Futures Magazine June 01, 2008
Cover Story
Don’t go against the grains
As we enter the growing season there is a certain unease among grain traders who are increasingly being held accountable for the rapidly rising cost of food. With historically high acres in
Breaking News
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Regulator gets an earful
The Commodity Futures Trading Commission (CFTC) got an earful from hedgers during an April forum in Washington D.C. to collect information on price discovery and record spikes in volatility in the
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India, UN send mixed signals
As surging food prices spark riots in parts of the developing world, mixed signals are emerging from both the United Nations and the Indian government on the role of markets in the pricing and
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Energy exchange members want more, more, more
It would take just 204 New York Mercantile Exchange (Nymex) members voting ‘no’ to kill the proposed merger with the CME Group, and several recent developments indicate that is increasingly likely.
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MF's wild ride
It has been a rollercoaster couple of months for futures commission merchant MF Global and this has been perfectly illustrated in their segregated funds as reported to the CFTC. MF saw their total
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Tone Grant convicted
In mid April, former Refco owner Tone N. Grant was convicted of all five charges related to the $2.4 billion Refco fraud. He faces 85 years in prison. Grant and former CEO Phillip R. Bennett staged
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International news
The validity of the London Interbank Offered Rate (LIBOR), to which hundreds of trillions of dollars in loans are pegged around the world, is being investigated by the British Bankers’ Association
Software Review
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LaPorte Asset Allocation System
LaPorte software is designed to help you select investment managers, including CTAs and hedge fund managers, by allowing you to review fund managers’ track records. The software allows you to subset
Trading Techniques
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A Black-Scholes peek at futures prices
For futures contracts, option-pricing models provide a significant source of information on the market consensus regarding price movements until expiry. Given the quantity of price information
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Reaping profits with regression analysis
If you trade corn, you know the top chart shown in “Light on their feet” quite well. The extent to which prices have moved during this six-month period has been historic in its scope. However, the
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Decaffeinating portfolios via volatility
Most traders consider sophisticated option strategies complex financial instruments, designed for pros only. As such, these techniques are often overlooked as a way to tap changes in volatility as a
Technology & Trading
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Putting the Russell on ICE
The Russell is in for a major shake-up in September when Russell 2000 (full and E-mini) contracts traded at CME Group go off the board and the only place to trade Russell 2000 futures will be the
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Trade management: You need a plan
Old ideas about trading have been lost in the wake of technological development. At one time, what we knew as money management was the end all of trader sophistication, not to mention something many
Forex Trader
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The geometry of opportunity in forex
Now that the Federal Reserve has lowered the Fed Funds rate to 2%, currency pairs will be adjusting to a new set of expectations. In forex, money always seeks to gain an edge by resting in currencies
Editor's Note
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Food for thought
It’s an awfully cold government that won’t allow relief supplies to get to its citizens in need, especially when thousands already are dead and many more could expire due to an inability to get food,
Book Reviews
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Timing Techniques for Commodity Futures Markets
Colin Alexander assumes the reader is new to futures trading, so he covers the basics at the onset. This is where I got my first inkling that this book was more than just another “milk-for-profit”
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Trading Catalysts: How Events Move Markets and Create Trading Opportunities
Robert Webb’s premise is that by analyzing past events and learning how markets reacted to them, investors and traders can reap rewards when future major events occur. Webb provides a detailed look
Managed Money
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Lake shore exec takes a powder
On April 24 the U.S. district court in Chicago entered a default judgment against Philip J. Baker and the companies he controlled, including Lake Shore Group of Companies Inc., 12 Lake Shore
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Soybean corrections offer opportunity
Volatility is the buzzword for sellers of options on any market. Price volatility can create opportunities on both sides of the market and the investor who knows the underlying fundamentals will have
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Meet the new boss, same as…
It is an argument that has been going on as long as there have been trend followers and as long as there have been drawdowns. Does trend following really work? Have markets changed, making trend
New For Traders
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New for Traders
The New York Mercantile Exchange introduced a certified emission reduction options contract. The contract will be priced in euros with a minimum price fluctuation of euro 0.01 per metric ton.
People
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Szczech named CEO of RJO Futures
Mark Hemsley was named chief executive and Paul O’Donnell was named chief operating officer of BATS Trading Europe. Hemsley was previously CIO at Liffe, and O’Donnell was an executive director at
Futures 101
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Ins and outs of commodity options
Due to strong demand, rising fuel and input costs and restrictions on world exports, agriculture markets have experienced record volatility in recent months. One way to profit from price volatility
Industry Trends
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European clearing: The tangled web
On April 15, as Americans were scrambling to get their tax returns in the mail, an op-ed letter written by London Stock Exchange (LSE) boss Clara Furse appeared in the Financial Times, criticizing
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ECX flying high with offsets
One of the biggest stories in clearing and settlement last year was the impact on the European Climate Exchange (ECX) of ICE's decision to leave LCH.Clearnet and start up its own clearinghouse,
Markets
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Tech Talk: Falling wedge in wheat
Analyzing charts should always start with price. The first thing to determine is whether price is trending or in a period of range consolidation. Major support and resistance levels should be
Market Analysis
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Sizzling rice
Just about the time short sellers were bailing out of the rice market, a cyclone devastated Myanmar creating a huge humanitarian crisis, having struck the heart of that county’s rice producing
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Slippery climb
“It doesn’t make much fundamental sense,” says Andrew W. Waldock of Commodity and Derivative Advisors LLC. “The strategic reserves are almost full,” and we are nearing contango. “We should be seeing
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No yen for risk
The Japanese yen is wilting again, primarily due to U.S. dollar strength, says Jason Yu, chief currency strategist for ODL Securities. He says former Fed chief Alan Greenspan’s recent comments that
News
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Sens. stir up energy regs
Congress announced an agreement on a final Farm Bill on May 8 that includes an act to reauthorize the CFTC, and one measure in the bill is turning up the heat on energy market regulation and the
Profiles in Forex
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Agustin Silvani: Unlimited Opportunities
Agustin Silvani, head of trading at MIGFX, was drawn to forex trading because of the unlimited opportunities he saw. Prior to joining MIG in 2001, he worked for consulting firm Cambridge Associates,
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Big Figure Trade: Smart money play
With the amount of manipulation and inefficiencies in the market, long-term currency forecasting is difficult. Instead of trying to determine where the euro will be a year from now, retail traders
Trader Profiles
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Linn: Reaping years of experience
Gordon Linn started working in the cash grain business in Des Moines, Iowa and figured he would return there. But after coming to Chicago in the early 1970s to hedge for Lincoln Commodities, he found
