John
Lothian's Daily Futures & Securities Industry Newsletter
January 28, 2003
Lead
Stories
CBOT,
Euronext discuss link up -Financial Times, Jan 28, 2003 -By Jeremy Grant
in Chicago
The Chicago Board of Trade and Euronext-Liffe are in talks about collaborating
on product development for the two exchanges...
http://search.ft.com/search/article.html?id=030128000507&query=futures+trading+exchange&vsc_appId=totalSearch&state=Form
LSE to buy financial data software firm
http://www.forbes.com/home_europe/newswire/2003/01/28/rtr860884.html
NYBOT’s
Sugar No. 11 Contract Continues Streak
http://www.nybot.com/pressRelease.asp?releaseID=540
NYBOT
Announces New FINEX, NYFE and CSCE Margin Requirements
http://www.nybot.com/pressRelease.asp?releaseID=539
Another
snafu for Merc 'Eagle' plan
http://www.chicagobusiness.com/cgi-bin/news.pl?id=7744
The
Philadelphia Stock Exchange Responds to Securities and Exchange Commission's
Request to Eliminate Payment for Order Flow
http://www.phlx.com/news/pr2003/03pr0127a.html
Investment
Banks Feel Chill of War Worry (Reuters)
...Cuts that have seen 50 percent of staff disappear at some banks could slice
deeper if fears of a prolonged equity market paralysis come to pass,......
prolonged equity market paralysis come to pass, Claudio Aguirre, chairman of
European investment banking at Merrill Lynch, told Reuters.......Josef
Ackermann, chief executive of Deutsche Bank AG, said a quick and successful
military operation in Iraq was likely to be positive for...
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030127/bs_nm/financial_davos_dc_1
Why $1.5 Bil Wall St. Settlement Won't Boost Quality Of Research
(Investor's Business Daily)
...That number is now closer to 10%, thanks in part to NASD rules that took
effect in September....
http://biz.yahoo.com/ibd/030128/feature_1.html
Exchange
News
IntercontinentalExchange
(UK) Granted Arranger Status By FSA
http://www.riskcenter.com/cgi-bin/article.pl?id=6125
IntercontinentalExchange
(UK), Ltd. Granted Arranger Status by FSA
http://www.theice.com/press/20030127.html
CBOT
Strike Price Notice, January 24, 2003 - 01.27.2003
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+268+10790,00.html
CBOT/
Dow Jones Strike Price Notice, January 24, 2003 - 01.27.2003
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+268+10791,00.html
Modification
to a/c/e One-for-One Fee Credit Program - 01.27.2003
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+268+10792,00.html
January
2003 Fed Watch - 01.27.2003
In advance of the January 29 Federal Open Market Committee meeting, the Chicago
Board of Trade is reporting daily rate change probabilities in the FOMC's
federal funds target rate, as indicated by the CBOT 30-Day Federal Funds
futures contract.
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+null+10712,00.html
OneChicago
Single Stock Futures - Corporate Events Alert: Microsoft Stock Split -
Effective Tuesday, February 18, 2003.
http://www.cme.com/risk_management/secure.cme.com/advisory_notices/shownotice.cfm?NoticeID=0004FE5F-D220-1E31-92AB80EDBEFBED80
Corporate
Event Circular 1-2003 Microsoft Corp 2-for-1 Split 02/18/03
http://www.nqlx.com/NQLX/Publications/NQLX%20Corp%20Event%20Circular%2001-2003%20Microsoft.pdf
Regulatory
News
FORMER
DYNEGY MARKETING AND TRADE EMPLOYEE CHARGED WITH COMMODITY DECEPTION AND WIRE
FRAUD;
Former Natural Gas Trader Charged Criminally Under the Commodity Exchange Act
With Intentionally Reporting False Natural Gas Price and Volume Information to
Energy Reporting Firms in an Attempt to Affect Prices of Natural Gas Contracts
http://www.cftc.gov/opa/enf03/opa4744-03.htm
IRS takes close look at offshore deferral schemes
http://biz.yahoo.com/ft/030127/1042491251325_1.html
CFTC,FERC
seek to ease energy industry credit woes
http://www.forbes.com/markets/newswire/2003/01/22/rtr855540.html
Investor-Protection
Obligations of NASD Members Re: Hedge Funds
http://www.hedgeworld.com/news/read_news.cgi?section=dail&story=dail9655.html
U.S. scrutiny for Wall Street credit-rating agencies
http://www.suntimes.com/output/business/cst-fin-sec28.html
FBI's
new breed runs hot on Enron's trail (USA TODAY)
... seventh-largest corporation collapsed like a house of cards, leaving
investors, employees and trading partners out of luck.......The Enron
investigators ''are the future of the FBI,'' says Ford....... the agents have
been working closely with investigators from the Securities and Exchange
Commission, led by Linda Thomsen, and IRS agents, headed by Jack Harris....
http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20030128/bs_usatoday/4814837
NASD
Names Nick Bannister Managing Director For International Affairs and Services
http://www.nasdr.com/news/pr2003/release_03_005.html
Paula
Dubberly Named Associate Director (Legal) in SEC's Division Of Corporation
Finance
http://www.sec.gov/news/press/2003-14.htm
Shelley
Parratt Named Deputy Director in SEC's Division of Corporation Finance
http://www.sec.gov/news/press/2003-15.htm
The SEC News Digest
http://www.sec.gov/news/digest/dig012703.txt
Chairs
of BC and Ontario securities commissions present their plans for regulatory
reform to Canada's miners
http://www.bcsc.bc.ca/news/NR03_08.asp
MFA submits two comment letters on proposed IRS/Treasury tax shelter
regulations (12/24/02 & 1/16/03)
http://www.mfainfo.org/images/pdf/tax_shelter_final.pdf
Former
Arthur Andersen Auditor Settle SEC Charges
http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2003-01-28-6124.html
i2 faces SEC accounting probe, CNet
http://www.atmarkets.org/inc/linkcount.asp?id=-1512253033&url=http%3A%2F%2Fnews%2Ecom%2Ecom%2F2100%2D1017%2D982331%2Ehtml%3Ftag%3Dcd%5Fmh
CEOs
Lead SEC's Book-Cooking Parade (Reuters)
...The SEC said CEOs and presidents were charged in 111 out of 227
investigations of improper financial...
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030128/bs_nm/financial_sec_enforcement_dc_2
SEC
settles over Sunbeam (FT.com)
...The SEC has alleged that Sunbeam was riddled with illegal conduct including
the booking of inappropriate...
http://biz.yahoo.com/ft/030127/1042491264903_1.html
SEC
Seeks New Powers Against Law Breakers (Reuters)
...In a report to Congress, the SEC said it was already channeling fine
revenues into new restitution funds for cheated investors...
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030127/ts_nm/financial_sec_collection_dc_4
Broker
loses suit filed by investor MORGAN STANLEY ORDERED TO PAY $1.7 MILLION
Arbitrators ordered
Morgan Stanley Dean Witter to pay $1.7 million to a former San Francisco
employee of America Online to resolve her complaint that her broker cost her
millions of dollars by improperly investing her money in risky securities.
http://www.bayarea.com/mld/mercurynews/5047355.htm
Reports
Bond
Talk Today's Events
http://www.bondtalk.com/global.cfm?S=todaysevents
USDA
Today
http://www.usda.gov/nass/PUBS/TODAYRPT/TODAY.HTM
Miscellaneous
News
ITG
to Add After Hours Cross (Business Wire)
Investment Technology Group, Inc. , a leading provider of technology based
equity trading services, today announced plans to launch an after hours cross
in mid February. The POSIT equity matching system will run the after hours
cross once nightly after 6:30 PM Eastern Standard Time.
http://biz.yahoo.com/bw/030128/280063_1.html
eSignal
Creates New Learning Tool and Adds Market Depth with Nasdaq SuperMontage
(Business Wire)
... such as Learning Mode, a tool that enables eSignal traders to fine tune
their trading strategies by replaying the day's trading after hours," said
Chuck Thompson,......Single Stock Futures: Enables subscribers to follow single
stock futures from OneChicago,...... and delayed services from the U.S. and
international markets in one product, saving money on exchange fees....
http://biz.yahoo.com/bw/030128/282093_1.html
Hedge
Fund Launch, LLC Reveals Landscape of Start-Up Hedge Fund Universe
(InternetWire)
...Most managers also understand the necessity to relinquish equity in their
operation in exchange for seed capital....... 61% of managers purport to have
an audited or auditable track record of their past trading experience.......
15% non-directional arbitrage, 13% global (which includes managed futures), 13%
multiple strategies, 2% event driven, and 19% other strategies that do not
readily fit...
http://biz.yahoo.com/iw/030128/050611.html
An
emotional look at Cantor Fitzgerald's recovery (USA TODAY)
On Top of the World: Cantor Fitzgerald, Howard Lutnick & 9/11: A Story of
Loss & Renewal is dedicated to the 658 employees of the stock and
bond-trading firm who died that tragic day. Their names, in three columns, fill
6 1/2 pages. Just turning those pages, one after another, is a poignant
beginning.
http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20030127/en_bo_usatoday/4811996
Responding
to suit, special master defends Sept. 11 victim compensation fund (AP)
...All seven plaintiffs are relatives of bond brokerage Cantor Fitzgerald
employees who died in the Sept. 11 attack....
http://story.news.yahoo.com/news?tmpl=story&u=/ap/20030128/ap_wo_en_po/na_gen_us_attacks_victims_fund_2
Families
file suit against special master of Sept. 11 victim compensation fund (AP)
...All seven
plaintiffs are relatives of Cantor Fitzgerald employees who died in the Sept.
11 attack....
http://story.news.yahoo.com/news?tmpl=story&u=/ap/20030127/ap_wo_en_po/na_gen_us_attacks_victims_fund_1
Man Group Raised to `Trading Buy' at Numis Securities
Man Group Plc (EMG LN) was raised to ``trading buy'' from ``hold'' by analyst
Justin Bates at Numis Securities Ltd.
http://quote.bloomberg.com/fgcgi.cgi?T=quote/uk/uk_quote_long_news.ht&s=APjZjphLlTWFuIEdy
New
faces appear in metals market
Gold hit $372 a troy ounce in London morning trading yesterday, while global
stock markets fell and the FTSE 100 went into...
http://search.ft.com/search/article.html?id=030128000474&query=futures+trading+exchange&vsc_appId=totalSearch&state=Form
Web
Cast of Henry M. Paulson Jr. at Salomon Smith Barney 2003 Financial Services
Conference
http://www.gs.com/broadcasts/ssb01282003
Jobs
axe falls on Cazenove
Investment bank Cazenove, the Queen's stockbroker, has become the latest City
institution to suffer from the weakening stock markets. The bank has cut 90
jobs from its London office, representing 8% of its staff.
http://news.bbc.co.uk/1/hi/business/2480039.stm
John's
Comments
CBOT
Mini Dow Hits Higher High, CBOT to Launch Fed Fund Options
The Chicago
Board of Trade's Mini Dow contract traded a single day volume record again
yesterday, jumping over the 30,000 level to a total of 33,141 contracts
yesterday. The $10 multiplier mostly pit traded Dow traded a total of
25,862 contracts. Open interest in both contracts climbed.
After
consulting with a savvy market watcher this morning, it was suggested to
me that the focus on the Blue Chips as a measure of the U.S. economy was aiding
the Dow complex and the Mini Dow volume. The fact the Dow is 30 stocks
gives investors and traders a narrower based index to trade, with more specific
risk and sectors focuses. The growing proliferation of ETF sector funds
listed on options exchanges, and some futures exchanges, would support this
idea. The CME has two S&P sector fund futures contracts, FINANCIAL
SECT & TECH-COMM SECT. OneChicago has previously announced
their own list of narrow based indices.
The Mini
Dow is also being aided by the "aggressive marketing/advertising
campaign" for the Mini Dow in the fourth quarter of 2002 and the
liquidity provided by the designated Electronic Market Makers, according to
CBOT President Bernie Dan at a press conference today.
Mr. Dan
also spoke about the performance of the Dow Jones AIG commodity index that
increased 23.86% in value in 2002, while many leading equity indices
experienced declines. "This performance illustrates the benefits of
portfolio diversification and exposure to assets with a negative correlation to
equities," the CBOT's President said.
At the
press conference the CBOT unveiled plans to launch options on Fed Funds on
March 14. The Fed Fund options will only trade in the pit at this
time. This is due to two factors. One factor is that most options
at the CBOT are currently traded in the pit and this is the best place a to
start. The Fed Fund options will be traded in a section of the bond
option pit. The other factor has to due with the limits of the CBOT's
current matching engine technology. That factor should be eliminated once
the CBOT moves to the LIFFE.Connect matching engine.
The CBOT
also announced that ABN Amro have been signed as market makers in the 5-year
and 10-year Agency Note futures pit and will make two sided markets no
wider than 2/32nds for no less than 250 contracts.
Here is the
CBOT press release on the Fed Funds:
Fed Funds Options to Launch March 14
The CBOT is expanding its successful Fed Funds complex by
introducing Options on CBOT Fed Funds futures. Options on CBOT Fed Funds
futures will offer an important risk management tool for anyone who wants to
hedge against, or speculate on, changes in short-term interest rates brought
about by changes in Federal Reserve monetary policy. The new contract will begin
trading on Friday, March 14, in the open auction marketplace.
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+109+10807,00.html
|
Commodity |
a/c/e |
Open Outcry |
Total Exch |
Cash |
Give |
Trans |
Open Interest |
|
|
At Close |
Change |
|||||||
|
Dow Jones Industrial Average |
1467 |
24395 |
25862 |
0 |
5425 |
220 |
28480 |
+694 |
|
Dow Jones AIG Commodity Index |
15 |
0 |
15 |
0 |
0 |
0 |
1418 |
+15 |
|
CBOT mini-sized Dow Futures $5
multiplier |
33141 |
0 |
33141 |
0 |
4170 |
2 |
14748 |
+808 |
************
Globex
Rules while Eagle Struggles
For the second day in a row more contracts were traded on
the CME's Globex matching engine than in its open outcry pits. Globex
traded 1,215,153 contracts yesterday to 1,027,144 contract traded via open
outcry. The Eagle matching engine, which was shut down for much of the
pit trading session yesterday, was successfully restarted yesterday
afternoon. However, EAGLE was again shut down this morning at 6:45
AM. It was restarted at 9 AM today.
According to CME media relations sources the cause of
yesterday's problems was an "order processing" issue that had not
arisen during the extensive mock trading the CME had conducted. A work
around was created yesterday to re-launch trading and a full fix was developed
overnight to be applied today.
Despite these problems, the CME traded 19,474 Eurodollar
contracts on EAGLE yesterday, the CME sources said.
The CME also saw an open interest record yesterday in Milk
futures, which increased 61 contracts to a record 22,361. The E-Midcap
set a daily volume record at 5877 contracts. Lean Hogs had Globex volume
of 27 contracts yesterday and the Emini S&P had volume of 811,357.
***********
SSF
Round Up
Nasdaq Liffe Markets traded 7,552 single stock futures
contracts yesterday, with open interest increasing 531 to 23,418.
OneChicago traded 4534 single stock futures and ETF futures contracts
yesterday, with open interest increasing 498 to 54,762.
Regards,
John J. Lothian
President
Electronic
Trading Division
The Price
Futures Group, Inc.
Chicago
Board of Trade Building
141 West
Jackson Blvd., Suite 1340A
Chicago,
IL 60604
Ph:
1-800-713-0215 or 312-648-2426
Fax:
312-902-6437
email: jlothian@pricegroup.com
URL: www.pricegroupetd.com or www.pricegroup.com
Disclaimer:
This letter is strictly the opinion of its writer, and not necessarily those of
The Price Group and its management, and is intended solely for informative
purposes and is not to be construed, under any circumstances, by implication or
otherwise, as an offer to sell or a solicitation to buy or trade in any
commodities or securities herein named. Information is obtained from sources
believed to be reliable, but is in no way guaranteed. No guarantee
of any kind is implied or possible where projections of future conditions are
attempted. Security futures are not suitable for all customers.
Futures and
options trading involve risk. Past results are no indication of future
performance.