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Each settlement price you see along the forward curve is the consensus market valuation of the duration differential "dirty price" between prompt contract and the forward expiry of concern.

If you look at the open interest in forward curve, you'll get a better sense of how the market uses various duration expiries. Since most loans are quoted in Libor plus basis points, the forward hedging component is huge...

Be prepared for a rabbit hole of epic proportions if you want to really delve into this further.

Well, the Eurodollar contract essentially replicates a zero coupon synthetic loan instrument. The convexity is different from other short term bills because the interest payout is different. And we won't even bother with the lawsuit and scandal re: banks making up the LIBOR rates they report...

Here is an article from the August 10th edition of Bloomberg Business. While the particular piece focuses on Glencore, I would imagine that any commercial whose business model requires holding physical inventory would have similar difficulties...

I've responded to a few threads about fear of loss. There's no sense in suppressing or ignoring the emotion. No matter what trading system you are using, you are going to have to let it "perform" in the market trading range and that of course means a drawdown. Hopefully, you've defined your...

I agree with Wartrace. Honor your fear of loss, trying to suppress and not recognize your fear makes no sense. Trade the smallest size possible with this "Supertrader" strategy and allow the strategy to perform ( that means drawdowns ). Once you get some consistency and confidence and prove...

Keep a personal trading journal if you truly believe in your existing trading system but can't seem to take it to the next level. You don't need to hire a mentor if in your heart of hearts you believe that it's the five inches between your ears that's keeping you from making a well back tested...

Waiting for a hit piece from the Times on Rodger Clinton, Jr's latest shenanigans and Hugh and Tony Rodham here. ( crickets chirping sound ) And for the record, Jim Brownback's neighbors need to file a civil lawsuit against their prick asshole neighbor if law enforcement won't oblige. Where...

If true about Walker and his proposal for a bond issue, it's good to see the Wisconsin state Republican caucus hold him to account and push back.

The trouble for Greece is that the whole socialistic "workers of the world unite" thing and complete wealth redistribution no longer exists. Russia isn't going to be able to lend anything of consequence other than assassins and prostitutes for well known and published reasons. No...

That just sucks, IB. Get with the program.

Hey, redneck forest people are quite patriotic and fiscally conservative at least here in the U.S. And I'm quite sure that China and Russia are held on low esteem by redneck country folk. Safe assumption.

The longer we trade in this price range in terms of historical time frame, the more universally accepted the valuation will be for long term market participants like producers and commercial users.

If Germany left the EU, France and the UK would be 2 seconds behind them. And then the PIGS could continue to run any deficit they choose, default on the balance of all outstanding sovereign debt obligations, and history tells us how that story ends. The PIGS might be able to borrow money...

It seems like big oil producing companies are resigned to the notion that oil prices are going to trade in the current range for an extended period of time. They are laying off workers, slashing expenses, and warning investors...

It seems like big oil producing companies are resigned to the notion that oil prices are going to trade in the current range for an extended period of time. They are laying off workers, slashing expenses, and warning investors...

IMHO, options on futures spreads make the most sense for the most volatile of combinations. You'd be better served just doing the futures spreads for many ( but certainly not all ) futures spread combinations since they are typically very cheap to margin, and slippage on the options should be...

Well, there are some very advanced automated spreading platforms out there ( RTS, etc. ). Granted, they are predominantly used by speculators and proprietary firms, but every FCM customer desk that I know of in Chicago has a TT Pro license which includes AutoSpreader. I simply can't buy into...

Point duly noted. What's more, the CME's Ag Product Manager should hang for this. And again, I would be thrilled about hybrid spreads in the exchange supported format. I guess that I am really leery of the statement "There's a South American soy processor who wants to put on 1,500 crush...