Futures Magazine September 01, 2007
Breaking News
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Mid East money looks to Europe
One of the most popular panel discussions at this year’s Burgenstock Meeting in Montreux, Switzerland, focused on how to service the Middle Eastern customer – something a slew of new wannabe exchange
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Subprime flu catching
Bear Stearns topped the list on the U.S. side of the Atlantic, and industrial bank IKB topped the list on the other. In a letter to investors sent out in July, Bear Stearns said that as of June 30,
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SECandal
The SEC apparently sandbagged an investigation into insider trading and fired one of its attorneys for aggressively pursuing testimony from the politically connected head of Morgan Stanley, and then
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Nymex launches ethanol swaps
The New York Mercantile Exchange has launched two new ethanol swaps contracts to compete with ethanol swaps on ChemConnect, which was recently acquired by the Intercontinental Exchange (ICE) and CME
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CBOE ERPs waiting on SEC
Depending on whom you speak with, the Chicago Board Options Exchange (CBOE) may have scored some early points in its battle to end exchange-right privileges (ERPs) held by some members of the Chicago
Software Review
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Applied Reality Trading System (ART) by TradersCoach.com Inc.
Recommended System: Windows 2000, Windows XP, Vista 2.6 GHz Pentium 4 or compatible, Monitor(s) with 1024x768 resolution, 1 GB RAM (512K RAM can be used but not with multiple charts or programs open
Trading Techniques
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Using one time-based trading
Strict mechanical traders don’t allow emotions to contaminate their order execution, but that doesn’t necessarily mean they feel comfortable about what they’re doing. In some ways, systematic traders
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Calculating yields
Eurodollar futures yields may be computed for any of the 40 quarterly maturities listed by the Chicago Mercantile Exchange. For example, the yield for the 10-year maturity used to compare Eurodollar
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Taking momentum to the bank
By definition, day trading is short-term. That is, the entire trading cycle is completed within the course of a single day or trading session. Given that constraint, prices must move quickly to
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Using spreads among Eurodollars, T-notes and cash Treasuries
During the first week of June 2007, the interest rate market experienced something it hasn’t seen for over a year and a half — a significant increase in Treasury yields. Results from this change
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Arb opportunities in forex
Exploiting arbitrage opportunities in spot forex markets is a rare enterprise available to retail investors. Trading on the prices of multiple market makers and on firms providing “no dealing desks”
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Scalping option gammas
Consider this market scenario: Treasury bond futures are in a period of low volatility, with a daily range of half a point or less. The options on these futures are trading at historically low
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Option trading facts
One of the most frequent questions that comes up in options seminars is: What is the correct interest rate to use when calculating theoretical option prices and implied volatilities? The answer:
Technology & Trading
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Creating your own weather contracts
Weather is nothing new, nor is hedging its risk. The over-the-counter (OTC) weather market has been around since 1997, and the Chicago Mercantile Exchange’s (CME) weather futures and options
Forex Trader
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Trading FX options
The spot forex market is a mixed chemistry of price action reflecting global interest rates levels and directions in and between countries. The forces that cause changes in the value of a currency
Futures 101
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Forex, trade and politics
You don’t need to be an Einstein to understand that everything is relative. Whether we are talking about being early vs. being late, or being cheap vs. being expensive, you need a point of reference
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A look at currency pairs
Forex traders buy and sell currency pairs on the assumption that they will make money as the value of one currency increases relative to the other. The first currency listed in a currency pair is
Industry Trends
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The E.U. Approach to Hedge Fund Regulation
In July, the Financial Times reported European prime brokers were reeling in the leverage and loans granted to offshore hedge funds, and you can bet that somewhere, U.K. regulatory boss Callum
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Europe: Beyond the big two exchanges
European regulatory agencies often resemble a slow-motion squadron of precision flyers in formation: everyone working towards the same goals, each with an eye on his wingman. There’s even an element
Markets
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Bottom line: Has dollar bottomed?
The U.S. dollar got slammed in the first half of 2007, especially in July when the euro and pound sterling reached multi-year highs against the dollar. Most of the analysts we spoke with agree the
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Fibonacci/Lucas numbers showing opportunities in S P 500
September promises to be interesting as several long-term technical setups can create significant moves. The methodology, described in the September 2006 and May 2007 issues, utilizing
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Unwinding the yen carry
In a yen carry trade, a trader borrows Japanese yen at low interest rates and invests the principal in a higher yielding currency. As long as nothing happens, the trader earns the interest rate
Editor's Note
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Protecting the markets from systemic events
What a difference a few months can make. In June, I heard a speech by Anthony W. Ryan, assistant secretary of the U.S. Department of Treasury, who spoke to the Managed Funds Association about the
Market Analysis
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Gold has started tracking stocks and has put in a near-term low
With the U.S. dollar hitting a 10-year low and with a rocky equities market, you might expect gold to explode to the upside. Instead, gold has started tracking stocks and has put in a near-term low,
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Despite drop, crude still in uptrend
Despite an $8 per barrel drop in early August, the crude oil market is still in an uptrend, says Thomas N. Hartmann, analyst for Altavest Worldwide Trading. “We’ve got relatively stable demand and
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Dow Jones futures have been extrmely volatile
Dow Jones futures have been extremely volatile, the chart shows about one dozen 100-point moves within a half-hour in the second week of August. “The put-call ratio is about the highest it’s been
Managed Money
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SEC adopts anti-fraud rule
The Securities and Exchange Commission (SEC) in July voted unanimously to adopt a new anti-fraud rule under the Investment Advisers Act it claims will clarify its ability to bring enforcement actions
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Amaranth: A year later
While the huge implosion of hedge fund Amaranth Advisors was a dramatic event — particularly for shareholders — and an embarrassment to the large institutions counted among its investors, it did not
Options Strategy
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Intrinsic options
Intrinsic options have strike prices that are in-the-money. If the December gold futures contract is trading at $690 per ounce, the December gold $670 call option is in-the-money, or intrinsic for
New For Traders
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New for Traders
Fimat has established Professional Trading Group Solutions, offering global clearing, execution and financing services across all asset classes for professional trading groups worldwide and offers
People
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Sir Bob Reid to lead ICE Clear Europe
“It is with great pleasure that I have taken on the role of Chairman of the new ICE Clear Europe,” Reid says. “We are proceeding at full throttle to put in place the systems, processes and procedures
News
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Redefining the “Top 50 brokers”
The futures industry is living through one of the most challenging and dramatic evolutions in its history. Consolidations, the fading of open-outcry and technology platform integrations are, only the
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Jumping Jack O’Bannion
One of the best pit traders I ever knew was Jack O’Bannion. But Jack was one of the shortest locals at the Chicago Board of Trade (CBOT), and short usually didn’t cut it in the pits. In the bond
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Fishing for the next IPO
Mark G. Bagan, president and CEO of the MGEX, attributes the increase in value to the effectiveness and execution of their business plan, but another key factor is the growth in the value of
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CFTC to look at ECMs
The Senate Permanent Subcommittee on Investigations concluded in its report on Excessive Speculation in the Natural Gas Markets that excessive speculation contributed to rising energy prices and that
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International news round up
China looks set to begin trading futures on the Shanghai-Shenzhen 300 index in September now that the China Securities Regulatory Commission (CSRC) has licensed more than 40 brokerages to trade on
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NFA suspends Lake Shore
The National Futures Association (NFA) has suspended Chicago-based Lake Shore Asset Management Ltd.’s NFA membership; and Lake Shore may not solicit participant funds or place trades until it is in
Trader Profiles
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Khan Noorpuri: Perfecting option writing
Ansbacher Investment management (AIM) was already one of the oldest and most successful option writing commodity trading advisors in 2002, so there was some risk involved when founding principal Max
