John Lothian's Daily Futures & Securities Industry Newsletter
December 17, 2001
Lead
Stories
Minneapolis
Grain Exchange Receives CFTC Approval for Electronic Trading (PR Newswire)
The Minneapolis Grain Exchange received approval yesterday from the Commodity
Futures Trading Commission for the rules and
regulations that support MGEXpress, the Exchange's electronic trading platform.
http://biz.yahoo.com/prnews/011214/mnf011_1.html
Nasdaq
Announces Annual Re-ranking of Nasdaq-100 (PR Newswire)
... period beginning December 1991, although past performance is not
necessarily indicative of future performance.''......The QQQ
index tracking stock, which is an exchange-traded fund (ETF) that trades like a
stock, is the world's most actively traded ETF.......On
most trading days, it is also the second most actively traded security in the
U.S. The Nasdaq-100 Index...... to support media coverage
and to act as benchmarks for financial products such as options, futures, and
funds....
http://biz.yahoo.com/prnews/011217/dcm007_1.html
NYMEX
removes curbs on number of participants in ACCESS
http://biz.yahoo.com/rf/011214/n14449880_1.html
Exchange
Eliminates Limits On Number Of Electronic Trading Privileges
http://www.nymex.com/news/pr_detail.cfm?id=422
Europe's
execution-only brokers fight new rules (Reuters Securities)
...Execution-only brokers in Britain include Halifax Sharedealing , Charles
Schwab Europe and Selftrade....
http://biz.yahoo.com/rf/011217/l17157227_1.html
B2B
e-commerce could save firms trillions - study
http://biz.yahoo.com/rf/011217/l14430221_2.html
FERC
to consider new derivative rules next week
http://biz.yahoo.com/rf/011214/n14233596_2.html
Nasdaq
Japan to boost capital by Y1.88 bln (Reuters Securities)
...The U.S. Nasdaq said on Thursday it aimed to have an exchange traded fund
(ETF) which tracks the Nasdaq 100 index listed on the
Nasdaq Japan market in 2002,...
http://biz.yahoo.com/rf/011214/t135439_2.html
Exchange
News
CME
TO LAUNCH ‘SIDE-BY-SIDE’ GSCI® FUTURES TRADING ON FEB. 19, 2002 -
Block Trading Also To Be Offered
CHICAGO,
Dec. 17, 2001—Chicago Mercantile Exchange Inc. (CME) will offer
“side-by-side” electronic and open
outcry trading of Goldman Sachs Commodity Index (GSCI®) futures,
beginning on Feb. 19, 2002.
Contract
specifications for CME’s electronic GSCI futures will be identical to those
traded in the open outcry market and fully fungible with the open outcry
contracts. Both electronic and
floor trading will be available during regular floor trading hours of 8:15 a.m.
to 2:15 p.m. Electronic trading
will be offered via CME’s GLOBEX® electronic trading system* from
2:45 p.m. (5:30 p.m. on Sundays) until 2:15 p.m. the following day.
Also on
Feb. 19, 2002, CME will begin permitting block trades in GSCI futures, with a
minimum of 50 contracts for outright positions and 300 contracts per side for
spreads.
The GSCI is
a world production-weighted commodity index composed of 26 liquid
exchange-traded futures contracts. Designed as a benchmark for commodity
prices, the GSCI measures the level of world commodity prices. CME, the leader
in index futures products, introduced futures and options on the GSCI in 1992.
GSCI futures and options allow for portfolio diversification and exposure to
real assets.
A block
trade is a privately negotiated futures or option transaction executed apart
from the public auction market.
Block transactions may be executed by eligible parties on or off CME
trading floors. They must be
priced at “fair and reasonable” levels in light of the size of the transaction
and the circumstances of the parties to the transaction.
Eligible
participants include exchange members and member firms, broker/dealers,
government entities, pension funds, commodity pools, corporations, investment
companies, insurance companies, depository institutions and high net worth
individuals. In addition, Commodity Trading Advisors (CTAs) and registered
investment advisors—with net assets under management of at least $25
million—may also conduct block transactions.
Revised
CBOT/MidAm Christmas and New Year's Day Trading Schedule - 12.14.2001
The Chicago Board of Trade (CBOT) and the MidAmerica Commodity Exchange (MidAm)
have established the following Christmas and New Year’s Day holiday trading
schedules:
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+109+5317,00.html
Cytyc
Corporation Named to the Nasdaq-100 Index (Business Wire)
Cytyc Corporation announced today that it will become a component of The
Nasdaq-100 Index(R), effective at the beginning of trading
Monday, December 24, 2001. As a result, Cytyc Corporation will also be included
in The Nasdaq-100 Index Tracking Stock(SM).
http://biz.yahoo.com/bw/011217/172246_1.html
Eurex
Expands Euro Repo Facility
http://www.eurexchange.com/entrancehall/news_pressreleases_175_en.html
Record
Boost For AIM
http://www.londonstockexchange.com/press/releases/14-12-01.asp
London
Stock Exch. (LSE)
http://www.uk-wire.com/cgi-bin/articles/200112171521268063O.html
Regulatory
News
The
SEC News Digest
http://www.sec.gov/news/digest/12-14.txt
Start-up
of new insider reporting system shifted to January 21, 2002
http://www.bcsc.bc.ca/news/NR01_66.asp
Futures
Industry Magazine
Gone,
But Not Forgotten
The following profiles of Sept. 11 victims have been selected from the hundreds
that have appeared in newspapers across the country. These traders,
brokers,
managers, authors and firemen touched our lives. All will be missed by their
families, colleagues and friends.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=698
Security
Futures: The New Game in Town
Everyone’s talking about single stock futures, but who’s really going to trade
them? Traders, brokers and fund managers say it all depends on liquidity.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=699
Margin
Rules Come Into Focus
Discussions have already begun throughout the industry on what lessons can be
drawn from this disaster. No doubt this discussion will continue for months,
but one thing is clear: many firms would not have come back so quickly
if it had not been for the immediate and unstinting assistance they
received from other firms.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=702
A Reg T Glossary
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=703
Selling
Security Futures: It’s Not Business As Usual
Two very different
regulatory schemes are presenting unique challenges to firms and the account
executives who would like to offer security futures products to their clients.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=704
Clearing:
It’s Not Just Another Futures Contract
Clearing is a key piece of the market infrastructure that will support the
trading of security futures.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=705
Foreign
Products: Still Off-limits to U.S. Investors
How does the CFMA change customer access to foreign products? When will U.S.
investors have access to security futures products traded on non-U.S.
exchanges?
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=706
LIFFE
To Continue Listing More Single Stock Futures
London’s equity derivatives business is set for explosive growth, the London
International Financial Futures and Options Exchange says, forecasting that the
number of
Universal Stock Futures listed on its exchange could double over the next 12
months.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=701
Spain’s
MEFF Scores Solid Success
MEFF, Spain’s options and futures exchange, boasts the most active market for
single stock futures in the world. In the nine months since their introduction,
trading has tripled that at LIFFE, its closest competitor in the league
tables.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=700
President's Message
While regulatory relief brought subtle changes to our industry, the promise of
trading security futures products has altered the landscape significantly in
the last 12 months. The changes are remarkable.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=695
Trading
Volume
September was a month of overall gains in global futures and options markets,
in spite of the reduced trading time on many exchanges.
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=696
News
Briefs
SEC’s Pitt Outlines Agenda for Reform, McKinsey: WTC Attacks Exposed Flaws
in Disaster Planning, FIA Urges Congress to Move Netting Bill, MGE Goes
Electronic, GAO: Securities Industry Attractive to Money Launderers
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=697
Prominent
People
Magnus Böcker, Niklas Midby, Kerstin Hessius, Anders Reveman, William
G. Boyk, Barbara A. Richards, Kathleen M. Hamm, Larry J. Browne,
Debbie Gruetzmacher, Stephen M. Cutler, Peter H. Bresnan, Brian J.
Gross, Michael W. Robinson, Peter F. Borish, James (Chip) Bennett,
Ethel A. Laughlin, Thomas G. McCabe, Eric K.
Meier, Dean Payton, Arthur F. Bell, Jr., Mark Rosenberg, Anne Marie Kelly and
James O. Sampson...
http://www.futuresindustry.org/content/view.asp?t=m&ref=940270118&artid=707
A
User's Guide to Security Futures
Since 1982 the
trading of futures on individual stocks and narrow-based stock indexes has been
banned in the U.S. But all that changed with the December 2000 enactment of the
Commodity Futures Modernization Act (CFMA), a law that, among other things,
amended securities and futures statutes to permit trading of security futures
after a year and, after two more years, the trading of options on security
futures. Most of the attention so far has focused on single-stock futures, a
product that
could have vast appeal to both retail and institutional investors. But it’s
important to note that the other half of the security futures equation-futures
contracts on narrow based indexes-opens up significant opportunities to tailor
products to precise segments of the stock market, such as biotech or electric
utility stocks. The book is still
being written on who, what, where and how single stock futures will trade in
the U.S. As far as when, it now looks as if such trading will begin early next
spring. Based on what we know so far, here are answers to some of the most
frequently asked regulatory questions about these innovative financial
products. And there’s more to come in
the next issue of Futures Industry, as answers to the many outstanding
questions emerge.
erivatives.com
EDITORIAL
Range
Bound But Raring To Go?
THE
KISS TRADERS' GUIDE
Instinct,
Intuition or Analysis?
Viewpoints
and Variant Perception
FOCUS
Trading
TAPOs
BOOK
REVIEW
Jesse
Livermore
Bestsellers
EXCHANGE
AND B2B NEWS
Volumes
Soar
BITS
AND PIECES
Ffastfill
Results
FEEDBACK
Capital
Requirements, Fattism and Other Views
THE
BACK PAGE
The
Socio-Political Theory of Enron
Reports
Bond
Talk Today's Events
http://www.bondtalk.com/global.cfm?S=todaysevents
Miscellaneous
News
iShares
Trust Announced Zero Year-End Capital Gains Distributions for All Domestic ETFs
and 11 International ETFs (Business Wire)
iShares Trust announced today that the year-end capital gains distributions are
zero for all iShares domestic exchange-traded funds and
11 iShares international ETFs, including the iShares MSCI EAFE Index Fund.
iShares Trust is providing this information in an effort to
assist investors with year-end tax and investment planning. iShares are
designed to have relatively low portfolio turnover, which
minimizes capital gains distributions to investors. -0- *T
http://biz.yahoo.com/bw/011217/172061_1.html
BarclaysB2B
Chooses Clarus to Power Growth Of UK's Premier Smart Sourcing Service (PR
Newswire)
...The hosted e-procurement offering provides private trading networks that
enable buyers to streamline and integrate their
procurement processes....... making them easy to implement, manage, and
integrate with existing and future IT infrastructures.......
STATEMENTS WITHIN THE MEANING OF SECTION 28A OF THE SECURITIES ACT OF 1933 AND
SECTION 21E OF
THE EXCHANGE ACT....
http://biz.yahoo.com/prnews/011217/atm007_1.html
Jobs
Versus Prices, The Risks To The Fed Are Increasing
The Federal
Reserve Act of 1913 was amended in 1978 to require the Fed ``to promote
effectively the goals of maximum employment, stable prices, and moderate
long-term interest rates."
http://www.garp.com//newsfeed.asp?Category=6&MyFile=2001-12-17-4174.html
Asia-Pacific
Gets The B2B Message, BizReport.com
http://www.bizreport.com/article.php?art_id=2647&PHPSESSID=5e2b7acec006fb5403caaa05d462a8ab
Cost
of Christmas is On The Rise
http://www.hedgeworld.com/news/read_news.cgi?section=dail&story=dail5555.html
U.S.
Food Shipments to Cuba Restart (AP)
...Under its sales contract with Cuba, ADM is to send seven more shipments of
wheat, soy, rice and other grains through the end of
February,...
http://dailynews.yahoo.com/h/ap/20011217/bs/cuba_us_food_2.html
CSFB
courts ex-Merrill asset manager-WSJ (Reuters Securities)
CSFB, one of the top U.S. stock underwriters, is courting the former head of
rival Merrill Lynch and Co.'s asset management group, according to people close
to the situation, The Wall Street Journal reported on Monday.
http://biz.yahoo.com/rf/011217/n17206006_2.html
Lone Star says lacks financing to buy Cargill unit (Reuters Securities)
Lone Star Technologies Inc.(NYSE: LSS - news ), a maker of steel pipes and
tubes, said on Monday it hasn't bought Cargill Inc.'s steel
unit because the Sept. 11 attacks and the economic downturn prevented it from
raising the needed financing.
http://biz.yahoo.com/rf/011217/n17215758_1.html
The Unsung Heroes of E-Commerce (NewsFactor)
..." said Lauren Jones Shu, research director for GartnerG2.B2B
BenefitsAndrew Bartels, research leader for e-business at Giga
Information Group,..
http://dailynews.yahoo.com/h/nf/20011214/tc/15281_1.html
Lean
Times, Tough Choices in Banking (Reuters)
...U.S. JP Morgan (NYSE:JPM - news) plans to tap Europe's onshore hedge fund
market and UK's Schroders Plc (SDR.L) has just
bought a hedge fund boutique in London...... which they pay banks a premium
even as their ranks get thinner with the falling
markets.HEDGE FUNDS BOOMAt JP Morgan, Sheehan said hedge funds, which can beat
stock indices during market falls...
http://dailynews.yahoo.com/h/nm/20011216/bs/financial_wealth_year_dc_1.html
John's
Comments
Sunday's
Chicago Tribune had a more detailed story about the problems the Art Institute
of Chicago is having with some hedge fund investments. The story also
noted the presence of CBOT President David Vitale on the Board of Directors on
the museum.
******
The CBOT has
recently begun to release more information on its membernet information web
site for its members about the membership. Specifically, information
about membership privileges, sales, leases, delegation and pending applications
were released in a tabular report.
The CBOT
report showed 38 full members moved back from the CBOE a week ago to trade on
the CBOT as well as some other very positive information and trends.
This was
information the CBOT previously guarded closely, with only exchange directors
being given this information among the members, according to my sources.
What is
interesting about this is I believe that the CBOT began its turn
around when its members were able to directly communicate with each
other on the membernet discussion site. Actually, a former CBOT member
created a listserve email list that preceded the CBOT membernet. Some
CBOT members believe that current CBOT Chairman would not have been elected if
it were not for his ability to communicate to the members over membernet.
Maybe the
relationship between member communications and the renewal at the CBOT are only
correlated and not causal in nature. However, I believe there is a causal
relationship. I believe the members being about to vent their
frustrations and the positive discussions via the membernet discussion
board has benefited the exchange in its direction and performance.
As part of
my campaign for the NFA Board of Directors I have suggested that the
NFA use innovative and varied ways to communicate with members. One
way would be to create a membernet type of discussion site for NFA
registrants. It would allow for members to communicate with members,
allowing one member to help another member with industry related issues.
It would allow the NFA to identify areas of concern and be able to listen more
carefully to their members. The NFA has talked about becoming a more
competitive and responsive self regulatory organization. One way to do
that would be to get closer to the members and their concerns and this
would be one way to do it.
One of the
advantages of members helping members is that the answers are not official NFA
answers, but rather the answers of other members confronting the same
issues. The NFA rules about disciplined firms are based on the idea that
members are tainted somehow by their training. Perhaps some exposure to
members with a lineage of good firms and business records would help offset
some of the tainted training. Without some communications means there
will be a further isolation of members, which will only lead to hard feelings
and estrangement.
The
industry needs to find a way to bring its registrants together, not more ways
to isolate them. Creating cost effective communication means has helped
the CBOT, and other industry institutions. I will ask the NFA to find
ways to achieve that goal for its own members should I be elected.
In the
meantime, I have asked Mark Brown to create a listserve email list specifically
for Introducing Brokers. Mark hosts several trading related lists,
including the popular Code-List. To sign up for the list, go to www.markbrown.com/john and click on
the link.
*******
Speaking of
Mark Brown, the last time I mentioned Mark in this newsletter the number of
people signed up to receive his odd-ball trading system signals doubled
overnight. Before I wrote about his free trading system and email signals
he had about 250 subscribers. As of last week he had 1253 subscribers to
his free offering. Mark has informed me that he has ordered a T1 line in
order to handle the increased volume he is experiencing. He endures
my friendship very well. :-)
*******
Finding a
Brokertec futures trader may just be harder than
finding Bigfoot. So far no answers on my question to find a
Brokertec trader. Brokertec on Friday had volume of 1056. On
Thursday Brokertec has volume of 10,603, but that included block trades of 6000
10-year Notes and 2350 5-year Notes.
Regards,
John J.
Lothian
The Price
Futures Group, Inc.
Electronic
Trading Division
Chicago
Board of Trade Building
141 West
Jackson Boulevard, Suite 1340A
Chicago, IL
60604
Phone:
1-800-713-0215 or 312-648-2426
Fax:
312-902-6437
Web site: www.pricegroupetd.com
E-Mail: JLothian@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.
Futures and
options trading involves risk. Past results are no indication of future
performance.