John Lothian's Daily Futures & Securities Industry Newsletter
December 18, 2002
Lead
Stories
Exchange
to Launch Financially Settled Monthly, Weekly, and Daily PJM Electricity
Futures Contracts
http://www.nymex.com/jsp/news/press_releas.jsp?id=pr20021217a
Exchange
to Raise Margin Rates on Natural Gas Futures, Henry Hub Natural Gas Swaps, and
Natural Gas
http://www.nymex.com/jsp/news/press_releas.jsp?id=pr20021217b
NYSE Emphasizes Member
Firms Must Ensure Accuracy, Integrity of Order-Routing Systems; Recent Errors
Prompt Reminder About Rules and Business Practices
The memo outlines five regulatory requirements and business practices that must
be adhered to when electronic order-entry systems are used:
1. Systems
must include controls that limit use to authorized persons, check for order
accuracy, prevent orders that exceed preset credit- and order-size parameters
from being transmitted, and prevent duplication or re-transmission of orders.
2.
Safeguards must be in place so that system maintenance does not cause
inadvertent disabling of systems, or other problems.
3. Firms
must not test their systems' connectivity to the NYSE by sending orders that
are not executable, such as orders at prices far outside a security's current
price. Tests must use established procedures and test messages should be
clearly denoted.
4.
Reasonable, written controls and supervisory procedures must be in place before
a member or member firm grants correspondents access to its or a vendor's
electronic order-routing system, in connection with carrying, clearing or other
arrangements.
5. Members
and member firms must learn the essential facts relative to every customer
order, as required by Rule 405, the NYSE's "know your customer" rule.
These requirements are imposed on every customer order regardless of how it is
received or transmitted, including those routed via electronic trading systems.
http://www.nyse.com/press/NT0048B94A.html
**** If
only.
The
Pacific Exchange and Russell to Offer Trading on Russell ETF Options (Business
Wire)
The Pacific Exchange and Frank Russell Company have signed a licensing
agreement to offer ETF options contracts based on the family of 12 Russell
index iShares.
http://biz.yahoo.com/bw/021217/170368_1.html
Montreal
Exchange Extends Access to United Kingdom (Canada NewsWire)
...^Montreal Exchange Extends Access to United Kingdom@ MONTREAL, Dec. 17
Bourse de Montréal Inc. ("Montréal Exchange")...... Montréal Exchange
is authorized to offer UK brokers direct access to the Montréal automated
trading system.......We also extended access to U.S. dealers and brokers for
the trading of futures contracts and options on futures contracts....
http://biz.yahoo.com/cnw/021217/a_boursemtl_unitedkin_1.html
Winnipeg Commodity
Exchange Inc. Will Offer Exchange For Risk (EFR) Transactions Beginning January
2003
http://www.wce.ca/wnew/newsreleases/2002/pr-12-17-02.asp
Ariba: The Pain of a B2B Pioneer, BusinessWeek
http://www.atmarkets.org/inc/linkcount.asp?id=1904298597&url=http%3A%2F%2Fwww%2Ebusinessweek%2Ecom%2Ftechnology
%2Fcontent%2Fdec2002%2Ftc20021218%5F4936%2Ehtm
B2B
Isn't Dead. It's Learning, BusinessWeek
http://www.atmarkets.org/inc/linkcount.asp?id=2094059970&url=http%3A%2F%2Fwww%2Ebusinessweek%2Ecom%2Ftechnology
%2Fcontent%2Fdec2002%2Ftc20021218%5F4839%2Ehtm
Female Broker Gets $3.2M Award
http://www.newsday.com/business/ny-biz-broker1217,0,583982.story?coll=ny-top-headlines
Goldman
Sachs named Equity House of the Year, Credit Derivatives House and
Agency/Supranational House of the Year by International Financial Review
http://www.gs.com/our_firm/corporate_information/feature_articles/ifr.html
Exchange
News
Agreement
Offers Electronic Cash & Futures Markets Thru ESpeed - 12.17.2002
ESpeed To Offer World's Largest Combined Electronic Cash and Futures Market
Through Agreement With Chicago Board of Trade
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+109+10252,00.html
**** Same
press release from yesterday, but on the CBOT web site today, twice on the
front page.
19th
Annual Risk Management Conference
December
18, 2002 – The Chicago Board Options Exchange® (CBOE®), Chicago Board of Trade
(CBOT®), and Chicago Mercantile Exchange Inc. (CME) announce the
19th Annual Risk Management Conference to be held Sunday, March 23 through
Wednesday, March 26, 2003 at the Hyatt Regency Hill Country Resort, San
Antonio, Texas.
For registration information, please call Theon Katsis at the RMC Registration
Headquarters, 312-435-3673 or e-mail tkat50@cbot.com.
For detailed information about this year’s conference, visit the Risk
Management Conference website at www.cboe.com/rmc.
***** Nice
URL!
Sexual
Harassment Prevention Policy - 12.17.2002
The CBOT is strongly committed to providing a trading floor free of sexual
harassment.
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+268+10246,00.html
CBOT
Strike Price Notice, December 17, 2002 - 12.17.2002
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+268+10248,00.html
CBOT
Trading Postition Change, Soybeans, December 19, 2002 - 12.17.2002
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+268+10249,00.html
$2 Dow Contract to be Delisted - 12.17.2002
http://www.cbot.com/cbot/www/cont_detail/0,1493,10+24+null+10260,00.html
Minimum
Margins Update
KCBT Changes Minimum Margins For Trading Value Line®
http://www.kcbt.com/news_2.asp?id=29&home=1
Quarterly review Euronext 100 index & Next 150 index
http://www.euronext.com/en/euronext_org/news/press_releases/news.jsp?news.id=15176&lang=EN&isin="etype=STOCKQUOTE
Today's
investor relations events for NYSE-listed companies
http://www.nyse.com/listedhome.html?query=/events/earningsr.html
New
Margin Requirements For NYBOT'S Coffee, Cotton And Citrus Contracts
http://www.nybot.com/pressRelease.asp?releaseID=524
Security Futures Updates - Expiration
http://www.optionsclearing.com/market/ssf_memos/18613.pdf
Single
Stock Futures Delivery Information
http://www.optionsclearing.com/market/ssf_memos/18615.pdf
Open
Interest In CME E-Mini TM S&P 500 Futures Surpasses 500,000
http://www.exchange-handbook.co.uk/news_story.cfm?id=40750
Regulatory
News
75
Law Firms Write SEC Over Disclosure Proposals
http://biz.yahoo.com/law/021218/4ca38cf30afceeb8ff6367d466057616_1.html
SEC Sues Former Tyco Director and Chairman of Compensation Committee
Frank E. Walsh Jr. for Hiding $20 Million Payment From Shareholders; Walsh Had
Secret Agreement With L. Dennis Kozlowski To Receive Payment for "Finder's
Fee" in Tyco's Acquisition of The CIT Group Inc.
http://www.sec.gov/news/press/2002-177.htm
The
SEC News Digest
http://www.sec.gov/news/digest/12-17.txt
SEC
Sues Tyco Executives For Hiding Millions From Shareholders
The Securities and Exchange Commission (SEC) yesterday filed a settled civil
action in the US District Court for the Southern District of New York alleging
that Frank Walsh Jr, a former Tyco International director, violated the federal
securities laws by signing a Tyco registration statement that he knew contained
material misrepresentations.
http://www.garp.com//newsfeed.asp?Category=6&MyFile=2002-12-18-5973.html
Leading
Financial Industry Associations Propose Market-Based Approach to Sovereign Debt
Restructuring and Note Inherent Flaws With IMF's Proposal
http://www.sia.com/press/html/pr_joint_release.html
SIA
Urges Administration To Propose Tax Measures To Boost Retirement, Education
Savings; Promote Investment; Protect Jobs By Enhancing U.S.-Based Firms' Global
Competitiveness
http://www.sia.com/press/html/pr_administration.html
Financial
Services Executives To Examine Industry's Most Critical Issues At L.A. Event
http://www.sia.com/press/html/pr_cic_la.html
SEC
Wants Web Posting of Stock Dealings (Reuters)
... electronic distribution and the data will be made available on the
commission's Web site, www.sec.gov, and on
companies' sites....
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20021218/wr_nm/financial_holdings_sec_dc_3
Fines
offer paves way for Wall St abuse deal (FT.com)
Securities regulators yesterday made a fresh proposal on investment banks'
fines to try to clinch a historic settlement over Wall Street conflicts of
interest this week.
http://biz.yahoo.com/ft/021217/1039523754486_1.html
Research
Settlement Hung Up on 2 States (Reuters)
...It also includes the U.S. Securities and Exchange and NASD, formerly known
as the National Association of Securities Dealers....
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20021217/bs_nm/financial_brokerages_settlement_dc_1
Reports
Bond
Talk Today's Events
http://www.bondtalk.com/global.cfm?S=todaysevents
Miscellaneous
News
Options
Investing: Trading Tips for Success, Jeff Neal
http://biz.yahoo.com/opt/021217/372e8098c08a8e843cb09f80c0c7f431_1.html
Schwab
401k Participants Invest New Money in Bonds, Conservative Funds Through
Self-Directed Brokerage Accounts
http://www.businesswire.com/cgi-bin/cnn-storydisplay.cgi?story=/www/bw/webbox/bw.121802/223520029.htm&textcolor=%23000000&bgcolor=%23FFFFFF&linkcolor=%
Lehman
Brothers to Offer Prime Brokerage Clients Risk-Monitoring Tools
http://www.hedgeworld.com/news/read_news.cgi?section=tech&story=tech2698.html
Bank
worker accused of attack on IT network -The Times, 18-Dec-2002
A former employee in PaineWebber's computer systems team has been accused of
trying to drive down the company's stock price by disrupting its IT network.
http://www.timesonline.co.uk/article/0,,5-517539,00.html
Weary
regulators table new conflict settlement -Financial Times, 18-Dec-2002
State regulators are getting tired of the prolonged debate on the size of
analyst conflict settlements and have tabled a new deal that could minimise
further objections from the banks involved.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1039523754486&p=1012571727085
IBM,
Deutsche Bank Sign $2.56 Billion Tech Deal (Reuters)
U.S. computer giant International Business Machines Corp. (IBM.N) said on
Wednesday it signed a 10-year, 2.5 billion euro ($2.56 billion) deal with
Germany's Deutsche Bank (DBKGn.DE) to take over the financial group's computer
systems throughout Europe.
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20021218/tc_nm/tech_ibm_deutschebank_dc_1
Good
Sell Rules: The Best Hedge (Investor's Business Daily)
Who needs hedging strategies
if you can master sell rules?
http://biz.yahoo.com/ibd/021217/corner_1.html
Bear
Stearns earnings rise on fixed-income trading (FT.com)
Bear Stearns reported a 23 per cent rise in fourth quarter net income to
$190.5m, or $1.36 per share, lifted by strong bond trading and cost cutting.
http://biz.yahoo.com/ft/021218/1039523790913_2.html
Bond
Trading Aids Bear Stearns Profit
NEW YORK - Bear Stearns Cos. Inc. (BSC.N), a leading U.S. investment bank, on
Wednesday reported a 23 percent jump in quarterly earnings, beating analysts'
estimates on strong bond trading results and cost-cutting.
http://www.dfw.com/mld/dfw/business/4765985.htm
GNI Fund Management selects SunGard's Panorama risk system
GNI Fund Management is to deploy SunGard Trading and Risk Systems' real-time
portfolio analysis, risk management and processing system Panorama to support
its multi-manager fund business.
http://www.finextra.com/fullstory.asp?id=7602
Merrill
Lynch signs with Thomson Financial for wealth management system
Merrill Lynch has signed a contract with information vendor Thomson Financial
to jointly develop and implement a wealth management system. Specific terms of
the contract were not disclosed.
http://www.finextra.com/fullstory.asp?id=7601
CSFB's
Pershing and Intuit Announce Launch of Online Tax Center (PR Newswire)
Pershing, a Credit Suisse First Boston company, and Intuit, developers of the
popular TurboTax tax preparation software products, announced an agreement to
provide a comprehensive tax planning and support service to Pershing's
introducing broker-dealers customers and their clients.
http://biz.yahoo.com/prnews/021218/nyw081_1.html
John's
Comments
There
is a New Sheriff in Town
Yesterday's
top story about Espeed and the CBOT agreeing on an deal to provide access to
the CBOT's electronic futures markets from the screens to Espeed's cash
securities markets was a classic warning shot fired in the air signaling that
there is a new sheriff in town. Bernie Dan, who was named President of
the Chicago Board of Trade in early November when David Vitale left that role,
took little time to establish himself as a master strategist who is ready to
take the CBOT on to bigger and greater things. This was a wake up call
for long time and new rivals that a new era at the CBOT has arrived; The
Bernie Dan era.
With one
deal Bernie Dan accomplished the CBOT's long time goal of offering futures and
cash securities to traders on a single screen. This positions the CBOT
with another strong player with aligned interests, leveraging both entities
strengths to achieve more than they had working independently, or even at odds
with each other.
By doing
the unexpected (who woudda thought?), the CBOT has provided an example of what
can be done to maximize functionality, utility and more importantly market
transparency and integrity. This deal opens up CBOT futures markets to
greater numbers of non-futures traders who are cash market traders and to the
large players in the cash markets. It brings greater liquidity to the
CBOT futures markets by offering cash traders greater trading alternatives,
functionality and speed for trading.
Bernie Dan
is not alone in his brilliance for this move, as Howard Lutnick of Espeed
deserves plenty of credit also. Someone who knows Howard Lutnick tell him
John Lothian said he made a brilliant move with the CBOT deal, for whatever
that is worth.
***********
Here is the
CBOT's volume yesterday, including 2001 contracts of electronic options volume:
|
|
a/c/e |
Open Outcry |
Open
Interest |
Total
Exchange |
|
|
At Close |
Net Change |
||||
|
Futures |
442515 |
303464 |
2386102 |
-5557 |
745979 |
|
Options |
2001 |
180913 |
2997544 |
+44763 |
182914 |
|
Total |
444516 |
484377 |
5383646 |
+39206 |
928893 |
The CME saw
their emini S&P volume climb above 500,000 for the first time on Monday,
only to see it fall again below that figure at 497,826 contracts yesterday.
***********
Enough
said!
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 involves risk. Past results are no indication of future
performance.