Huge Marketing Error

Go over to cmegroup.com and count the number of clicks it takes you to find yesterday's settlement price for 10 year notes. Okay, how many clicks to find the price of an IOM badge at the CME division? How about the open interest in the December 2010 oat futures contract? I think you get the picture. The CME Group site is getting better.
Okay here's one for ya... Go the the website and find the settlement prices, volume and open interest for the new commodity spread options or CSOs. 'Still looking??? Heck, go find the data on DTN, CQG or any other data platform out there. You want to know how to find settlement prices? Easy, just put on a contract and look at your equity run each morning! Disclamer: electronic bids and offers are available on TT but I haven't seen them on any other trading platforms yet.
As an OTC market maker I get requests for quotes of CSOs all of the time. They are truely useful products. Won't somebody at CME Group get on the ball get the data out there? Also, the requests I get are for spreads like CZ09/CZ10 or SN10/SX10. CME doesn't list such exotic combinations. Oh well, 'their loss. I'll continue to make markets in the OTC world for what he customer wants.

The Hissing Sound Stops

Soybean volatility stopped its slide today with old crop up 1-2% and November up 1% at 40%. With the July/Nov spread trading as high as 194 today and up 60 cents in a week, one would think vol would be catching a bid somewhere here.

Energies had another truly impressive day today with July RBOB trading as much as 5 cents higher at one point today. As I've mentioned in the past, volatility has not followed price to higher levels through this upward price move but that appears to be changing. In the past five or so sessions, nearby vol has been bid up two to three percent and options one year out are one to two points higher. Its still early but as futures prices rise to levels where technical profit taking becomes probable, this uptick in vol may foretell a change in direction. My bet would be something short term with the major trend (up) remaining intact.

Ownership

I'm old enough to remember when most financial institutions were privately held. Such a structure goes a long way toward assuring that the guys taking the risks have their own skin in the game -- and more than just a bit of stock at that. It used to be at firms like Goldman Sachs that the ownership was made up of working (general) partners and retired (limited) partners. When your personal net worth and more is on the line you tend to seek out all of the facts and make good business decisions.

If the FED wasn't around to keep interest rates artificially low and, as a result, cause irrationally exuberant stock market performance, perhaps similarly irrational decisions to monetize these firms wouldn't have been made. As it is, every trading department is just a giant call option priced artificially low to the traders that they employ.

First Post

I am a commodity options market-maker and, almost by default, a critic follower of government policy. Over the past twenty years I have contributed to various financial newsletters (always under a pseudonym) and have started and stopped blogging on the economy and economic policy. I’m starting to blog once again as a means of personally chronicling the apparent intentional demise of our economic system and the rule of law that supports it. Expect to see me go off the handle on all issues regulatory whether championed by the left or the right. Occasionally I’ll say something entirely worthwhile and by recording it herein, I can look back and pat myself on the back for such insights ;-)