executive Rupert Murdoch approached Dow
Market Analysis
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U.S. Dollar Index looking for strength
The U.S. economy is in an abnormal position. “We have had four quarters of sub- 3% growth, with an average of 2.1%, if you include the first quarter of 2007,” observes Joseph Trevisani, chief market
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DJIA at all-time highs
“The market has priced in all the good news available,” says Carley Garner, senior analyst at Alaron Las Vegas. “We had a run up in anticipation of earnings, and the market has priced in a Fed funds
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Sugar prices headed lower
Just over a year ago, sugar was trading near 19¢ per pound, a 25-year high. “The high prices encouraged expanded output and the weather improved tremendously in several of the key areas where their
Managed Money
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Market neutral CTA
Scalar Funds Management LLC is a bit of misnomer. The new commodity trading advisor (CTA)/registered investment advisory does not offer any funds, it offers managed accounts on a market neutral
People
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Peter F. Karpen joins Martello
Thomas Eichelmann has been appointed chief financial officer of Deutsche Börse AG. Previously he was a partner and member of the executive board at Roland Berger Strategy Consultants. Prior, he was a
Trader Profiles
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Lixia Li: Trading the S&P intuitively
During that time she became a Chartered Financial Analyst (CFA) and took an interest in the futures markets in general and the S&P 500 in particular. She found the S&P trended well and was easy for
