Futures (Cedar Falls, IA)

A monthly trade magazine that presents news, analysis and strategies to inform and educate traders in futures, options and derivatives markets. Provides analysis of global markets and information on price movement, volatility, and future trends. Articles

Articles from Vol. 35, No. 13, October

Adjusting for Volatility: Nothing Affects the Performance of Options-In Some Cases Including the Movement of the Underlying-As Much as Volatility. Various Options Strategies React Differently to the Movement of Volatility. Here Is What You Need to Know to Prepare for Changing Volatility Levels
Options are among the most unique financial trading instruments available to everyday traders around the world. Options have been used for centuries in all walks of life. Aristotle wrote about buying an option to use olive presses during harvest, real...
Anticipation: CBOT/CBOE at It Again
As the New York Stock Exchange and Arca Ex demonstrated, a merger can be a relatively quick and painless shortcut to becoming a publicly traded company. Perhaps that is what the Chicago Board Options Exchange (CBOE) had in mind as it negotiated a merger...
Bayou Blues
Should investors in a fraudulent hedge fund, who withdrew money that really wasn't there, be able to keep that money? That's the question for former investors in the Bayou group of hedge funds. Prior to the fraud being discovered, several investors,...
CBOT/CBOE at It Again
ANTICIPATIONAs the New York Stock Exchange and Area Ex demonstrated, a merger can be a relatively quick and painless shortcut to becoming a publicly traded company. Perhaps that is what the Chicago Board Options Exchange (CBOE) had in mind as it negotiated...
Cycles and Technicals: A Profitable Pair
A complete trading plan should have at least three levels: General market assessment, trading entry timing and post-trade position management. Here, we look at timing and post-trade management strategies for a larger methodology that trades around macro-level...
Cycles and Technicals: A Profitable Pair; A Complete Trading Plan Should Have at Least Three Levels: General Market Assessment, Trading Entry Timing and Post-Trade Position Management. Here, We Look at Timing and Post-Trade Management Strategies for a Larger Methodology That Trades around Macro-Level Shifts in Major Cycles
A good timing mechanism can provide an extra edge for a trader's technical analysis toolkit. One solid approach is cycle analysis. This can be useful for timing short-term counter trends from one to several days that occur with regularity, and for...
DeCook: A Man Four (All) Seasons
Fundamental Futures Inc. (FFI) was one of the more successful commodity trading advisors (CTA) throughout the 1980s and 1990s. The fundamental discretionary ag program averaged more than 15% in a 20-year period with money under management rising to...
Eight Simple but Proven Option Strategies: While There Have Been Many Books Written about Options on Futures, Some of the Literature Can Leave You More Confused Than before You Began. Here We Show You That You Can't Apply Stock Option Theory to Options on Futures as If They Were the Same Instrument
All options are not created equal. Options on futures and equities may be spelled the same, but they are vastly different due to the nature of the underlying vehicles. As a result, the options take on completely different characteristics. Everybody...
Fed at Crossroads
It's not getting any easier for Federal Reserve Chairman Ben Bernanke and his Fed colleagues to make monetary policy. There are tough choices ahead. Some might differ and maintain that having suspended interest rate hikes on Aug. 8, the Federal...
Global Monetary Systems: Then and Now
Last month we talked about how the evolution of the gold standard led to global growth. This month we will discuss how the conflicts of the 20th century altered the world's monetary systems and look at what may come next.World War I - the war to end...
Global Monetary Systems: Then and Now; Last Month We Talked about How the Evolution of the Gold Standard Led to Global Growth. This Month We Will Discuss How the Conflicts of the 20th Century Altered the World's Monetary Systems and Look at What May Come Next
World War I--the war to end all wars--changed the map of humankind forever. Battle and famine claimed 15 million lives. Empires and dynasties imploded into multiple states throughout eastern and central Europe. A pact between France and Britain carved...
Hot New CTAs: Niche Programs Bring Profits
Commodity trading advisors have had a tough year again in 2006, but a number of emerging managers focusing on niche programs have produced positive returns.This is the 17th year Futures has profiled emerging commodity trading advisors (CTAs). A recent...
Hot New CTAs: Niche Programs Bring Profits; Commodity Trading Advisors Have Had a Tough Year Again in 2006, but a Number of Emerging Managers Focusing on Niche Programs Have Produced Positive Returns
This is the 17th year Futures has profiled emerging commodity trading advisors (CTAs). A recent trend towards niche managers continues, especially in terms of premium-collection option programs. New managers, who usually target smaller investments,...
Managing Equity Market Volatility
The options markets are all about volatility. If you're going to use these powerful and liquid derivative products to manage your risk or speculate, you need to understand the language of volatility.One day after a recent market close, a professional...
Managing Equity Market Volatility: The Options Markets Are All about Volatility. If You're Going to Use These Powerful and Liquid Derivative Products to Manage Your Risk or Speculate, You Need to Understand the Language of Volatility
One day after a recent market close, a professional market maker who trades options on the S & P 500 index (SPX) was asked how his day went. His response was something like this: "The day was really great. Throughout the morning, volatilities ran...
New Age for Analysis
Today's electronic markets pose a number of mechanical issues that affect the structure of trading systems. We are just beginning to understand the effects of these concerns. In the first of three parts, we'll look at some critical issues of building...
New Age for Analysis: Today's Electronic Markets Pose a Number of Mechanical Issues That Affect the Structure of Trading Systems. We Are Just Beginning to Understand the Effects of These Concerns. in the First of Three Parts, We'll Look at Some Critical Issues of Building Reliable Trading Systems in the Modern Landscape
Traders need open minds. Many of us believe trading systems are the only way to enjoy long-term success in the markets. Discretionary traders like to take a more active hand in trading. System traders can be both fundamental and technical, and though...
PBOT Reborn: Philly Futures to Launch
The Philadelphia Stock Exchange (PHLX) announced in September that its wholly owned subsidiary, the Philadelphia Board of Trade (PBOT), will relaunch as a fully electronic marketplace on Oct. 6. PBOT, which toyed with the concept of listing futures...
Philly Futures to Launch
PBOT REBORNThe Philadelphia Stock Exchange (PHLX) announced in September that its wholly owned subsidiary, the Philadelphia Board of Trade (PBOT), will relaunch as a fully electronic marketplace on Oct. 6.PBOT, which toyed with the concept of listing...
Questions Anyone?
Getting started in trading is difficult. There is technical analysis fundamental analysis and a whole language of industry terms to learn. However, it is important to get the answers before you start.You have questions, there are answers. Futures recently...
Questions Anyone? Getting Started in Trading Is Difficult. There Is Technical Analysis Fundamental Analysis and a Whole Language of Industry Terms to Learn. However, It Is Important to Get the Answers before You Start
You have questions, there are answers. Futures recently asked a number of brokers for a list of the most common questions they get from new traders, and then we got the answers, insights and commentary from those same industry pros. How are futures...
Risk Management for Option Writers: Option Writing Strategies, Whether Naked or Covered, Are Popular and Lucrative but Carry Unique Risks. Practitioners Need a Solid Strategy to Manage That Risk
Option selling strategies in the form of credit spreads or naked positions can be very profitable. Option sellers receive a credit in their account for selling an option and get to keep this amount if the option expires worthless. Also, both the option...
Searching for the Right Data Vendor
Garbage in garbage out is a self evident axiom of our computer age, and it certainly applies to the data traders depend on to make trading decisions. While you can get a wide variety of data for free on the Internet, that data is delayed and basic....
Season of Extremes Coming to an End?
3 The year 2006 is turning out to be a year of extremes in weather, geopolitics and forex markets. The challenge for the forex trader is to filter out the noise of a current day's events and seize opportunities for trading. Four currency pairs, the...
Tech Talk: Is the Worst Over?
As summer comes to a close, technicals in the crude oil market show relief may be at hand. Can this news, coupled with some bearish supply fundamentals, trump geopolitical concerns and deliver a larger correction pushing prices back to the long-term...
The Big Bad House
Even if you don't own your own home, as a participant in the financial markets your fortunes are directly tied to one of the most precarious housing markets of the last 20 years. The implications for the stock market are huge.A host of technical indicators...
The Big Bad House: Even If You Don't Own Your Own Home, as a Participant in the Financial Markets Your Fortunes Are Directly Tied to One of the Most Precarious Housing Markets of the Last 20 Years. the Implications for the Stock Market Are Huge
A host of technical indicators suggest that the stock market reached a major top in May 2006. Both momentum and volume broke rising bottom patterns, indicating the bull market of the last year and a half had come to an end--at least temporarily. For...
The Liquidity Mirage
Market liquidity is not always available the way traders believe it is. This can be especially evident in the futures markets, creating massive financial risk and potentially triggering systemic risk.The advent of easy online access to trading, whether...
The Liquidity Mirage: Market Liquidity Is Not Always Available the Way Traders Believe It Is. This Can Be Especially Evident in the Futures Markets, Creating Massive Financial Risk and Potentially Triggering Systemic Risk
The advent of easy online access to trading, whether in stocks, bonds, commodities or forex, has created the perception of price transparency and fairness. Every organization, from government regulatory bodies to the exchanges and brokers, promotes...
The Long Arm of the (International) Law
As markets become more and more international, so do criminal activities. How do regulators clamp down on cross-border fraud and market manipulation without stifling cross-border trade and commerce?David MacGregor and Karen Roth won't say exactly what...
The Long Arm of the (International) Law: As Markets Become More and More International, So Do Criminal Activities. How Do Regulators Clamp Down on Cross-Border Fraud and Market Manipulation without Stifling Cross-Border Trade and Commerce?
David MacGregor and Karen Roth won't say exactly what it was about the track record posted on the www.teamforex.com Web site that tipped them off, other than that the numbers seemed a bit "optimistic." Whatever the initial impulse, they contacted...
There Goes the Neighborhood
TRADING EXCHANGESThe two largest energy exchanges in the world will be competing from the same building as the Intercontinental Exchange (ICE) entered into a definitive agreement to acquire the New York Board of Trade (Nybot) for $1 billion. Nybot will...
The Road to Full-Time Option Trading
Traveling the road from the corporate world to trading options full time is challenging, but can be rewarding if you do your research and take it slow. I have successfully traded options full time since 1992, a period that included several challenging...
The Science of Early Exercise: For Many Option Traders the Question of When to Exercise Those Options Never Comes Up but There Are Times It May Be Beneficial
From the time investors began adding options to their portfolios, the theory behind early exercise has been misunderstood among option buyers and feared among option sellers. Many investors misunderstand when an option is truly worthy of early exercise...
The Ups and Downs of Option Prices: Some of the Most Commonly Expressed Frustrations with Options Are about How Option Prices Change. Understanding the Reasons Why Option Prices Behave the Way They Do Will Help You Be a Better Options Trader
Beginner and intermediate level option traders often express surprise when the share price of a stock rises, but the value of their call doesn't. There are few things as frustrating as being right on your market call but not profiting as you expected...
Too Much Energy?
The news that the New York Board of Trade (Nybot) was going into a good faith purchase agreement with the Intercontinental Exchange (ICE) was yet another chapter in the strange and twisting relationships of this industry. What makes this relationship...
Trading Exchanges: There Goes the Neighborhood
The two largest energy exchanges in the world will be competing from the same building as the Intercontinental Exchange (ICE) entered into a definitive agreement to acquire the New York Board of Trade (Nybot) for $1 billion. Nybot will receive $400...
Trading Implications
A market decline is an opportunity for futures traders. Unlike buy-and-hold equities strategists, futures traders have the dexterity to capitalize on major market moves in either direction. With the strong probability of a market decline and an excellent...
Trading Options on Currencies/forex: Most Retail Traders Generally Trade Currency Options on a Regulated Exchange and the Larger Institutions Stick with the OTC Market. While OTC Markets Have Held an Advantage in Trading Forex over Futures, Most Money Managers Trade Options on Currencies at the Chicago Mercantile Exchange
Few forex trading platforms offer forex options because the big boys go directly to bank dealing rooms. That may be changing as more money managers and retails traders are turning to options. Futures spoke to several futures commission merchants...
Where Are Energy Markets Headed?
Iran is testing missiles and refusing to stop nuclear enrichment, Israel and Lebanon have a shaky cease fire, BP's Alaskan pipeline repairs are keeping 200,000 barrels of oil off of the market per day and we still face the bulk of the hurricane season....
Where Are Energy Markets Headed? Iran Is Testing Missiles and Refusing to Stop Nuclear Enrichment, Israel and Lebanon Have a Shaky Cease Fire, BP's Alaskan Pipeline Repairs Are Keeping 200,000 Barrels of Oil off of the Market per Day and We Still Face the Bulk of the Hurricane Season. All of These Factors Affect the Supply of Crude Oil and Some Add an Extra Element of Fear
Unfortunately energy does not just respond to basic supply and demand fundamentals; rather geopolitics now also play a significant role in how energy prices move. [ILLUSTRATION OMITTED] Ten years ago we stopped thinking about this kind of stuff....