Futures Magazine October 01, 2008
Cover Story
How the energy landscape will impact the election
In the first six months of this year the moves in oil were just stunning. Oil surged from around $91 per barrel to a high of $147.24, the biggest six-month move in the history of the oil market. The
Trading Techniques
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The Law of Selective Gravity
There is no way to sugar coat it: Current economic conditions have the earmarks not only of a severe U.S. recession but—dare I say it—the potential of a global depression. That is about as dire as it
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The market itself was the revolution
Any discussion of the innovations most responsible for change in the futures and derivatives markets should begin with financial futures in general and Treasury futures in particular. Financial
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Electrification of markets
Aclick of a mouse is all it takes to trade a market. Like the toddler in the E*Trade commercial demonstrates, electronic trading provides unprecedented access by anyone at anytime to a multitude of
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Automated high frequency retail trading
The growth in the electronic trading of stocks, futures and options and the accompanying increase in volume, lower commissions and speed of order execution have created market data networks that
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Product development in the age of indexing
It is hard to believe, but equity indexes (and futures and options based on them) became a commonly used investment tool only 25 or so years ago. As more and more investors began to apply indexes to
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The data delivery revolution
I began trading the futures markets in the late 1970s. The only data source available for trading was daily charts, usually purchased from a vendor and updated by hand. Technical analysis consisted
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Forex story: Only the strong survive
In the “old” days, say 10-15 years ago, the foreign exchange market was the playground of big banks and multinational corporations. Few looked behind the curtain as the deep, liquid market was a
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Exploiting relationships in metal futures
Option values depend primarily on time and volatility —enough time for prices to vary and sufficient price volatility to make time worthwhile. Options on metal futures reflect these valuation
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Not so fast
In algo trading, in its purest form, a software program takes your money and, like a human money manager, decides how and where your money is traded or invested. It will look at opportunities around
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Using net flow value for algo profits
This article is the second part of a two-part series on algorithmic (algo) trading. Algo trading is about using computer automation to move money to take advantage of the best opportunities. The
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Trading the election
The question is, how do you profit from the election? Keep in mind some basic trading concepts, such as the market is always right, and in almost all cases, supply and demand, known and unknown, is what moves price.
Technology & Trading
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Coal conundrum
Converting coal to gasoline is not a dream. Constructed by the Carbide and Carbon Chemical Co. (later to become Union Carbide), the Institute plant in West Virginia could process 300 tons of coal
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Crude companion
Crude oil is not that useful in the form it comes out of the ground. It requires a lot of processing to make it into the products that we all know and love. Nor is all crude oil the same. Different
Forex Trader
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Forex trading and the U.S. elections
This month represents the quadrennial opportunity for forex traders to trade the U.S. elections. The election campaign is fast approaching its apex and all markets are paying closer attention to the
Futures 101
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Trading with trendlines
When you buy or sell a futures contract, you generally expect to make money by price subsequently rising or falling. The longer and quicker price rises or falls, the more money you make. In the best
Industry Trends
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Indian exchanges: The electronic silk road
Among other things, Jignesh Shah knows his numbers and his history. “In the 16th Century, India accounted for 15% of world trade and 50% of world GDP,” he says. “At present, India’s share of world
Markets
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Tech talk: Trading in dangerous times
For a long time commodities in general and crude oil in particular seemed to go up every day. Crude oil had a parabolic rally for the first six months of the year. Of course the key to keeping those
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Metal bull getting heavy
Whether traded on Comex in New York or on the London Metal Exchange, base metals are priced in U.S dollars, and the relative value of the U.S. dollar has an enormous affect on prices. During this
Editor's Note
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The party's over
A funny thing happened on the way to $200 a barrel oil. The price touched $147.27 and fell back to around $100 per barrel. (Who knew speculators had such power?) And though the danger of expensive
Book Reviews
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It’s When You Sell That Counts (Third Edition)
There are only a handful of books published on when to sell a stock. Pinpointing the time to sell turns out to be very critical to an investor’s or trader’s ability to make money. It is a hard skill
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Technical Analysis Tools: Generating a Profitable Trading System
Most books on technical analysis do not offer much in the way of new or innovative techniques but rather cover the standard approaches from different perspectives. Tinghino’s book falls in between
Market Analysis
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30-year Treasury bond futures jump
Since late July, 30-year Treasury bond futures have rocketed from 114 to near 120. Jack Broz, president of the Marlin Letter, explains firms bought new paper at a yield of 4.7% and pushed rates up
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Euro drops
In mid-July, the EUR/USD was trading at 1.6038 and crude oil was $147 per barrel. Now the economic slowdown has gone global, oil prices have collapsed and the once mighty euro has dropped to 1.40.
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Decent wheat futures
Since trading as high as $12.84 per bushel in March, December wheat has retreated to below $8. “Domestically we have increased our ending stocks,” which are 574 million bushels compared with 306
Breaking News
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CBOE, CBOT settle
A decades long battle between former members of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) over exercise right privileges (ERPs) again approached its conclusion
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Nymex says yes
The deal consolidates more than 98% of the U.S. futures market at CME. Initially Nymex members balked at the amount of the bid, which valued Nymex at $120 per share, below a then recent high of $130.
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Macquarie buys Shatkin Arbor
Shatkin Arbor Inc., the Chicago-based futures broker and clearing firm, has been purchased and will be integrated with Macquarie Futures USA Inc., a New York-based futures commission merchant (FCM).
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From ECNs to exchanges
Two major electronic communications networks (ECNs or so-called dark pools) moved closer to the light of full exchange status when BATS Trading received SEC approval for exchange status and Direct
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New York metal
NYSE Euronext (NYX) launched its futures exchange, NYSE Liffe LLC, and precious metals trading began in early September. Contracts included 100 oz. gold futures, 5,000 oz. silver futures, options on
Managed Money
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CFTC issues report on index traders
Seeing all the reaction following the release of the Commodity Futures Trading Commission’s report on “Commodity Swap Dealers and Index Traders,” I felt like a slacker. Here I had barely cracked the
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Beans don’t like wet feet
The old timers always said “beans don't like wet feet.” This is because beans are susceptible to diseases like bacterial blight, pod and stem blight, downy mildew, phytophthora rot, sclerotinia stem
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Fed not in a hurry to raise rates
Notwithstanding surprisingly strong second quarter gross domestic product growth, the Fed still has grave doubts about the economic outlook given continued housing and financial market fragility.
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Last year’s HNC scorecard
Although every year we profile emerging CTAs, we preface the story with the qualification that the feature is "not an endorsement but a review of new talent," we certainly like it when our Hot New
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Hot new CTAs: Back to basics
This is the 19th year Futures has profiled emerging commodity trading advisors (CTAs) and it has been an interesting year. While in general it has been a very positive year for futures traders, 2008
New For Traders
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New for Traders
The New York Mercantile Exchange will introduce a futures contract based on prevailing market prices for hot-rolled steel coil in the U.S. Midwest region early in the fourth quarter of 2008.
People
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Leaver appointed CEO at DME
Thomas Leaver was named CEO of the Dubai Mercantile Exchange (DME). Previously he was the COO of DME. “I am confident that [Leaver] will build on the successes achieved to date and lead the exchange
Trader Profiles
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Powers: Building from the ground up
Pete Powers, CEO of Cranwood Capital Management, was always interested in trading, but when he got what he thought was his big break in the institutional fixed income department at Dean Witter, it turned out to be an order desk job.
Profiles in Forex
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Return of the carry trade
The recent collapse of carry trades and the subsequent calls for renewed decline in the dollar should put the "carry trade" on every trader's mind. The carry trade consists of purchasing a foreign
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Jes Black: Always seeking new strategies
Jes Black began his career on Wall Street in 2000 as a currency strategist at MG Financial Group. He is now managing director of Black Flag Capital, an alternative asset management company, and the
