You may have heard of the DJ DAX and EURO STOXX and you’re wondering what these are. Contrary to what you might expect, they’re not stores in SoHo or slim geeks dueling on the wheels of steel. These are both equity futures contracts traded at Eurex, which is the second largest derivatives exchange in the [...]
The battle for the CBOT between CME and ICE is illustrative of the future of futures. Futures exchanges are no longer simply markets, but for-profit businesses, and unlike most for-profit businesses or even most exchanges special considerations must be made. Futures contracts are not like stocks, which can be bought at one exchange and sold [...]
In most people’s minds finance and economics are the domains of clear, quantitative thinking. Economists merely uncover financial truth one after another as they develop new mathematical tools for modeling capital and how wealth is created. Markets, likewise, are ethereal natural forces tapped into rather than created. In truth, the assumptions that underly the pricing [...]
To see how trading in the futures markets work, consider these examples. 1. Trading the S&P 500 futures The E-mini S&P 500 is a popular equity futures contract to trade. Let’s say you thought the S&P 500 was going to increase in value. Instead of buying a number of shares to sell later at a [...]
India banned futures trading in wheat and rice yesterday. According to the UN’s Food and Agriculture Organization, India is the world’s second largest producer of wheat. India just began importing wheat after 6 years and recently banned exports. Prime Minister Manmohan Singh is facing unrest as inflation rises. India is also potentially faced with lowering [...]
Given the recent fears from the overheated real estate market, a record trade deficit and the squeeze put on by historically high energy prices, it’s easy to be concerned about inflation. Commodities have historically been used as a hedge against inflation, and that hasn’t changed. What has changed is how accessible the ability to allocate [...]
[Disclaimer: I work with Jason Jankovsky on trader education] The markets come with their own basic rules. In the case of futures and foreign exchange, the most important rule is that these are zero sum markets. That is, for every winner there is a loser. The other basic rule is that order flow dictates price [...]
What are the futures markets? Let’s begin with a story about trains. Before trains, the nation was divided into small markets for various commodities, but with trains came the first truly national markets. Now it was cheap for farmers and grain merchants to deliver goods to the places that needed them most - and would [...]
Unions vote to accept public sector pension changes
Unions have agreed to proposed changes to the Local Government Pension Scheme (LGPS), ending a long-running dispute with the government over the reforms. Members of Unison and Unite, two of the UK’s largest unions, voted in support of the reforms, with 84 per cent of Unite members voting to accept the changes and 90 per [...]
RBS could receive higher fine than Barclays for rate-rigging
The Royal Bank of Scotland could be more heavily involved in inter-bank rate fixing than Barclays, an MP has suggested. John Mann, a Labour MP on the Treasury select committee, speculated that RBS could receive a fine in excess of the £290 million incurred by Barclays, if the allegations prove true. A source from within [...]
Rich have benefited most from quantitative easing
The Bank of England has admitted in a new report that the richest 5 per cent of UK households have benefitted the most from its quantitative easing (QE) programme. The Bank launched the programme in March 2009, in an effort to revive economic growth. In total it has bought £375bn of government bonds, known as [...]
ABI calls for transparency over pension charges
A ‘protocol’ should be given to members of company and private pension schemes, giving clear information on charges, the Association of British Insurers (ABI) says. The ABI’s call for pension charges to be made clearer comes prior to the introduction of automatic enrolment in autumn, when employers will be required to enrol workers in a [...]
Report tackles shortage of rented homes
With soaring demand for accommodation pushing rents to an all-time high, a new report suggests that rules on affordable homes should be relaxed to encourage the building of homes for rent. The average rent paid by private tenants in England and Wales reached £725 a month in July according to property group LSL. The government [...]
Police seize millionth uninsured vehicle
Police have seized the millionth uninsured vehicle, indicating the size of the problem of uninsured driving in the UK. The vehicle was seized in Birmingham, which is one of UK’s motor insurance evasion hotspots. According to the Motor Insurers’ Bureau (MIB), Bordesley in Birmingham has now replaced the Barkerend area of Bradford as the place [...]
Mortgage fraud increases by 23 per cent
Information services company Experian has reported a 23 per cent increase in the number of people giving false information in order to obtain a mortgage. In the second quarter of this year, 39 out of every 10,000 mortgage applications were found to be fraudulent, compared with 32 in the 2011 second quarter. Lenders have tightened [...]
Government to crack down on hidden credit card charges
Tougher rules are to be brought in to protect consumers from hidden credit card charges and premium-rate phone calls to customer service departments. The Government has launched a consultation on how to implement the changes, which are required under a European Consumer Rights Directive and will apply to countries across the European Union. The new [...]
Which? report claims free banking is a myth
A new report by consumer group Which? highlights the high charges that can be applied to ‘free’ current accounts. While these accounts are free while in credit, charges can be applied if a customer goes overdrawn, especially if they do so without permission. Customers can also be charged for overseas transactions and for agreed overdrafts. [...]
Households more optimistic about their finances
Household finances are still deteriorating, but at a slower rate, according to the Markit household finance index. The index increased from 37.5 in July to 38.9 in August, with figures above 50 representing a positive change in household finances, and figures below 50 representing a negative change. The August figure represents the third consecutive monthly [...]
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