Wallstreet1928 Analysis & live calls on FTSE,DAX,S&P...aimed to help New traders

[Dentalfloss]

dow
8 day candles

 

[wallstreet1928]

Anyone know where i can get more information and understanding of the E-mini S&P500, mini-dow, mini-ftse etc

? Thanks

I'm sorry my friend

I am not experienced enough to inform you

search for a chap by the name of trader dante on this forum and PM him, he will give you a comprehensive answer.

 

[Dentalfloss]

I'm sorry my friend

I am not experienced enough to inform you

search for a chap by the name of trader dante on this forum and PM him, he will give you a comprehensive answer.

the futures contract
Pricing
The situation where the price of a commodity for future delivery is higher than the spot price, or where a far future delivery price is higher than a nearer future delivery, is known as contango. The reverse, where the price of a commodity for future delivery is lower than the spot price, or where a far future delivery price is lower than a nearer future delivery, is known as backwardation.

When the deliverable asset exists in plentiful supply, or may be freely created, then the price of a future is determined via arbitrage arguments. The forward price represents the expected future value of the underlying discounted at the risk free rate—as any deviation from the theoretical price will afford investors a riskless profit opportunity and should be arbitraged away; see rational pricing of futures.

Thus, for a simple, non-dividend paying asset, the value of the future/forward, F(t), will be found by compounding the present value S(t) at time t to maturity T by the rate of risk-free return r.


or, with continuous compounding


This relationship may be modified for storage costs, dividends, dividend yields, and convenience yields.

In a perfect market the relationship between futures and spot prices depends only on the above variables; in practice there are various market imperfections (transaction costs, differential borrowing and lending rates, restrictions on short selling) that prevent complete arbitrage. Thus, the futures price in fact varies within arbitrage boundaries around the theoretical price.

The above relationship, therefore, is typical for stock index futures, treasury bond futures, and futures on physical commodities when they are in supply (e.g. on corn after the harvest). However, when the deliverable commodity is not in plentiful supply or when it does not yet exist, for example on wheat before the harvest or on Eurodollar Futures or Federal funds rate futures (in which the supposed underlying instrument is to be created upon the delivery date), the futures price cannot be fixed by arbitrage. In this scenario there is only one force setting the price, which is simple supply and demand for the future asset, as expressed by supply and demand for the futures contract.

In a deep and liquid market, this supply and demand would be expected to balance out at a price which represents an unbiased expectation of the future price of the actual asset and so be given by the simple relationship

.
In fact, this relationship will hold in a no-arbitrage setting when we take expectations with respect to the risk-neutral probability. In other words: a futures price is martingale with respect to the risk-neutral probability.

With this pricing rule, a speculator is expected to break even when the futures market fairly prices the deliverable commodity.

In a shallow and illiquid market, or in a market in which large quantities of the deliverable asset have been deliberately withheld from market participants (an illegal action known as cornering the market), the market clearing price for the future may still represent the balance between supply and demand but the relationship between this price and the expected future price of the asset can break down.


[edit] Futures contracts and exchanges
Contracts

There are many different kinds of futures contracts, reflecting the many different kinds of "tradable" assets about which the contract may be based such as commodities, securities (such as single-stock futures), currencies or intangibles such as interest rates and indexes. For information on futures markets in specific underlying commodity markets, follow the links. For a list of tradable commodities futures contracts, see List of traded commodities. See also the futures exchange article.

Foreign exchange market
Money market
Bond market
Equity index market
Soft Commodities market
Trading on commodities began in Japan in the 18th century with the trading of rice and silk, and similarly in Holland with tulip bulbs. Trading in the US began in the mid 19th century, when central grain markets were established and a marketplace was created for farmers to bring their commodities and sell them either for immediate delivery (also called spot or cash market) or for forward delivery. These forward contracts were private contracts between buyers and sellers and became the forerunner to today's exchange-traded futures contracts. Although contract trading began with traditional commodities such as grains, meat and livestock, exchange trading has expanded to include metals, energy, currency and currency indexes, equities and equity indexes, government interest rates and private interest rates.


Exchanges

Contracts on financial instruments was introduced in the 1970s by the Chicago Mercantile Exchange (CME) and these instruments became hugely successful and quickly overtook commodities futures in terms of trading volume and global accessibility to the markets. This innovation led to the introduction of many new futures exchanges worldwide, such as the London International Financial Futures Exchange in 1982 (now Euronext.liffe), Deutsche Terminbörse (now Eurex) and the Tokyo Commodity Exchange (TOCOM). Today, there are more than 75 futures and futures options exchanges worldwide trading to include:

CME Group (formerly CBOT and CME) -- Currencies, Various Interest Rate derivatives (including US Bonds); Agricultural (Corn, Soybeans, Soy Products, Wheat, Pork, Cattle, Butter, Milk); Index (Dow Jones Industrial Average); Metals (Gold, Silver), Index (NASDAQ, S&P, etc)
ICE Futures - the International Petroleum Exchange trades energy including crude oil, heating oil, natural gas and unleaded gas and merged with IntercontinentalExchange (ICE) to form ICE Futures.
NYSE Euronext - which absorbed Euronext into which London International Financial Futures and Options Exchange or LIFFE (pronounced 'LIFE-ee') was merged. (LIFFE had taken over London Commodities Exchange ("LCE") in 1996)- softs: grains and meats. Inactive market in Baltic Exchange shipping. Index futures include EURIBOR, FTSE 100, CAC 40, AEX index.
South African Futures Exchange - SAFEX
Sydney Futures Exchange
Tokyo Stock Exchange TSE (JGB Futures, TOPIX Futures)
Tokyo Commodity Exchange TOCOM
Tokyo Financial Exchange - TFX - (Euroyen Futures, OverNight CallRate Futures, SpotNext RepoRate Futures)
Osaka Securities Exchange OSE (Nikkei Futures, RNP Futures)
London Metal Exchange - metals: copper, aluminium, lead, zinc, nickel, tin and steel
New York Board of Trade - softs: cocoa, coffee, cotton, orange juice, sugar
New York Mercantile Exchange - energy and metals: crude oil, gasoline, heating oil, natural gas, coal, propane, gold, silver, platinum, copper, aluminum and palladium
Dubai Mercantile Exchange
Korea Exchange - KRX
Singapore Exchange - SGX - into which merged Singapore International Monetary Exchange (SIMEX)

[edit] Who trades futures?
Futures traders are traditionally placed in one of two groups: hedgers, who have an interest in the underlying asset (which could include an intangible such as an index or interest rate) and are seeking to hedge out the risk of price changes; and speculators, who seek to make a profit by predicting market moves and opening a derivative (finance) contract related to the asset "on paper", while they have no practical use or intend to actually take or make delivery of the underlying asset. In other words, the investor is seeking exposure to the asset in a long future or the opposite effect via a short future contract.

Hedgers typically include producers and consumers of a commodity or the owner of an asset or assets subject to certain influences such as an interest rate.

For example, in traditional commodity markets, farmers often sell futures contracts for the crops and livestock they produce to guarantee a certain price, making it easier for them to plan. Similarly, livestock producers often purchase futures to cover their feed costs, so that they can plan on a fixed cost for feed. In modern (financial) markets, "producers" of interest rate swaps or equity derivative products will use financial futures or equity index futures to reduce or remove the risk on the swap.

An example that has both hedge and speculative notions involves a mutual fund or separately managed account whose investment objective is to track the performance of a stock index such as the S&P 500 stock index. The Portfolio manager often "equitizes" cash inflows in an easy and cost effective manor by investing in (opening long) S&P 500 stock index futures. This gains the portfolio exposure to the index which is consistent with the fund or account investment objective without having to buy an appropriate proportion of each of the individual 500 stocks just yet. This also preserves balanced diversification, maintains a higher degree of the percent of assets invested in the market and helps reduce tracking error in the performance of the fund/account. When it is economically feasible (an efficient amount of shares of every individual position within the fund or account can be purchased), the portfolio manager can close the contract and make purchases of each individual stock.

The social utility of futures markets is considered to be mainly in the transfer of risk, and increase liquidity between traders with different risk and time preferences, from a hedger to a speculator, for example.


[edit] Options on futures
In many cases, options are traded on futures, sometimes called simply "futures options". A put is the option to sell a futures contract, and a call is the option to buy a futures contract. For both, the option strike price is the specified futures price at which the future is traded if the option is exercised. See the Black-Scholes model, which is the most popular method for pricing these option contracts.


[edit] Futures contract regulations
All futures transactions in the United States are regulated by the Commodity Futures Trading Commission (CFTC), an independent agency of the United States government. The Commission has the right to hand out fines and other punishments for an individual or company who breaks any rules. Although by law the commission regulates all transactions, each exchange can have its own rule, and under contract can fine companies for different things or extend the fine that the CFTC hands out.

The CFTC publishes weekly reports containing details of the open interest of market participants for each market-segment that has more than 20 participants. These reports are released every Friday (including data from the previous Tuesday) and contain data on open interest split by reportable and non-reportable open interest as well as commercial and non-commercial open interest. This type of report is referred to as the 'Commitments of Traders Report', COT-Report or simply COTR.


[edit] Formal definition of futures contract
Following Björk[5] we give a formal definition of a futures contract. We describe a futures contract with delivery of 100 Google stocks at the time T:

There exists in the market a quoted price F(t,T), which is known as the futures price at time t for delivery of 100 Google Stocks at time T.
At time T, the holder pays F(t,T) and is entitled to receive 100 Google stocks.
During any time interval (s,t], the holder receives the amount F(t,T) − F(s,T).
The spot price of obtaining the futures contract is equal to zero, for all time t such that t < T.

[edit] See also
List of finance topics
Agriculture
Freight derivatives
List of traded commodities
Seasonal spread trading
Prediction market
1256 Contract
Onion Futures Act
Grain Futures Act
Commodity Exchange Act

[edit] Notes
1.^ Sullivan, Arthur; Steven M. Sheffrin (2003), Economics: Principles in action, Upper Saddle River, New Jersey 07458: Pearson Prentice Hall, pp. 288, ISBN 0-13-063085-3, Pearson School: Home
2.^ Hull, John C. (2005), Options, Futures and Other Derivatives (excerpt by Fan Zhang) (6th ed.), Prentice-Hall, ISBN 0131499084, Economics Reference: Futures ?(Fan Zhang)?
3.^ Aristotle, Politics, trans. Benjamin Jowett, vol. 2, The Great Books of the Western World, book 1, chap. 11, p. 453.
4.^ Henriques, D Mysterious discrepancies in grain prices baffle experts, International Herald Tribune, March 23, 2008. Accessed April 12, 2008
5.^ Björk: Arbitrage theory in continuous time, Cambridge university press, 2004

[edit] References
The Institute for Financial Markets (2003). Futures & Options. Washington, DC: The IFM. p. 237.
Redhead, Keith (1997). Financial Derivatives: An Introduction to Futures, Forwards, Options and Swaps. London: Prentice-Hall. ISBN 013241399X.
Lioui, Abraham; Poncet, Patrice (2005). Dynamic Asset Allocation with Forwards and Futures. New York: Springer. ISBN 0387241078.
Valdez, Steven (2000). An Introduction To Global Financial Markets (3rd ed.). Basingstoke, Hampshire: Macmillan Press. ISBN 0333764471.
Arditti, Fred D. (1996). Derivatives: A Comprehensive Resource for Options, Futures, Interest Rate Swaps, and Mortgage Securities. Boston: Harvard Business School Press. ISBN 0875845606.

[edit] U.S. Futures exchanges and regulators
Chicago Board of Trade, now part of CME Group
Chicago Mercantile Exchange, now part of CME Group
Commodity Futures Trading Commission
National Futures Association
Kansas City Board of Trade
New York Board of Trade now ICE
New York Mercantile Exchange, now part of CME Group
Minneapolis Grain Exchange

[edit] External links
Institute for Financial Market, nonprofit educational foundation on futures & options
Curving Futures : Plotting current and historic market data
Futures Educational Forum
Man Financial : A Guide to Margins & Order Entry
Hot Commodities, Stuffed Markets, and Empty Bellies: What's behind higher food prices? from Dollars & Sense, July/August 2008
BBC Oil Futures Investigation
Understanding Commodity Seasonality Seasonal charts and explanations of why prices tend to move from a supply/demand perspective
Seasonal Futures Charts Commodity Futures Charts, Commodity Futures Quotes, Seasonal Charts, Spread Charts
[hide]v • d • eDerivatives market

Derivative (finance)

Options Terms Credit spread · Debit spread · Expiration · Open interest · Pin risk · Risk-free rate · Strike price · The Greeks · Volatility


Vanilla options Bond option · Call · Employee stock option · Fixed income · FX · Option styles · Put · Warrants


Exotic options Asian · Barrier · Binary · Cliquet · Compound option · Forward start option · Interest rate option · Lookback · Mountain range · Rainbow option · Swaption


Options strategies Butterfly · Collar · Covered call · Iron condor · Naked put · Straddle · Strangle


Options spreads Backspread · Bear spread · Bull spread · Calendar spread · Ratio spread · Vertical spread


Valuation of options Binomial · Black · Black-Scholes · Moneyness · Option time value · Put-call parity · Simulation



Swaps Basis swap · Constant maturity swap · Credit default swap · Currency swap · Equity swap · Forex swap · Inflation swap · Interest rate swap · Total return swap · Variance swap · Volatility swap


Forwards and Futures Forward market · Forward price · Forward rate · Margin · Contango · Backwardation · Single-stock futures · Interest rate future · Financial future · Currency future · Commodity futures


Other derivatives CLN · CPPI · Credit derivative · ELN · Equity derivative · Foreign exchange derivative · Fund derivative · Inflation derivatives · Interest rate derivative · PRDC · Real estate derivatives


Market issues Tax policy · Consumer debt · Corporate debt · Sovereign debt · Climate change · Resource depletion · Late 2000s recession


Retrieved from "http://en.wikipedia.org/wiki/Futures_contract"
Categories: Derivatives
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[Dentalfloss]

halotrader
that is the stuff from wikipedia

 

[Dentalfloss]

ws..you are not posting stuff from sir william anymore
any reason.?

 

[Dentalfloss]

dollar index..daily candles
greenback going back up

 

[wallstreet1928]

ws..you are not posting stuff from sir william anymore
any reason.?

Mr William is keeping well, I don't have much contact now as he is a busy person

I think he is focusing on another strategy and doing some research

 

[wallstreet1928]

dollar index..daily candles
greenback going back up

where can I get access to dollar index chart Dentist?

 

[Dentalfloss]

netdania.com

 

[Dentalfloss]

wti crude..daily

 

[Dentalfloss]

dollar index.symbol is $ dxy on marketwatch.com
there is resistance at 82.0 area
14 day candles

 

[Dentalfloss]

dollar index

What is US Dollar Indexsup>®?
Just as Dow Jones Industrial Average reflects the general state of American stock market, US Dollar Index (USDXsup>®) reflects the general assessment of US Dollar. USDX does it through exchange rates averaging of US Dollar and six most tradable global currencies.


USDX = 50.14348112 × EURUSD−0.576 × USDJPY0.136 × GBPUSD−0.119 × USDCAD0.091 × USDSEK0.042 × USDCHF0.036
Those 20 countries (15 eurozone countries and five other countries, whose currencies are represented in USDX) make up the basis of global trade with the USA, have highly developed currency markets with the quotes which are independently determined by market participants. Besides, many currencies not included into USDX, are traded in close correlation with the currencies included in USDX. USDX value is calculated 24-hours a day, seven days a week.

Currencies and weights used in USDX calculation match the currencies and weights used in calculation of trade weighted US Dollar index by US Fed.

As USDX is based on indicative values of quotes, it can vary depending on quote source used.

USDX is calculated as geometric progression weighted average of six currencies rates against US Dollar in comparison with March, 1973. USDX measures the US Dollar value reduced to 100.00. Quote value 105.50 means that US Dollar value in relation to currency basket grew 5.50% from March, 1973.

March, 1973 was chosen as a zero point due to its significance in Forex market history. Those times the leading trade nations allowed their currencies to be quoted freely against each other. Such agreement was made in Smithsonian Institution in Washington, and is considered to be a victory of free market theorists. Smithsonian agreement replaced the collapsed fixed rate regime launched approximately 25 years earlier in Bretton Woods, New Hampshire.

Current rate of USDX reflects the average dollar value against this base period of 1973. Since that time, Dollar Index has reached the peak 165 and the low 76. The volatility of such instrument by amplitude and variability can be compared with stock index futures.

 

[Dentalfloss]

c\urrency weightings for the dollar inde

 

[Dentalfloss]

$dxy abo
above 82.50 is resistance
3 day candles

 

[wallstreet1928]

c\urrency weightings for the dollar inde

interesting, very interesting information Dentist!!

 

[Dentalfloss]

overnight / asia
All Ordinaries (Australia) 3,969.00 5 Jun 36.50 (+0.93%) Chart, more...
^BSESN BSE 30 (India) 14,990.76 6:37am -112.79 (-0.75%) Chart, more...
^HSI Hang Seng (Hong Kong) 18,544.26 6:32am -135.27 (-0.72%) Chart, more...
^JKSE Jakarta Composite (Indonesia) 2,094.90 6:00am 15.97 (+0.77%) Chart, more...
^KLSE KLSE Composite (Malaysia) 1,075.50 5 Jun 11.53 (+1.08%) Chart, more...
^NZ50 NZSE 50 (New Zealand) 2,816.62 6:00am -17.89 (-0.63%) Chart, more...
^N225 Nikkei 225 (Japan) 9,865.58 6:28am 97.57 (+1.00%) Chart, more...
^NSEI S&P CNX NIFTY (India) 4,546.30 6:47am -40.60 (-0.89%) Chart, more...
^KS11 Seoul Composite (South Korea) 1,390.45 6:28am -4.26 (-0.31%) Chart, more...
000001.SS Shanghai Composite (China) 2,777.93 6:32am 24.04 (+0.87%) Chart, more...
^STI Strait Times (Singapore) 2,362.17 6:33am -34.18 (-1.43%) Chart, more...

 

[wallstreet1928]

I am short FTSE 4418 ...stop loss 4438

target 4390

 

[SuddenDeath]

good morning wallstreet1928, good morning everyone

The Coppock buy signal has been reliable, has anyone miniaturized it for use on short time frames ?

 

[lapalabra]

I am short FTSE 4418 ...stop loss 4438

target 4390

Morning all.

What's your analysis on this trade, WS?

 

[lapalabra]

good morning wallstreet1928, good morning everyone

The Coppock buy signal has been reliable, has anyone miniaturized it for use on short time frames ?

Coppock, the founder of Trendex Research in San Antonio, Texas, was an economist. He had been asked by the Episcopal Church to identify buying opportunities for long-term investors. He thought market downturns were like bereavements and required a period of mourning. He asked the church bishops how long that normally took for people, their answer was 11 to 14 months and so he used those periods in his calculation. - Wikipedia

That has to be one of the most interesting backgrounds to an indicator I've heard!