US SEC clears last hurdle for single-stock futures

[brad1970]

(RT)US SEC clears last hurdle for single-stock futures
Story 6468 (I/US, I/WASH, I/USC, I/REGS, I/FIN, I/STX, H/)
WASHINGTON, July 24 (Reuters) - The Securities and Exchange
Commission on Wednesday approved customer margin rules
governing single-stock futures, sweeping aside the last
obstacle to the long-delayed start of trade in the products.
The new rules, which set minimum margin levels at 20
percent of "current market value", were approved earlier this
month by the SEC's regulatory partner for the new market, the
Commodity Futures Trading Commission.
The two agencies consulted closely for more than a year to
hammer out a consensus on the margin rules and other details,
which will take effect 30 days after publication.
Congress had authorized a resumption of trade in
single-stock futures to begin in August of last year after a
two-decade hiatus, but the lack of a regulatory framework had
hampered the market's revival until now.
((Washington newsroom +202 898 8312, fax +202 898 8383,
christina.ling@reuters.com))
REUTERS
Rtr 14:56 07-24-02

 

[Speculator1929]

Another way to fragment the market. mistake. No reason other than avoidance of short sale for these things.

 

[daniel_m]

Originally posted by Speculator1929
Another way to fragment the market. mistake. No reason other than avoidance of short sale for these things.

That's a very limited perspective. But even if that's the only thing SSFs bring it is FANTASTIC. Screw that damn short sale rule!

 

[PuffyGums]

Futures are a pure trading vehicle. Stocks are for those who actually want the dividend flow and participate in the growth of company. Makes sense to separate the two.

 

[bungrider]

Originally posted by PuffyGums
Futures are a pure trading vehicle. Stocks are for those who actually want the dividend flow and participate in the growth of company. Makes sense to separate the two.

separating two things that are essentially the same makes no sense.

IMO, another casino just opened up on wall street...

 

[LouiseJefferson]

Originally posted by Speculator1929
Another way to fragment the market. mistake. No reason other than avoidance of short sale for these things.

Fragment the market? Mistake? Mistake for who? Please don't take this as a personal attack, but you are obviously quite uninformed on this subject. The approval of SSF will be beneficial to EVERYONE except equity and equity option market makers.

Individual Investors - will benefit as the competion will reduce spreads significantly

Professional Traders and Pro firms- Arbitrage opportunities galore!!!

Hedgers- cheaper alternatives for hegding individual stocks

 

[Speculator1929]

Puffy,
That is what they tried to do with "Primes" and "scores" Seperate the two components. Didn't go over well. This is just another way for some struglling exchanges to try to make a buck. And for firms to get more comissions from traders who are even more leveraged than before

 

[Speculator1929]

What is the economic justification for these SSF's? The individual investor has no need for these things.

 

[LouiseJefferson]

Originally posted by Speculator1929
What is the economic justification for these SSF's? The individual investor has no need for these things.

First of all, fortunately, we don't live in a communist society where every product introduced needs to have an ecomomic justification for the good of the people. What is the economic justifiaction of a casino, or a video game?

But with regards to the individual investor....they most certainly will benefit. Why do you think the NYSE & NASDAQ lobbied relentlessly to oppose these. Why do you think that the senators that introduced the bills to ban were from NY? Simple, because it increases competition and reduces the spreads but also the ability for a small group to control and manipulate the equity markets.

What do you think happened after the CBOE lost the battle to fight dual listing of options?

What do you think happened after the pit traders in Chicago lost their battle to prevent the listing of the E-Mini contract? It facilitated YOU, JOE BLOW, sitting at home in his boxers to compete rather sucessfully for trades with people like PRS and Borselinno.

 

[daniel_m]

Originally posted by Speculator1929
And for firms to get more comissions from traders who are even more leveraged than before

Well, firstly, no one is gonna force you to trade them. Secondly, margin requirements are 20%, so in fact it's a lot less leveraged for prop traders.