July 19, 2005

 

Lead Stories

 

OneChicago Select Indexes To Launch July 20

CHICAGO, IL – July 19, 2005 – OneChicago, LLC announced today the launch of the first new OneChicago Select Index, the beginning of a series of narrow-based security index futures to be rolled out that are specifically designed based on institutional customer requests.  OneChicago President Marty Doyle said, “OneChicago Select Indexes are a breakthrough product giving institutional firms a venue to customize their investment tools. Each Select Index will have a unique set of stock components while offering all the cost efficiencies inherent in standard narrow-based index futures.”

http://www.onechicago.com/060000_press_news/press_news_2005/07192005.html

 

**** OneChicago continues to epitomize a small opportunistic, innovative company, with the latest example being listing a new narrow based index contract designed by a customer.  They have created this customer customized contract because a client approached them with a trade they would like as a cleared, cash settled securities futures contract rather than an OTC contract.  OneChicago said yesterday they would be willing to list similar products that are customer customized if they also fit in their charter.  This is a good sign for security futures.  Customers are finding them and finding a use for the dynamics security futures bring.

 

**** These new contracts will trade mostly by EFP and block trades.  There will be no market maker in the contract, but they will be available to trade, though they are really for retail traders.  OneChicago has been aggressive with its EFP and block pricing in order to compete with the cash and OTC market for trades like this.  It appears to be working, as OneChicago is on a record volume pace for the month and set 7 consecutive open interest records this month.  OneChicago’s open interest high was on July 14 at 853,547 contracts, though today it sits at 680,406 following Friday’s expiration.  More listings are expected soon from OneChicago and don’t be surprised if they even bring back the micro-sector indices too.

 

**** This month’s average daily volume so far is 37,695 contracts over the first 11 days.  Good signs from the bright, innovative people at OneChicago.

 

CBOE seat fetches $755,000, an all-time high

CHICAGO, July 18 (Reuters) - A membership at the Chicago Board Options Exchange, the largest U.S. options market, sold for a record $755,000, up from the previous high of $750,000 set on March 11, 1998, the exchange said on Monday.  The latest sale price was up 153 percent from this year's first seat transaction of $299,000 on Jan. 6.  CBOE seat prices have gone up as the 32-year-old exchange implemented a hybrid system that integrates electronic and floor-based trading, which has helped increased market share and volume.

http://today.reuters.com/news/newsArticleSearch.aspx?storyID=169240+18-Jul-2005+RTRS&srch=cboe

 

CBOE SEAT SELLS FOR AN ALL-TIME RECORD; Sale Of $755,000 On Monday, July 18 Is Up 153% On Year

http://www.cboe.com/AboutCBOE/ShowDocument.aspx?DIR=ACNews&FILE=20050718.doc

 

Volume growth helps propel CBOE seat to record $755,000

Propelled by a surge in trading, seat prices have reached a record at the Chicago Board Options Exchange.

http://www.suntimes.com/output/business/cst-fin-cboe19.html

 

ISE Initiates Trading In ISE 250 Index

http://phx.corporate-ir.net/phoenix.zhtml?c=176358&p=irol-newsArticle&ID=732149&highlight=

 

Managers To Learn The Cost Of OTC Derivatives

Fund managers should be prudent when using over the counter derivatives, research by investment consultant Investit has shown. There is a simple assumption that OTC derivatives are superior to exchange-traded derivatives, due to their ability to meet bespoke investment strategies.

http://www.globalmoneymanagement.com/default.asp?page=1&SID=525632&ISS=17508

 

Nymex May Get Bid From Buyout Firm General Atlantic, People Say

July 19 (Bloomberg) -- The New York Mercantile Exchange, the world's biggest energy market, may have a second bidder for a stake in the company, according to three exchange members.  Buyout firm General Atlantic LLC is reviewing the exchange's finances and may make an offer in competition with a bid made in April by Blackstone Group LP and Battery Ventures, said the members, who asked not to be identified. General Atlantic is the biggest holder of shares of Archipelago Holdings Inc., which has agreed to merge with the New York Stock Exchange.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a08EhpEGdhnI&refer=home

 

Web site will let traders bet on hurricanes

MIAMI - (KRT) - Storm watchers, listen up. If you think you have the weather knowledge and financial fortitude, you'll soon have the chance to bet for - or against - the coastline nearest you.  A trio of professors at the University of Miami is launching an electronic futures market to forecast where a hurricane will make landfall in the United States.  Traders who buy or sell the right spot at the right time can cash in, maybe clearing enough profit to buy a small generator.

http://www.myrtlebeachonline.com/mld/myrtlebeachonline/news/nation/12168131.htm

 

City of London drives surge in UK financial exports

British insurance companies, banks and other financial institutions achieved net exports of £19bn ($31.92bn) in 2004, almost three times higher than their contribution to the UK's balance of payments a decade ago.

No other advanced country has enjoyed Britain's success in deriving a large increase in export earnings from its financial sector.  While Switzerland and Germany have modest trade surpluses in financial services, the US, Japan and France are net importers of the sector.

http://news.ft.com/cms/s/42839872-f7b6-11d9-9f64-00000e2511c8.html

 

Saudi bourse lets in brokerages

RIYADH: The Saudi Capital Market Authority (CMA) issued a new set of bylaws yesterday opening the door to brokerage houses in the country’s bourse, which currently operates only on an inter-bank basis.

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=45090&version=1&template_id=48&parent_id=28

 

From Russia (And Others) With Love: Know Your Politics

As global borders become increasingly porous and international economies more entwined, a hiccup in one country's political stability could cause economic tremors felt on a broad scale.

http://www.institutionalinvestor.com/default.asp?page=1&SID=525711&ISS=17383&type=3

 

Environmental Trading News

 

Commission battle over environment comes to head

The battle between members of the European Commission committed to improving environmental standards and those backing a pro-business agenda is expected to come to a head tomorrow, when the Brussels executive meets to determine the future of its environmental policies.

http://news.ft.com/cms/s/c7bc6d68-f7f0-11d9-9f64-00000e2511c8.html

 

Green Goals Are Big Business in U.K.

Green Goals Are Big Business in U.K. LONDON, July 18, 2005 - Businesses driven by social or environmental goals rather than profit are making some £18 billion in the U.K. every year and employ almost 800,000 people, says a government report on social enterprises.

http://www.earthvision.net/ColdFusion/News_Page1.cfm?NewsID=28412

 

Study: Ethanol Not Worth The Energy

(WCCO) A major study from Cornell University released Monday said ethanol is not worth the energy, and recommends wind power is where people should look for an alternative energy source.

That comes as shocking news to a corn-growing, ethanol-producing state such as Minnesota, leaving some to wonder if the billion-dollar ethanol business is in trouble after years to trading oil barrels for bushels of corn.

http://wcco.com/topstories/local_story_200110708.html

 

Exchange & ECN News

 

Speakers to Give Outlook on Commodity Sectors

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1027+29406,00.html

 

U.S. Soybean Crush & Export Demand Remains Robust

For the full report view the PDF within the link.

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1027+29400,00.html

 

Settlement Prices in Fed Fund Options

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+29407,00.html

 

NYSE Member Firms Report First-Quarter 2005 Results

http://www.nyse.com/press/1120732860998.html

 

Euronext Switches to 'Industry Classification Benchmark' (ICB) and Announces Revised Classification of Listed Companies

AMSTERDAM, BRUSSELS, LISBON, LONDON, PARIS, July 18, 2005 (PRIMEZONE) -- Euronext today published details of the stocks listed on its markets which are to be reclassified under the newly adopted "Industry Classification Benchmark" (ICB). This information appears in notice No. 2005-2976 released today and available on www.euronext.com (see Note). ICB was launched in January 2005 by FTSE Group and

http://au.biz.yahoo.com/050718/21/64cq.html

 

2004 Market Statistics

http://www.cboe.com/data/marketstats-2004.pdf

 

Amex welcomes 49 new listings in first half of 2005

Options business continues to face challenges

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29717&IdSection=15&cat=15

 

Specialist firms enjoy profit growth during Q1, NYSE says

Member profits slip

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29714&IdSection=15&cat=15

 

PHLX Announces Launch of KBW Regional Banking Index (KRX) and KBW Mortgage Finance Index (MFX)

http://www.phlx.com/news/pr2005/05pr071805.htm

 

Track Data's Track ECN Adds Tradebot as a Takeout Subscriber

Track Data Corporation today announced that its Track ECN has added Tradebot Systems, Inc. as a takeout subscriber. Previously, Tradebot had been a supplier of liquidity to Track ECN, but not a taker.

http://biz.yahoo.com/bw/050719/195229.html?.v=1

 

Instinet Group Names New Chief Technology Officer

Instinet Group Incorporated announced today that Instinet Group Chief Technology Officer Andrew Banhidi has decided to leave the company to pursue other interests. During his tenure, Andrew has spearheaded many of Instinet's efforts to develop technologically sophisticated products and services for its customers, led a strong technology team dedicated to modernizing Instinet's operations, and

http://biz.yahoo.com/bw/050719/195224.html?.v=1

 

MEFF is pleased to announce the new Members that have been approved by the Board:

Skandinaviska Enskilda Banken AB (PUBL), Trading Member, Stockholm.

Saxon Financials Ltd., Proprietary Trading Member, London.

http://www.meff.com/ing/indexi.htm

 

Regulatory News

 

The SEC News Digest

The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.

http://www.sec.gov/news/digest/dig071805.txt

 

Live and Learn: David Brown

Former OSC Chair David Brown reflects on his career as a lawyer, working for the government and life on the farm.

http://www.canadianbusiness.com/lifestyle/article.jsp?content=20050718_091421_5060

 

Vancouver broker breached securities rules

First Associates rep fined $25,000 for neglecting “gatekeeper” duties

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29722&IdSection=8&cat=8

 

Morgan Stanley hires former regulator as chief legal officer

Vice chairman to focus on key strategic issues

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29721&IdSection=9&cat=9

 

Gary Lynch Named Chief Legal Officer of Morgan Stanley

http://www.morganstanley.com/cgi-bin/morganstanley.com/pressroom.cgi?action=load&uid=429

 

Former UBS senior traders fined for falsifying trades

Pair ordered to pay $225,000 in penalties and costs

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29702&IdSection=8&cat=8

 

Andrew McLelland Named Academic Accounting Fellow For SEC Division Of Corporation Finance

http://www.sec.gov/news/press/2005-102.htm

 

SEC Charges Stock Promoters in Phony Fax Scam

http://www.sec.gov/news/press/2005-101.htm

 

FSA publishes recommendations of enforcement process review

http://www.fsa.gov.uk/pages/Library/Communication/PR/2005/082.shtml

 

BIS - Trading-Related Exposures for Basel II Finalised

http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2005-07-19-11176.html

 

Operational Risk – SEC Charges Stock Promoters in Phony Fax Scam

http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2005-07-19-11172.html

 

SEC sues 3 former i2 Technologies executives

WASHINGTON — The Securities and Exchange Commission has filed civil charges against three former executives of i2 Technologies Inc., accusing them of reaping about $140 million by playing key roles in a $1 billion revenue misstatement.

http://www.statesman.com/metrostate/content/gen/ap/SEC_i2_Technologies.html

 

NASD Keeps a Watchful Eye on EIAs

Regulator proposes that B-Ds treat equity indexed annuities as securities. July 5, 2005- With equity indexed annuities (EIAs) growing in popularity they have again come into the spotlight with securities regulators.

http://www.financial-planning.com/pubs/fpi/20050705102.html

 

Managed Futures - Managed Funds

 

Hedge funds may exacerbate credit risk -Fitch

LONDON, July 19 (Reuters) - The rise of hedge funds in the credit markets has forged links between previously unrelated segments, creating a risk that trouble in one area of the market could spread faster to others, Fitch Ratings warned on Tuesday. The credit ratings agency said hedge funds were an important source of capital to the market and could promote liquidity and diffuse credit risk, but it was concerned that the behaviour of these investment vehicles may exacerbate risks.

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=URI:urn:newsml:reuters.com:20050719:MTFH87666_2005-07-19_13-07-37_L1981939:1

 

Global ETF trading volume surges

LONDON (Reuters) - Global daily trading volume in exchange traded funds (ETFs), one of the fastest expanding sectors in world equity markets, jumped by 17.9 percent over the first half of 2005, Morgan Stanley said in a market review.

http://today.reuters.co.uk/Funds/FundsArticle.aspx?type=fundsNews&storyID=2005-07-19T072645Z_01_NOA926720_RTRUKOC_0_FUNDS-ETF-VOLUME.xml

 

Risks of credit-oriented hedge funds remain unknown, report says

Impact of funds on credit markets is greater than their assets under management would indicate

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29720&IdSection=1&cat=1

 

AIM Trimark leads U.S. firms in Internet services for advisors

Canadian sites offer more services to advisors, research firm says

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29719&IdSection=1&cat=1

 

Cars, diamonds among recovered KL assets

July-19-2005 - Various hard assets are washing up in the continuing effort to recover some of the $150 million of client capital KL Financial allegedly lost

http://www.marhedge.com/news/Cover.Hedge.asp?s=HedgeH-2005-07-19-11-11-34p1.htm

 

Man Group says AHL fund NAV up 0.12 pct from last week

LONDON (AFX) - Man Group PLC said that as at the close of business on July 18, the net asset value of Man AHL Diversified Futures Ltd was 24.17 usd, up 0.12 pct from last week and up 16.5 pct over the last 12 months.

http://www.iii.co.uk/news/?type=afxnews&articleid=5356756&subject=companies&action=article

 

Follow The Smart Money

We polled top financial pros to find five of their favorite funds.

http://www.businessweek.com/magazine/content/05_30/b3944407.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

 

ABN Amro counts cost of brokers’ defections

THE defection of ABN Amro Hoare Govett’s top corporate brokers cost the bank another top client yesterday when WH Smith dumped the Dutch bank for Merrill Lynch. 

http://business.timesonline.co.uk/article/0%2C%2C9063-1699210%2C00.html

 

BNP Paribas strengthens energy derivatives team

New York • July 18, 2005 • French bank BNP Paribas has strengthened its commodity derivatives team in New York, London and Singapore, particularly on the energy side.

http://db.riskwaters.com/public/showPage.html?page=287550

 

 Jefferies Group 2Q Profit Up 11 Percent

Financial services firm Jefferies Group Inc. on Tuesday said net income rose 11 percent, as a strong investment banking performance offset a drop in commissions from trading and underwriting activities.

http://biz.yahoo.com/ap/050719/earns_jefferies.html?.v=1

 

Belzberg Technologies To Hold Conference Call To Discuss Second Quarter 2005 Results

Belzberg Technologies announced today that at 4:00 p.m. on July 28, 2005 it will release its financial results for the three months ending June 30, 2005. Management will also host a conference call at 4:30 p.m. the same day to discuss their operating results and outlook.

http://biz.yahoo.com/prnews/050719/to091.html?.v=8

 

Merrill Lynch Posts Modest Earnings Rise

http://www.nytimes.com/aponline/business/AP-Earns-Merrill-Lynch.html

 

John's Comments

 

FT Letter to the Editor

 

I have submitted a letter to the editor of the FT with a John Lothian perspective on the issues raised by former CBOT Chairman Patrick Arbor in his letter to the FT that was included in this newsletter yesterday.  We shall see if my response is deemed peach-paper worthy.

 

*******

 

Brent Crude Watch

 

IPE Brent Volume: 98,725

NYMEX Brent Crude Volume: 5921

NYMEX Percent of Total Volume: 5.66%

 

********

 

Chicago Electronic Trading Scorecard for July 18, 2005

 

Percent Electronic

 

CBOT: 55.69%

CME: 62.57%

CME Eurodollars: 79.70%

CME Live Cattle: DNR

CME Currency Products: 84.22%

CBOT Soybeans: 13.22%

 

CBOT Options: 6.51%

CME Options: 2.53%

 

Volume 

 

OneChicago Volume: 44,805

Eurex US Volume: 4426

Euronext.liffe Eurodollar Volume: 13,059

CBOE Futures Exchange Volume: 251

 

Market Share

 

CBOT 100 oz. Gold Volume: 727

NYMEX 100 oz. Gold Volume: 40,505

CBOT Share: 1.76%

 

CBOT 5000 oz. Silver Volume: 113

NYMEX 5000 oz. Silver Volume: 8644

CBOT Share: 1.29%

 

CBOT Mini Gold Volume: 363

CBOT Mini Silver Volume: 207

 

CME Emini Russell 1000 (100X) Volume: 1730

Eurex US Mini Russell 1000 (100X) Volume: 469

NYBOT Mini Russell 1000 (50X) Volume: 222

CFE Mini Russell 1000 (100X) Volume: 30

 

CME Emini Russell 2000 Volume: 78,030

Eurex US Mini Russell 2000 Volume: 3837

CFE Mini Russell 2000 Volume: 0

 

Notes: OneChicago is on pace to have another record month.

 

Liffe Eurodollar Over-Under

 

Liffe/Globex: 2.43%

Liffe/CME: 1.95%

 

Regards,

 

John J. Lothian

Publisher

John Lothian Newsletter 

www.johnlothiannewsletter.com

 

Futures Brokerage - Business Intelligence   John J. Lothian President- Electronic Trading Division The Price Futures Group, Inc. 141 West Jackson Blvd., Suite 1340A Chicago, IL 60604 jlothian@pricegroup.com johnlothian@johnlothian.com IM: LothianJohnJ http://www.pricegroupetd.com tel: tel2: fax: mobile: +1 312-264-4350 +1 800-713-0215 +1 312-264-4399 +1 312-203-5515

Add me to your address book... Want a signature like this?

 

 

Disclaimer: The John Lothian Newsletter is a product of John J. Lothian & Company, Inc.  The opinions expressed are strictly the opinion of John Lothian, and not necessarily those of his employer, 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.

 

This is an opt-in newsletter.  If you wish to unsubscribe, please check the address of list you are receiving the newsletter from and then click on the appropriate link below.

 

mailto:johnlothiannewsletter-request@johnlothiannewsletter.com?subject=unsubscribe

 

mailto:johnlothiannewsletter1-request@johnlothiannewsletter.com?subject=unsubscribe

 

mailto:johnlothiannewsletter2-request@johnlothiannewsletter.com?subject=unsubscribe

 

mailto:johnlothiannewsletter3-request@johnlothiannewsletter.com?subject=unsubscribe

 

mailto:johnlothiannewsletter4-request@johnlothiannewsletter.com?subject=unsubscribe

 

mailto:johnlothiannewsletter5-request@johnlothiannewsletter.com?subject=unsubscribe

 

If the unsubscribe links above do not work for you, please send an email to johnlothian@johnlothian.com with unsubscribe in the subject line.

 

This is a voluntary pay newsletter.  The voluntary pay fee for a 1-year subscription is $95, or $55 for 6-months.  For more details about this, or to sign up to receive the newsletter, please go to www.johnlothiannewsletter.com.