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CFTC Charges Three Firms with Oil Price Manipulation

MarketWatch — Tue, 24 May 2011 14:43:00 EST

SAN FRANCISCO -- A "manipulative" scheme that made unlawful profits on the price of crude oil was flagged in a complaint Tuesday by the Commodity Futures Trading Commission, a sign that the regulator is cracking down on potential speculation in energy markets.

The CFTC said it filed a civil enforcement action against Parnon Energy, Arcadia Petroleum of the United Kingdom, and Arcadia Energy of Switzerland in the U.S. District Court for the Southern District of New York.

Also charged were James Dyer of Australia and Nicholas Wildgoose of California for unlawfully manipulating and attempting to manipulate crude-futures prices on the New York Mercantile Exchange from January to April 2008.

The long-awaited $9 billion stock offering from AIG and the U.S. Treasury is on track to price late Tuesday despite recent market weakness. Randall Smith has details.

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The defendants allegedly made at least $50 million by cornering the supply of West Texas Intermediate light sweet crude at Cushing, Okla., the regulator alleged in its complaint. The pipeline hub there is the key point at which all crude futures are priced for trading on Nymex.

"Defendants conducted a manipulative cycle, driving the price of WTI to artificial highs and then back down, to make unlawful profits," the commission said in a statement.

The allegations come as the barrel's price has surged well above $100 in recent months. This month, crude prices slumped after CME Group (CME), the operator of Nymex, increased margin requirements for trading crude-futures contracts.

The last time crude spiked above $100 a barrel was in early 2008. At that time, speculation was at least partly blamed for the increases. When the global financial crisis hit in the second half of that year, crude slumped below $40 a barrel.

Parnon Energy is the trading and marketing arm of Parnon Holdings, which the CFTC said operates as a "common enterprise" with Arcadia Petroleum, based in London.

The affiliates traded West Texas Intermediate through a collective "WTI book" run by Dyer and Wildgoose, according to the CFTC's complaint.

Phone calls to Parnon's U.S. offices were referred to Colin Hurley, chief financial officer of Arcadia Petroleum in London. Calls to Hurley's phone weren't picked up.

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As Cotton Soars, How Should Investors Stitch It Into Their Portfolios?

Matthew Scott — Tue, 22 Feb 2011 09:15:00 EST

Filed under: Economy, Investing, Investing Basics, Market News

Investors are scrambling to stuff cotton into their portfolios as the price of the versatile commodity continues to soar. Cotton is up more than 171% since this time last year, hitting a 150-year high of $1.90 a pound on Feb. 11 and breaking through the $2-a-pound mark for the first time ever on Thursday. The price of cotton hasn't been this high since the Civil War, when it sold for $1.89 per pound (not adjusted for inflation).

Analysts now fear that $2 cotton might look like a bargain soon, as demand shows no sign of easing, and last year's stockpiles have been quickly depleted since October.

India is expected to fall far below its projected output this year due to export restrictions, which continue to tighten supply. Major floods in Pakistan and Australia devastated cotton crops in those nations last year, and it will likely take several months before their output ramps up enough to begin stabilizing prices. In the meantime, apparel exports from China surged 34% in January, and global demand for clothing from emerging markets continues to grow rapidly. If these trends continue, cotton prices are sure to keep rising.

Converting More Land to Cotton

On Thursday, cotton for May delivery rose 3.6% to a record $2.0193 on the ICE Futures exchange in New York, and cotton for March delivery jumped to a record $2.0402. The prospect of paying higher prices for cotton and other raw materials has prompted retailers to announce clothing price hikes of 10% or more, and it could get worse. There's no guarantee that the current crop will be enough to meet projected demand, and growers have only just begun to expand the number of acres devoted to cotton.

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"Although the type of weather-related problems crops suffered last year are impossible to predict and are unlikely to reoccur in exactly the same manner, the depletion of available stocks has put a premium on the ability of new plantings to yield ever-increasing amounts," says Robert Hyman, portfolio manager at Jefferies Asset Management. "Higher prices will undoubtedly induce more land to be converted to producing cotton. Plantings are expected to be up 15% in the U.S. Demand remains heavy and growing."

Hyman says corn and other commodities will likely experience similar price hikes because of weather-related supply problems from last year. Inability to judge the quantity of cotton and other commodities coming into the market may lead to large price swings as the year progresses. If growers overplant and crops are plentiful, prices could drop dramatically. But if weather destroys a significant fraction of crops for a second year in a row, prices could spike for some time if demand remains high.

Commodity investors are now trying to decide how much rally is left in cotton after the past year's dramatic rise. All indications are that demand is still increasing, and some believe cotton prices might even double again before beginning to decline.

Cotton Combinations Are the Way to Go

However, Hyman cautions individual investors from taking concentrated positions in specific commodities because wild price swings may result despite the possibility that prices will keep appreciating generally. "Even if you have the correct directional view, a concentrated futures position may produce a loss because of an intermediate adverse turn of prices," he warns. "Markets don't just move in one direction."

Hyman recommends combining investments in commodity futures, commodity equities and even physical ETFs to provide broad exposure to commodity markets for the long term. The iPath Dow Jones-UBS Cotton Subindex Total Return ETN (BAL), which tracks cotton, was up some 18% in January. While no mutual funds target cotton specifically, some exchange-traded funds do provide exposure to a variety of commodities. Among those are the PowerShares DB Commodity Index ETF (DBC), the iPath DJ-UBS Commodity Index Total Return ETN (DJP) and the iShares S&P GSCI Commodity Indexed Trust (GSG).

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Does It Matter That a German Exchange May Control the NYSE?

Peter Cohan — Thu, 10 Feb 2011 12:00:00 EST

Filed under: Investing, Investing Basics, NYSE, Market News, Investment

Capitalism has many ways of dealing with failure. If a company is small enough to fail without bringing down an entire industry or economy, it files for bankruptcy. If such a failure seems to threaten wider economic stability, the company gets a government bailout. And if it fails moderately but still has some assets with value, it gets acquired.

This last form of failure comes to mind in the case of NYSE Euronext (NYX). In 2005, it handled 80% of all trading in the stocks it listed. Today, that share is down to 23%, according to Bloomberg. New competitors have hacked away at its market share by offering superior service at a lower price.

And, as I reported in a DailyFinance article in June, the NYSE has been trying to offset some of the lost revenues by selling high-speed access to the NYSE's computers so hedge funds can trade a fraction of a second ahead of regular customers -- a practice that skims $3 billion out of investors' pockets each year. Now, Germany's 18-year-old Deutsche Boerse (DBOEY) wants to buy 60% of the combined companies for $10 billion in stock.

Considering that the NYSE is a storied American institution -- founded back in 1792 by traders standing beneath a buttonwood tree -- it's not unreasonable to ask whether the U.S. should allow a German company to control it. But the reality is that the luster of NYSE's name and history is far greater than its competitive position today. If Germany ever decided to close down the NYSE, nimbler U.S. exchanges would jump in immediately, eager to pick up the slack.

Computerized Competitors: Faster, Better, Cheaper

Investors don't decide where to trade based on an exchange's address: They want fast, inexpensive trade execution. And thanks to regulatory changes regarding what exchanges can charge, and an evolution of the industry structure that made room for new, computerized exchanges, that's what they get. A decade ago, it cost 6.25 cents to execute a 100-share trade. Today that cost is down to a penny.

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And unlike the NYSE, which still has a few costly specialists whose job is to match up buyers and sellers for a specific stock, the 50 computerized exchanges -- up from 20 in 2000 -- don't. So exchanges such as Getco, Bats Global Markets and Direct Edge can make money -- with margins as high as 55% for trading derivatives -- while offering low prices and fast execution, reports Bloomberg.

The NYSE has been going downhill for at least 40 years. The competition really got going in 1971 when the Nasdaq was formed to provide computerized trading and price quotes. In 1984, I consulted to the NYSE -- analyzing the competition it faced in the then-lucrative business of selling those price quotes. The business of charging for such quotes has essentially gone away.

Two scandals -- a 2003 flap over then-CEO Dick Grasso's $140 million compensation package and 2005's revelation that 15 NYSE specialists had manipulated prices to steal $19 million from clients -- tarnished the NYSE's remaining luster. In 2006, a reverse merger with Archipelago Holdings took the member-owned NYSE public.

A Decade of Merging for Leverage

If the Deutsche Boerse-NYSE Euronext merger goes through, it will be one among many similar marriages that have taken place over the last few years -- $95.8 billion worth since 2000, reports Bloomberg. The reason is simple: Once you build a computer system that can execute trades, the more trading volume you pump through the system, the higher your profits. This is bad news for people who work in the exchanges in jobs like sales, marketing and computer support. But it's better news for shareholders because mergers reduce costs.

If the two exchanges combine, they'll dominate the futures market. The Futures Industry Association estimates that the merged exchanges would be the top-ranked global futures trader, controlling 11 derivatives markets in the U.S. and Europe with 4.8 billion in contracts (based on last year's numbers). That's 55% more than 2010's futures leader, CME Group (CME).

For all the patriotic chest-thumping that might ensue over the idea of letting a German company control the NYSE, the truth is that the NYSE has been falling behind for decades. This merger is a way to rescue a failed company while it still has some salvage value.

As long as the U.S. can keep innovating in the creation of computerized exchanges, the price and speed of execution that investors want will keep improving -- and trading market share will shift to those innovators.

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ETFs in 2010: The Winners, the Losers and the Warnings

Sheryl Nance-Nash — Sat, 04 Dec 2010 06:00:00 EST

Filed under: Investing, ETFs, Investing Basics

The investment world's love affair with all things ETF did not wane in 2010, as their share of the market rose to $940 billion in assets, held in more than 1,000 exchange-traded funds.

There was plenty of excitement: Nearly 200 new distinct portfolio ETFs were introduced through Nov. 30, according to preliminary data from Morningstar (MORN). "ETF providers seemed ready to adapt Apple's (AAPL) marketing slogan, 'We have an app for that' and say 'We have an ETF for that,' " says Cameron Short, a certified investment management analyst with Stifel Nicolaus.

Then there was the flash crash drama. On May 6, about 20% of ETFs were temporarily snarled in the trading glitches that took place that day. At some point, about 210 of the then 980 ETFs changed hands at prices more than 50% below their ultimate closing price, according to Morningstar.

As for which funds have been hottest so far in 2010, preliminary data from Morningstar, Jan. 1 through Nov. 30, reveal winning categories: US ETF Commodities Precious Metals, up 118.38%; US ETF Equity Precious Metals, up 42.42%, US ETF Real Estate, up 23.75%; US ETF Small Growth, up 23.47% and US ETF Consumer Discretionary, up 23.46%. As for the laggards: US ETF Bear Market was down 29.55%; US ETF Commodities Energy, down 14.78%, US ETF Commodities Industrial Metals, down 5.42%; US ETF Europe Stock, down 3.81%, and US ETF Utilities down 1.12%.

There were a few lessons too. "Not all ETFs are the same," says John Bracket, a partner with BAR Financial. "Some of our MVP ETFs folded in 2010 because they did not have the asset base that would make them viable going forward. Some passive ETFs that we thought would be index trackers did not perform that way. We ran into illiquid ETFs that stunted our ability to get money out when we wanted it."

Tracking Commodities Is Trickier Than It Sounds

This year was all about commodities. "ETFs have become the vehicle of choice for exposure to the commodities market," says Short. But what concerns him is whether investors really get how a particular ETF, selected for exposure to a particular commodity, invests their money. ETFs gain exposure to a commodity by either investing directly in the futures market, or investing in publicly traded companies associated with a particular commodity. "Commodity ETFs rarely correlate exactly with the underlying commodity," Short explains.

"Investors need to determine if by purchasing ETFs they are acting as a trader (for the short term) or an investor (for the long-term)," he adds. Longer-term investors may not want to hold an ETF that invests directly in the futures market because the cost of rolling those futures contracts monthly and the possibility of contagion in future contract prices could hurt long term performance, he adds.

"ETFs that invest directly into the futures market are better suited for shorter-term investors who won't have to worry about the costs of rolling future contracts," says Short.

Beware of Leverage, Autopilot Investing, and Narrowness

Paul Brahim, executive vice president and managing director of BPU Investment Management, sites a couple of worrisome trends from 2010. "We are seeing growth in the number of ETFs being offered in three areas, and in each case, many investors are using ETFs in a way that can be dangerous to the health of their portfolio."

He points fingers at leveraged ETFs, which multiply the risks and rewards of the bets they make by investing on margin. Typically, a leveraged ETF will have as its goal shorting a universe of stocks, such as the S&P 500, and by leveraging, double their bet.

"These ETFs were designed for day-trading, but many small investors are buying them and holding them as a hedge, which is a mistake because when the bet goes wrong, the losses mount up quickly," says Brahim. Leveraged ETFs have caused some investors headaches by not delivering the expected result of double or triple performance versus their benchmark, adds Todd Millay, managing director of Choate Investment Advisors.

Second on Brahim's list are the suddenly popular target-date ETFs, which he says many people have started using in their self-directed 401(k)s, thinking that they are a "no-muss, no-fuss way of investing their money." Not so. "Target-date ETFs have all the disadvantages of target-date mutual funds, including the possibility of inappropriate allocation and the lack of control that the investor has over what's in the fund. Investors who use any target-date fund should remember that there should be no such thing as autopilot when it comes to an investment portfolio," he adds.

Next, he says narrow, narrow and more narrow is a trend is being misused by investors. "Financial companies continue to cut industry sectors into ever more narrow ETF slivers -- for example, ETFs that invest in water or corn, instead of ones that buy a basket of commodity companies. These ETFs are great for placing a bet on a narrow industry like solar energy or nanotechnology, but too many people buy a lot of 'slivered' ETFs and think they have achieved diversification, when in fact they have just placed a bunch of narrow bets," says Brahim.

Know Exactly What You're Investing In

While the proliferation of new launches ultimately should only benefit consumers, says W. Ross Singletary II, managing partner of Arcus Capital Partners, this trend does have the potential to create confusion. Eric Dunavant, president of Dunavant Wealth Group urges investors to be cautious about the type of ETFs they use. "Stick to traditional indexes like the S&P 500, Russell 2000, and MSCI EAFE," he advises. "If you want to diversify with other assets, stick to mutual funds with a longer track record of investing in those areas, especially commodities. These new ETFs may look fun and exciting, but if they are new, no one has any experience with what they will do. I wouldn't buy a mutual fund with less than 3 to 5 years of management experience, and I think the same goes for ETFs," he adds.

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Then too, not only is the overcrowded market confusing, it at times can be dangerous because it can lead to low liquidity on certain ETFs, adds Dunavant. Low volume often leads to wide spreads between bid prices and ask prices. That can mean that two investors purchasing the same low-volume ETF at roughly the same time, could pay dramatically different prices, points out Don Moulton, director of financial services at Retirement & Tax Planning Specialists. Worse, he says, when trying to sell the ETF, investors might find few buyers, and those buyers might only offer prices far below what most would consider fair market value, especially if you're selling during a market panic.

"The explosion in the last year has opened up the world of ETFs that can be as dangerous to investors as a loaded gun, especially to someone who has no idea how to handle one," says Dunavant. "Yet the marketplace wants to sell them as an easy way to invest. This overcrowding can also be confusing to financial advisers, many who don't have the time to research the nuances of all the new ETFs."

The first rule of investing, reminds Moulton, "is know what you're investing in. Just because an investment product says it tracks the price of a given commodity, it's very important to understand how it tracks that commodity's price."

As for 2011, the crystal ball gazers predict that ETFs will continue to take market share from traditional mutual funds. "They are cheaper, more liquid, allow access to strategies not possible through mutual funds, and within the equity and fixed income space, ETFs often have superior investment returns as compared to similar mutual funds," says David Roda, CEO of Roda Asset Management. ETF specialization will go further, carving out even smaller nooks and crannies in the investment world. ETFs are still one of the fastest growing investment vehicles, and right now, experts don't expect anything will slow them down.

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Traders Don't Expect Fed to Raise Interest Rate in 2011

Danny King — Fri, 03 Dec 2010 20:30:00 EST

Filed under: Economy, Investing, Market News

The Federal Reserve is unlikely to raise interest rates until mid-2012 in light of new unemployment figures, which signal a slow economic recovery, Reuters reported.

November's unemployment rate rose to 9.8% from 9.6% in October while the U.S. private sector added just 50,000 jobs -- about a third of what analysts had forecast -- the U.S. Labor Department announced Friday. Additionally, the underemployment rate, which includes both the unemployed and those working part time who are seeking full-time jobs, remained at a 17%, and the number of people out of work for at least six months increased to 6.3 million, the Labor Department said.

On the Chicago Board of Trade, short-term interest-rate futures traders aren't pricing in increases in the target interest rate for overnight lending between banks until May 2012, according to Reuters. Traders, who previously indicated that they thought the Federal government would curtail its plan to buy $600 billion in bonds to spur the economy, had been pricing in an interest-rate hike at about December 2011 before this latest jobs report.

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Why Futures and Options Expirations Won't Boost Wall Street

Matthew Scott — Thu, 16 Sep 2010 21:00:00 EST

Filed under: Economy, Investing

The "quadruple witching" hour -- when index futures, index options, equity options and security futures expire simultaneously -- is traditionally a time of higher trading volumes and investors decide what to do next. But if the low trading volumes so far this week are any indication, the next quadruple witching hour, scheduled Friday, will likely pass with barely a bump.

The investor uncertainty that has characterized the market's choppy performance seems to be going strong. For the entire month of September, investors have behaved as if someone cast a spell rendering them unable to rally or retreat from stocks.

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The market has been stuck in a small trading range of between 1040 and 1130 on the S&P 500 ($SPX) index for the last four months. And there's been a lower-than-normal volume of stock and options trades as investors try to figure out which way the market might head next. Even the approaching quadruple witching hasn't been able to energize traders.

"We are at a point where the economic numbers are a little bit better, but they are not good enough to convince the buyers or sellers to take a stance with any kind of conviction," says Nate Peterson, senior derivatives analyst for Charles Schwab. "It's a market where you continue to wait and see. As the [reports] come out, you look for indicators that will give you a reason to buy, or to short the market."

Waiting for News

Options investors seem to be waiting for news and economic reports to help them reassess their positions before making trades, Peterson says. As a result, the average options volume in September has slipped to 15 million contracts per week from the 20 million contracts per week the market averaged through May.

That options volume may stay low until closer to October, when companies may begin making announcements in advance of the earnings season, Peterson says. Those announcements may then give investors better clues to where the market is headed. Unfortunately, while providing some clarity for investors, those announcements can also create higher market volatility.

"Right now VIX futures are around 25 - so traders are not pricing in a lot of volatility for October," Peterson says, referring to the Chicago Board Options Exchange Market Volatility Index ($VIX), which measures the market's anticipated volatility based on the sale of S&P 500 index futures and options. Historically, volatility has usually grown during earnings seasons, and an increase in the market volatility index generally makes options and futures more expensive, so Friday may be traders' last chance to lock in positions before higher volatility -- and higher prices -- kicks in.

Leading up to the quadruple witching, some traders bought new options on Wednesday and Thursday, but it seems that most are waiting until next week to decide if they need options to protect their long positions. Those who choose to buy put options for that protection as earnings season approaches can likely get them cheap, relatively speaking, on Friday, Peterson says.

And getting cheaper protection would definitely take the hex out of quadruple witching.

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Trading futures in film blockbusters? Students can bet on it

Steven Kent — Sun, 18 Apr 2010 12:00:00 EST

Filed under: Investing, college finance

I'll admit it right off the bat: I'm an investment idiot. Business culture and the financial universe vex me, and I'd likely struggle to tell you the difference between a hedge fund and a garden hedge.

But pop culture? That I get better than most. And as a result I guessed, for instance. that "Clash of the Titans" would top the box office last weekend -- mostly as a salve for the "Avatar" hangover effect -- despite scads of awful reviews. Big whoop, right? I certainly didn't expect anyone to hand me a check for my motion picture prescience.

As of this week, though, all signs indicate that I'll soon find a new website willing to do just that.

Continue reading Trading futures in film blockbusters? Students can bet on it

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Good March Jobs Report Boosts Interest Rates, Stock Futures

Peter Cohan — Fri, 02 Apr 2010 11:08:00 EST

Filed under: Economy, Investing

Stock markets are closed for Good Friday, but the markets for stock futures and bonds opened for short sessions Friday morning, and those open markets reacted positively to the news that 162,000 new jobs had been created in March -- a good showing, though 28,000 fewer than economists expected. The unemployment rate remained at 9.7%. Interest rates and stock futures were up.

The increases in interest rates and stock futures were small but noticeable. The AP reported that the yield on the 10-year Treasury note rose three basis points (100 basis points equals 1%) to 3.90% Friday morning. That means slightly higher credit card rates. Meanwhile, The Wall Street Journal reported that Dow futures were up 17 points, S&P 500 futures inched up 1 point, and Nasdaq futures rose 6 points.

The modest positive reaction on a light volume trading part-day perhaps reflected the ephemeral nature of many of the jobs reported. The Journal pointed out that almost a third of those 162,000 new jobs were related to hiring for the census. However, CNNMoney noted that some economists expected all of March's gains to come from the census, so the two-thirds of the job gains which came from private employers' hiring were a pleasant surprise to investors.

And those private sector jobs appeared to be distributed among several industries. As CNNMoney reported, construction added 15,000 jobs -- a feat it had not accomplished in three years. Manufacturing added 17,000 jobs, 2,500 of which came from auto plants and their parts suppliers. Retailers added 15,000 jobs, and leisure and hospitality contributed 22,000 jobs to the total for March.

For those who think that the markets anticipate economic activity, these statistics provide evidence that President Obama's economic stimulus activities may be starting to bear fruit in the form of hiring to meet growing demand. With the S&P 500 up 39% since Obama's inauguration, the question for investors is whether now is the time to shift more money out of money-market funds and into stocks.

If those interest rate rises continue, they will reflect the markets' verdict that the risks of inflation outweigh those of deflation. And ultimately, the underlying economic growth reflected in that assumption means that we could be in for a virtuous cycle, wherein job growth boosts income, leading to increased consumer spending, rising demand, and more hiring. And that could provide fuel for a further rise in equities.

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A Struggling Brokerage House? Ex-Gov. Jon Corzine Should Fit Right In

Jonathan Berr — Wed, 24 Mar 2010 12:11:00 EST

Filed under: Company News, People, Media, ETFs

Former New Jersey Democratic Gov. Jon Corzine has more friends on Wall Street than he wound up with in the Garden State. Although the former Goldman Sachs (GS) co-chairman lost his bid for reelection in November to Republican Gov. Chris Christie, that hardly made him unemployable: He's now becoming chief executive of the struggling brokerage firm MF Global Holdings (MF), based in New York, which has reported four consecutive quarterly losses, The Wall Street Journal reported today.

Corzine succeeds Bernard W. Dan, who resigned as CEO and as a member of the board for what the company calls personal reasons. MF Global shares, up more than 90% over the past year, surged on the announcement, despite disappointing fiscal fourth-quarter revenue guidance of between $235 million and $245 million.

"Though we are surprised by current CEO Bernie Dan's departure. . . we consider Mr. Corzine's appointment as CEO and Chairman of MF a positive event for the company and the stock," wrote Keefe Bruyette and Woods analyst Niamh Alexander, who rates MF's shares as outperform, in a note to clients. "We see many parallels between Mr. Corzine's tenure at Goldman Sachs, running its fixed income institutional business and then later, running the company (and MF Global)...Importantly, Mr. Corzine's vision for MF appears to be inline with the goals MF has been targeting."

A Bad Bet on Wheat

Corzine, who went into politics after losing a power struggle at Goldman Sachs, also was appointed an operating partner at J.C. Flowers & Co., the private equity firm that acquired a stake in MF Global for $300 million in equity in 2008 to help MF pay down debt resulting from unauthorized bets on wheat futures. Corzine will also be a lecturer at Princeton University.

Since losing the election, Corzine has hardly hidden from the media. He has been a frequent guest on CNBC and energetically denied rumors that he was in line to replace Kenneth Lewis as chief executive of Bank of America (BAC).

But for Corzine, another run at public office seems unlikely at this point. As governor, he failed to convince New Jersey voters that he could tackle the state's financial problems -- despite his decades of experience on Wall Street. Gov. Christie has more of a common touch and has proposed a budget that critics consider Draconian and that he himself calls painful. Whether Corzine or Christie will be more successful in their respective new jobs remains to be seen.

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And...action! How to win Hollywood futures trading

Ron Dicker — Mon, 15 Mar 2010 15:30:00 EST

As the film world convenes this week at the ShoWest convention in Las Vegas, one of the hot topics is sure to be the box-office futures market. Come April, after expected approval by the U.S. Commodity Futures Trading Commission, industry and regular folks will be able to purchase futures derivatives from Cantor Fitzgerald that basically bet on or against the success of studio movies six months before they open.

The tally covers the first four weeks of domestic release. Shares will be worth a millionth of the film's expected total, so a predicted $100 million movie would offer $100 contracts. The minimum contract will be $50.

WalletPop wants kibitzers who fancy themselves Hollywood players to get a head-start, so we've enlisted an expert for tips on how to spot potential winners.

Continue reading And...action! How to win Hollywood futures trading

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Daily Blogwatch: The Best Futures Trader in the World; Plus, Why Apple Stock is Cheap

James Altucher — Thu, 04 Feb 2010 08:30:00 EST

Filed under: Columns, Economy, Investing

Some of the best reads for investors from the Web:

Great interview with economist James K. Galbraith about what caused the financial meltdown. I know, I know -- it's getting boring talking about it, but understanding all of its subtleties will help us avoid (or recognize) the next one.
___________

Interesting pair trade from BAM pair trading.
___________

Eight sneaky ways the government will try to raise your taxes.
___________

Continue reading Daily Blogwatch: The Best Futures Trader in the World; Plus, Why Apple Stock is Cheap

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Super Bowl tickets on a budget?

Bruce Watson — Fri, 04 Jan 2008 11:33:00 EST

Filed under: Family Money, Saving Money

If you've been thinking about going to the Super Bowl, chances are you've also been contemplating selling a kidney to make it happen. Before you climb into the ice bath and sharpen the scalpel, you might want to take a peek at Yoonew. The brainchild of a pair of Princeton engineers, Yoonew is an online futures exchange for premium ticket futures. Not only can it procure your coveted championship sports tickets, it can even help you get them for less than face value. Here's how it works:

1. Convinced that your team is going to go to the Super Bowl (or the Playoffs, or the World Series, or whatever), and desperate to see the boys in action, you go to the Yoonew website. Yoonew evaluates your team's chances of going to the big game. Based on their calculations, they offer a ticket future for the game. The price they charge is based on the probability that you will get the ticket. Thus, if your team has a minimal chance of going to the game, the ticket will be very, very cheap. If your team is likely to go, then the ticket will be more expensive.

2. Over the course of the season, your ticket value fluctuates, based on your team's changing fortunes. You can track the value of the ticket on the Yoonew site. Incidentally, this also gives you a pretty good indicator of how your team is doing.

Continue reading Super Bowl tickets on a budget?

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