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Looks like Chuck LeBeau's site will start up again....

I happen to grow corn, have pigs and hens and even own GE stock. All these things create wealth but the futures and options contracts that I use to hedge myself are all zero sum instruments. I'm not a farmer btw. Just trying to post a point :p

good post

This is not entirely the same situation I was referring to in my post, though your point is valid. When considering the economy as a whole and including profits generated by businesses that later translate into dividends we are talking about an entirely different animal. I am not smart...

Some people on this thread are confusing two entirely different terms: Market Efficiency and Zero Sum Game. The futures markets are by definition a Zero Sum Game and this has NOTHING to do with the efficiency of the markets. If this were not true, we would have our own perpetual money making...

How much of their success is marketing I wonder? How many traders and funds go unnoticed simply because they are quiet and enjoy their privacy?

Everyone, thanks for your comments. As I posted before, I talk things out as I try to understand them - especially early on as those who posted were trying to get their head around this thing. Riskarb has made some insightful comments and I think that he and perhaps many of you are years...

whitster, Would you mind sharing more on this? My thought is that there must be more opportunities in stocks (there being > 5,000 of them) than in futures (there being << 5,000 of them). With so many people following the same contract there must be fewer opportunities. Only issues with...

Riskarb, What's your understanding? You seem like an option specialist and I'd like to understand this better.

After further consideration, you are right. Since the options that make up the index change as the price of the S&P changes. The idea is consistent however.

Options on the VIX are really options on options, a.k.a 'Compound Options'. This is really cool because up to now, compound options have only been traded over the counter (OTC) and not on any exchange that I know of. My assumption is that the VIX options will be priced similiar to other...

Another thought: The VIX futures price does not reflect the "expected future" spot price of the VIX alone. Rather, just like any other futures contract, it reflects the expected future price PLUS the cost of carry. Therefore: VIX Futures = VIX Spot + Cost of Carry I do not see a cost...

This actually has me on the sidelines for the moment. What will the VIX options reflect? - The forward or the spot? Again, from the CBOE website: ************************************************************** CBOE VOLATILITY INDEX® (VIX®) OPTIONS Underlying: The CBOE Volatility Index...

Whitster, I don't take it that way at all. It is good to know who is speaking from success or just from wishful thinking. And assuming you are speaking the truth, then it enables others to gauge your thoughts from this perspective. Best, Granville

Yes, they certainly - which has me dusting off old textbooks looking up option pricing formulas. Enjoy the rest of your weekend, Granville

Given that when one person buys a futures contract, someone must sell it to them. (One side makes delivery of the underlying at expiration, one takes delivery at expiration). At expiration, one of them will have made $X amount and the other will have lost $X amount. The total sum is zero...

Another random thought.... Whereas forward contracts are often arb'ed, options are not (they are rather 'priced'). Therefore we could see the options moving just like any other option. Now I'm diluting my content rich posts with random thoughts :D

Nkhoi, Could you explain the "least square" moving average in your chart?

Thanks KTM on your explanation of SPAN. You comments above make me question why futures contracts follow the underlying so often. An obvious reason would be because they reflect the market's sum view of the forward price at expiration, which happens to be the current spot price. Therefore...