Brent Beats WTI Oil Trading as ICE Eclipses Nymex

  Photo:  geograph.org.uk

Brent Beats WTI Oil Trading as ICE Eclipses Nymex - Bloomberg

For the first time, London is overtaking New York as the global hub for trading oil futures.  More contracts in North Sea Brent crude changed hands in June than at any time on record, data from the ICE Futures Europe exchange show. It was the first full quarter and third consecutive month in which Brent trading on London’s ICE surpassed West Texas Intermediate oil on CME Group Inc. (CME)’s New York Mercantile Exchange.  The trend underlines London’s resilience as a financial center in the face of Europe’s sovereign debt crisis and supports Brent’s status as the benchmark grade for pricing more than half of the world’s oil. While North Sea output has fallen almost 50 percent in the past decade, a glut of landlocked North American crude has reduced WTI’s reliability as a gauge of global oil demand. 

Turn Around Tuesday For Grains?

Inside Futures: Relevant trading-focused information authored by key players in the futures, options and forex industries

Corn and soybeans ended lower on a quiet, choppy, two-sided trade day while wheat closed sharply lower.  Wheat was under pressure all day due to Russia not banning exports.  And a non event Fed decision saw the grains rally briefly only to pull back to where they were before the announcement.
It seems the grains are taking a bit of a much needed break in the wild volatility.  However, it could also be said that the bullish momentum is waning.  Really, I think that with weather being mostly the same and the fact that we have a lot of new news coming this Friday through next Friday the grains (and grain traders) are just taking a bit of a breather here.

Opportunities in monthly currency patterns

Opportunities in monthly currency patterns

With the first half of 2012 over, it’s a good time to spot opportunities that we may have missed in specific currency pairs.  With the currency markets naturally being dominated by headlines (the Eurozone sovereign debt crises and Chinese economic prospects), the tendency to be focused on the near-term is an understandable myopia.   However, a scan of monthly patterns in the currency pairs gives us a big-picture vantage point. It also provides insights into powerful multi-year underlying forces that don’t fade away on headlines. The monthly patterns filter out the noise of weekly and daily trading. There are two compelling technical patterns involving the euro. This is not an accident as the chaos in Europe cascades throughout global markets; Europe is a major contributor to world GDP and other regions react to European economic expectations.

Crossing boundaries with E-mini index options

Crossing boundaries with E-mini index options

Based on the same underlying indexes as larger contracts, mini equity index futures have the same advantages that come from trading large portfolios of equities with a single futures or options contract. The mini contracts carry lower margin requirements and, at the same time, provide significant leverage in being able to exploit market price changes at a moderate cost.

Knight market-making unit had ‘technical issue’ in early swings

Knight market-making unit had ‘technical issue’ in early swings

Aug. 1 (Bloomberg) -- Knight Capital Group Inc. told some clients of its market-making unit that a “technical issue” was affecting its systems and advised them to route orders elsewhere as dozens of U.S. stocks swung more than 10 percent today.  Knight, which helps execute billions of dollars in equity transactions every day, said the issue was confined to market making and other operations were unaffected. Its stock plunged as much as 26 percent as investors speculated on its role in the incident, which spurred concern that computers had distorted trading for the second time in two weeks.

Top CTAs May 2012

Top CTAs May 2012

Public Funds June 2012

Public Funds June 2012

5 notable U.S. droughts

5 notable U.S. droughts

It pales in comparison to the 400-year dry spell in Chile’s Atacama desert, but there’s no question that the U.S. is in the throes of a severe drought. And this summer’s parched conditions have resulted in all the usual side effects, including heat waves, wildfires and crop failures. Of course, this isn’t the first time the country has been starved for water. Here is our list of five especially notable droughts in U.S. history.

Are new all time highs coming in Cattle? If so, when?

Are new all time highs coming in Cattle? If so, when?

Last week October 2012 Live Cattle opened at $123.000 and closed the week at $125.275. In August 2012 Feeder Cattle opened at $136.325 and closed the week at $137.750.  Looking at the daily chart of live cattle you can see the large move up this past Friday. With ADX at 22.6 this is a weak trending market, but we see DI+ rising above DI-. MACD is bullish with increased divergence up off the signal line and MACD is moving further up away from the zero line on the histogram. Currently, Stochastics are nicely tucked into overbought territory. Watch for a possible correction off of $126.000, which is where the market is trading today. A close above $126.000 live cattle could retest $127.000.

Louis Bacon to return $2 billion to investors

Louis Bacon to return $2 billion to investors

Hedge fund titan Louis M. Bacon has decided to return about $2 billion to investors after a particularly tough second quarter this year when his fund was down 3.18%. The return is particularly revealing in showing how liquidity has evaporated and volatility has been exaggerated in the markets.  This has made trading particularly difficult for traders who swing for the fences on currencies, stocks and bonds, such as Bacon, Paul Tudor Jones and George Soros.

Trading the option ratio credit spread

Trading the option ratio credit spread

Question:  How can you add protection to a short option position and still profit while extending opportunity?

Answer:  The ratio credit spread

In today’s volatile markets it is wise to add an extra layer of protection to your option selling trades. An effective tool for this is the ratio credit spread. Also known simply as a ratio spread, this strategy offers a layer of protection along with the ability to profit more if the market moves against your short options. The basic concept involves selling out-of-the-money naked options and using part of the premium collected to buy a close to, or at-the-money option. The premium left over is called the credit. The number of options sold vs. the amount purchased is the ratio. Thus, if you sold three options for every option that you purchased, the ratio would be 3:1. If all of the options involved expire worthless, the trader’s profit will be the net credit he received after paying transaction costs.

Fed sees growth slowing, keeps low rates but no QE3

Fed sees growth slowing, keeps low rates but no QE3

Information received since the Federal Open Market Committee met in June suggests that economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, the housing sector remains depressed. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.

OIL FUTURES: Crude Flat Ahead of Inventories, Fed Announcement

   Photo:  ezioman

OIL FUTURES: Crude Flat Ahead of Inventories, Fed Announcement - WSJ.com

Oil futures paused Wednesday ahead of closely watched inventory data from the U.S. government and an announcement on monetary policy from the Federal Reserve.  Light, sweet crude for September delivery rose 40 cents, or 0.5%, to $88.46 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe rose 87 cents, or 0.8%, to $105.79 a barrel.

Gold prices fall ahead of Fed announcement

   Photo:  covilha

Gold prices fall ahead of Fed announcement | Reuters


Gold fell below $1,600 an ounce on Wednesday, a level it broke above last week after euro-friendly comments from the European Central Bank, as speculation lessened that the Federal Reserve would hint at a new round of monetary stimulus later in the day.  Analysts had hoped the Fed would give more guidance on the likelihood of gold-friendly action like monetary easing at the end of its two-day meeting on Wednesday, keeping pressure on long-term interest rates and curbing the dollar.  But better-than-expected jobs data, which boosted the dollar, helped dampen speculation of fresh stimulus measures, which a healthier snapshot of the jobs market makes less likely.  Spot gold was down 1 percent at $1,597.04 an ounce at 9:51 a.m. EDT (1351 GMT), while U.S. gold futures for August delivery were down $14.00 an ounce at $1,600.60.  The rally that took the metal to its highest since mid-June at $1,629.10 an ounce last week stalled against resistance. Gold remains within the $150 range it has held to for the last 3-1/2 months.