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Tag Archive: Chicago Mercantile Exchange


Many of you may not be familiar with the name Richard Dennis. Dennis began his trading career at the age of 17 as an order runner to the Chicago Mercantile Exchange and went on to become one of Chicago’s most successful traders.

Dennis firmly believed that successful trading could be taught. To prove his point, he recruited and trained 21 men and 2 women in two groups, one from December 1983, and the other from December 1984. This group was known as the Turtles and for only two weeks he taught them all they needed to know to become successful traders including a simple trend-following system, trading a range of commodities, currencies, and bonds as well as how to  buy within a certain range and how to cut a position size during losing periods.

When the two-week training period was over, Dennis opened a trading account for each of the Turtles and had them how to use the systems they had been shown in order to trade. During this one-month trading period, they were allowed to trade a maximum of 12 contracts per market. At the completion of the trial period, he gave those Turtles who had successfully traded the system during the one-month trial from $250,000 to $2 million of his own money to manage.

When his experiment ended five years later, his Turtles reportedly had earned an aggregate profit of $175 million, proving without a doubt that anyone can learn to trade. See more on www.dailyforex.com. The exact system taught to the Turtles by Dennis has been published in at least two books.Many of the Turtles continued to trade and became recognized figures in their field.   Continue reading

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I did this post last year but the essence is clearly visible now so posting it again under new rules and regulations. images

Deja vu all over again, the over-reliance on ‘shaky’ collateral and concentration of risk is building once more – this time in the $648 trillion derivatives market. New Clearing House rules (a la Dodd-Frank) mean derivatives counterparties are required to pledge high quality collateral with the clearing houses (or exchanges) in a more formalized manner to cover potential losses.   Continue reading

European Commission regulators say that 13 investment banks, the International Swaps and Derivatives Association (Isda) and Markit imagesbreached antitrust rules by colluding to prevent exchanges from entering the credit derivatives business.

The formal European Commission charge-sheet, running to almost 400 pages, alleges collusion to ensure the insurance-like contracts remained an “over-the-counter” (OTC) product – preserving the banks’ lucrative role as middlemen.

Between 2006 and 2009, Deutsche Börse and the Chicago Mercantile Exchange tried to enter the credit derivatives business, turning to the Isda and Markit to obtain necessary licenses for data and index benchmarks. Continue reading

Dodd-Frank Trade Reporting isn’t coming … it’s here. February 28, 2013 was the date that Major Swap Participants (MSPs) were imagesrequired to begin reporting equity, foreign exchange and other commodity swaps. And this is just the beginning of a series of milestones in the regulation that was designed to prevent future “too big to fail scenarios,” such as what occurred during the Global Financial Crisis of 2008. But, there is a bigger story here around regulation and compliance and how IT is used to ensure transparency, accuracy and accountability in reporting.

Regulation, Regulation and more Regulation

While Dodd-Frank is a U.S. regulation under the supervision of the Commodities Futures Trading Commission (CFTC), any financial institution doing business with a U.S. bank will need to comply. Continue reading

Collateral Damage (film)

Deja vu all over again, the over-reliance on ‘shaky’ collateral and concentration of risk is building once more – this time in the $648 trillion derivatives market. New Clearing House rules (a la Dodd-Frank) mean derivatives counterparties are required to pledge high quality collateral with the clearing houses (or exchanges) in a more formalized manner to cover potential losses.

However, the safety bid combined with Central Banks monetization of every sovereign risk asset onto their balance sheet has reduced the amount of quality Continue reading

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