Insights, analysis, and updates from the National Introducing Brokers Association
Futures with a Stop vs Defined Outcomes with Options Compare using futures with a stop to defined outcomes with options on futures, including specific trade examples. Click here for more information
CME Group, the world's leading and most diverse derivatives marketplace, today announced it will launch the next generation of its industry-leading Standard Portfolio Analysis of Risk (SPAN) margin framework – CME SPAN 2. The new framework is slated for testing in the second half of 2019 and, pending regulatory review and approval, roll out in the first half of 2020. CME SPAN 2 will provide enhanced risk management capabilities in a single, unified interface by maintaining SPAN's current calculations and functions while incorporating several new modeling, reporting and margin replication enhancements. As with SPAN, CME SPAN 2 will continue to be based on a Value at Risk (HVaR) framework, using historical data to model how a position or portfolio may gain or lose value under various risk scenarios. CME SPAN 2 will enable implementation of granular and dynamic adjustments to margins at a product and portfolio level. In addition, CME...
CME GROUP: Something Big Is Coming to Equities Trading. Micro E-mini Futures. Launching May 2019. Meet Micro E-mini futures, the next big thing in equities trading. Discover the benefits of trading equity index futures for a fraction of the financial commitment, with contracts 1/10th the size of classic E-mini futures. Visit cmegroup.com/microemini for the latest details.
Market relationships seem to have normalized: equities to fixed income, volatility to equities and fixed income, forex to the rest of the capital market. Jack Bouroudjian highlights those relationships and the impact they may have as we head into February. The post Market Update: Relationship Normalization appeared first on OpenMarkets. Source: CME Open Markets - Market Update: Relationship Normalization
For most global investors, U.S. dollar hedging was the only currency risk management strategy to follow in 2018. The dollar rose against all of its major developed market crosses – by 3.4 percent vs. the euro; 4.5 percent vs. Canadian dollar; 5.1 percent vs. pound sterling; 5.8 percent vs. Australian dollar; and a more modest 0.3 percent vs. the yen. Dollar strength against the supposed darlings of the emerging markets – the BRICs (Brazil, Russia, India and China) – was even more marked. The Brazilian real declined 15.1 percent against the USD, the Russian rouble 11.8 percent, Indian rupee 10.4 percent and the yuan by 4.2 percent. Long dollar was more than a good hedge, against a backdrop of generally declining asset prices it was among the trades of the year. The USD also burnished its credentials as a safe haven. When the S&P 500 peaked on 21 September 21,...
With the commencement of a new round of OPEC + Russia crude oil production cuts on January 1, many people are worried about a sudden and crippling rise in the price of gasoline at the pump. The relationship between oil prices and gasoline prices is notoriously hard to track. WTI crude oil prices fell from the high of $76.90 reached on October 3, 2018 to the recent low of $42.36 on December 24, a 45 percent drop. Gasoline prices, however, fell only 17.3 percent in that same time period. According to the Energy Information Administration (EIA), regular retail gasoline price averages dropped from $2.86 per gallon to $2.366 per gallon from the beginning of October to the end of December. Clearly the price of gasoline is not exactly correlated to the price of crude oil especially when price is falling quickly over a short span of time. So what is...
Earnings projections following the last earnings period were subdued, with input costs expected to rise for many companies. That hasn’t necessarily proven correct this earnings period. Jack Bouroudjian discusses the market result. The post Market Update: A Look at Earnings appeared first on OpenMarkets. Source: CME Open Markets - Market Update: A Look at Earnings
On November 14, 2018, CME bitcoin futures broke through the important $6,000 support level and lost more than 40 percent of their value in the next 12 days. On that same day gold futures accelerated off their lows and began an explosive 9 percent rally higher. Macro traders and analysts love dependable correlations between asset classes. The desire to spot a corollary trend is so great that maybe, just occasionally, some of us project a relationship before we have the real data to back it up. So gold and bitcoin started significant moves at the same time in opposing directions. Is that a big deal? Before we answer that question we have to figure out what bitcoin and gold actually are. Or, more appropriately, WHY they are. Analog and Digital Currency Protection Most of the bitcoin/crypto currency fanatics I know argue that bitcoin is an alternative currency that’s free of...
Domestic politics, geopolitics and earnings have delivered some bad news lately, leading to a slide in equity markets. Jack Bouroudjian looks at all three, and how they’re having an impact. The post Market Update: Taking a Breather appeared first on OpenMarkets. Source: CME Open Markets - Market Update: Taking a Breather
In January, ProShares changed its silver and gold ETFs to track futures-based indexes. This marks the first time leveraged and inverse ETFs will benchmark to gold and silver futures prices. Our silver and gold ETFs (AGQ, ZSL, UGL and GLL) are changing their benchmarks from the LBMA (London Bullion Market Association) silver and gold auction prices to Bloomberg Commodity Subindexes. So how did we get here? A number of factors drove us to change the way we obtain exposure for our silver and gold ETFs, but understanding the gold and silver exchange-traded product (ETP) landscape is an important starting point. Pricing for Physical Gold and Silver Among the $60 billion in overall silver and gold ETPs, about 98 percent of the assets are in funds that hold physical commodities, including the well-known SPDR Gold Shares ETF (GLD) and iShares Silver Trust ETF (SLV). Funds that hold and transact in physical...
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