Showing posts with label Goldman Sachs. Show all posts
Showing posts with label Goldman Sachs. Show all posts

Friday, September 13, 2013

September 13, 2013 HFT Stocks & Options Commentary with @pnavarro88

September 13, 2013 HFT Stocks & Options Commentary with @pnavarro88 SocialTwist Tell-a-Friend

Market continues to go higher!

Monday, August 5, 2013

August 5, 2013 HFT Stocks & Options Commentary with @pnavarro88

August 5, 2013 HFT Stocks & Options Commentary with @pnavarro88 SocialTwist Tell-a-Friend

Tuesday, July 16, 2013

July 16, 2013 HFT Stocks & Options Commentary with @pnavarro88

July 16, 2013 HFT Stocks & Options Commentary with @pnavarro88 SocialTwist Tell-a-Friend
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Thursday, September 30, 2010

High Frequency Trading in Options Explained | Trade Options Like a DPM Webinars #4

High Frequency Trading in Options Explained | Trade Options Like a DPM Webinars #4SocialTwist Tell-a-Friend
As former CBOE Designated Primary Market Maker (DPM), The Admiral, explains what High Frequency Trading (HFT) is. Specifically, the admiral explains what the purpose of high frequency trading and how big firms like Goldman Sachs, JP Morgan, and Morgan Stanley take advantage of technology placed near the exchanges

This an excerpt from the "Trade Options like a DPM Webinar #4: Synthetics & Equalities -


A financial instrument that is created artificially by simulating another instrument with the combined features of a collection of other assets. 


The featured speaker, whom we affectionately call "The Admiral," was a Designated Primary Market Maker (DPM) on the floor of the CBOE for five years. Although we're not using his real name (so don't ask!) suffice it to say that we consider him to be one of the most knowledgeable option traders on the planet. As a floor trader in the '80s and '90s he did the opening options rotation for 5-25 stocks the old-fashioned open outcry way—meaning he opened each option strike price for each of these stocks within the first 30 minutes of trading, both calls and puts.

That meant he had to price more than 500 option strikes, plus as a market maker he traded and kept the markets current. As a DPM, technology brought forth auto-quoting of option series, but pricing of those quotes remained his responsibility. Trading 1 million shares of stocks and 50,000 options contracts was a normal day for him. In 27 years at CBOE, he has traded through the crash of '87, the smaller crash of '90 and the tech bubble in 2000. He has traded three-digit volatility and seen every possible market environment imaginable. So, if you're going to learn options, it might as well be from the very best.

Monday, August 13, 2007

Water (H2O)

Water (H2O)SocialTwist Tell-a-Friend
Sally Limantour

There is a wacky Broadway play called UrineTown that deals with the concept of water – or the lack of. The premise is as original as it is unpleasant – in a city suffering from unending drought, private bathrooms are outlawed. Everyone must pay crippling fees to use public latrines run by a monopolistic corporation. Those who cannot pay get dragged off to "Urinetown," a mysterious place from which they never return. Finally, one latrine manager leads the people in rebellion. The catch is that the ingĂ©nue he loves is the daughter of the corporation's greedy president.
Watching this play a few years ago had me think how crazy the world will get as water becomes a scarce commodity. In many parts of the world this is already a problem and as populations grow and industrialized economies develop water becomes more precious everyday.

Water Stress and Water Scarcity

In the water industry the terms, “water stress” and “water scarcity” are often used. These terms have to do with a country’s annual supply of renewable fresh water. A severe form is when a country’s annual supply of renewable fresh water falls to less than 1,000 cubic metres per person. Such countries can expect to experience chronic and widespread shortages of water that hinder their development. Many countries fall in this category and do not have the technology to access clean water.

Water Shortages

One of the best books written on the topic of water is called, When The Rivers Run Dry, by Fred Pearce. He drives home the point that we do not realize how much water we actually use on a daily basis. Between drinking, washing and flushing we use approximately 40 gallons a day. In some areas where sprinklers and swimming pools and others uses are higher it can be double. When we add in water usage that is needed for what we drink and eat the numbers are astounding. It now takes 11,000 litres to grow the feed for enough cows for a quarter-pound hamburger, and 25 bathtubs of water to produce a single T-shirt. As a result, at the World Water Week in Stockholm, the International Water Management Institute claimed that a quarter of the world’s population now lives in areas of ‘physical water shortage’.

In a report from the Global Water Partnership of Stockholm, Sweden, it was stated that $4.5 trillion is needed to be invested between 2000 and 2025 to improve the global infrastructure.
The reality is that more than one third of the world’s population lives in countries where consumption of drinking water exceeds available supplies. In China alone it is estimated that their water supplies can support 650 million people which is only half of its 1.2 billion population. China has 617 cities of which 300 have serious water shortages.

The Middle East imports 91% of its fresh water needs from other countries as Jordan, Israel and Saudi Arabia all suffer from water shortages and in Africa it is estimated that 2/3 of the population who live in rural areas lack an adequate water supply.

Here in the U.S. the 1,400 mile long Colorado River is at record low levels and a decade long drought is threatening drinking water supplies for major cities and irrigation for food production in the western part of the U.S.


In addition to shortages pollution is a major problem in much of the developing world. In China you have a double whammy – both water scarcity and pollution. Not only are they threatening human health and development, but water problems also jeopardize China's economic plans. The impact of water pollution on human health and water shortages together has been valued at approximately U.S. $15.1 billion by Chinese sources.

The lack of resources and advanced technology are partially responsible for the slow progress in solving these problems.

Half of China's population (nearly 700 million people) consumes drinking water contaminated with animal and human waste that exceeds the applicable maximum permissible levels. Liver and stomach cancers in China are caused in part by water pollution. China has the highest liver and stomach cancer death rates in the world. Liver and stomach cancers are 3-7 times higher in polluted rural areas of China.

Increased Funding for Water Infrastructure

As water becomes more of a problem world wide you will see governments and the private sector increasing funds to fix the aging infrastructure as well as to develop technologies to clean and reuse water. As it stands now the global water market is estimated to be $365 billion while the U.S. market is $87 billion.

The investment demand for companies involved in water management and conservation will grow as the industry matures. The Environmental Protection Agency estimated that $140 billion will be needed in the next ten years just to meet the requirements of the Safe Drinking Water Act. Many in the industry feel this number is grossly underestimated.

The hot spots for growth in the water sector is in the replacement of aging water infrastructure in developed markets and the installation of basic water infrastructure in emerging markets. While the number of pure water plays has been reduced we are seeing large companies, like GE gobble up some of the water companies. GE has purchased Betz Dearborn a water treatment business and Zenon which makes advanced membranes for water purification, wastewater treatment and water reuse. The company pioneered the use of technology for water and wastewater treatment that is spreading rapidly throughout the world. GE is also building one of the largest desalinization plants in Algeria. The Danaher Corporation recently agreed to buy Centrist, a water treatment products and services provider and I foresee some of the large sovereign wealth funds (SWF) buying up water related companies in their need to provide their countries with clean water. As water becomes more scarce, tensions are likely to arise among different users within countries and also across borders. Companies operating in water-stressed regions will have to be aware that they are competing for an essential resource and will have to manage any potential flare ups.

So how can private investors tap into these markets? There are a number of ways and one play is to purchase the US Power Shares Water Resources or individual concentrated water funds, such as Aqua Terra Asset Fund, a relatively new water fund run by an environmental engineer. One can also go to the International Securities Exchange (ISE) where a water index is the basis for cash-settled index options (symbol, HHO), ETFs (symbol: FIW), and ETF options. Cash-settled futures on the index are coming soon.

There are also individual companies such as Aqua America or Calgon Carbon. Hyflux traded in Singapore is an interesting water company and recently bought into a business in Saudi Arabia which in addition to producing oil for export is also one of the world’s largest consumers of less expensive “used” oil. This is oil that has been collected from shipyards, power plants and other related industries. Hyflux owns a method that recycles the oil and they expect this aspect of their business to grow and equal their water technologies in terms of income.

The following are stocks and funds in the water sector that look attractive: American States Water (AWR), Aqua Terra Asset Fund (KWIAX), Aqua Water (WTR), Badger Meter (BMI), Calgon Carbon (CC), Clarcor Corporation (CLC), Hyflux (HYFXF), Insituform (INSU), Nalco (NLC), Pentair (PNR), Sinomem (SMMKF), Tetratech (TTEK), US PowerShares Water Resources (PHO) and Watts Water (WTS).

Tuesday, June 19, 2007

HOTS Weekly Options Commentary

HOTS Weekly Options CommentarySocialTwist Tell-a-Friend
Peter Stolcers

In the last two weeks we've seen a 50 point decline and a 40 point rally in the S&P 500 futures. Earnings season has passed and the market is looking for something it can sink its teeth into. It took seven years for the market to make a new all-time high. Despite a stiff resistance level, it was able to fight-off the first speed bump – a 15% decline in the Shanghai Index. That dark cloud may have passed as traders believe that the selling can be contained to China. However, interest rates were a different story and the market cracked.

Global economic growth is putting upward pressure on interest rates. Last week England raised its rates a quarter-point and this week Switzerland followed suit. That puts upward pressure on our interest rates and the 10-year yield went above 5%. Asset allocation models kicked in and the market went through a discovery phase. Selling pressure tested the “bid” to the market and it determined the appetite for equities amidst rising interest rates. The bulls won this round and the selling never really took hold.

Higher interest rates that result from a strong economy don't conflict with a bullish market. The latest rise in interest rates resulted in and a positively sloped yield curve and that is considered bullish. Wednesday, the Fed released its Beige Book. It is published every six weeks and it is a collection of economic activity from various regions in the US. It showed rising economic activity and moderate inflation. Once the numbers were released, the market rallied more than 15 S&P 500 points. The surge was created by buying, short covering, and expiration related buy programs. Thursday the market followed through on a benign PPI number. I'm writing this report a day earlier than normal so I will take a stab at Friday's action. I believe that the CPI will be in line with expectations. It might even be a little "hot". The market will look past the number and post modest gains. Most of the expiration related fireworks have passed and the afternoon could get quiet. “Merger Monday's” have been bear slayers and the shorts will not get aggressive going into the weekend.

This week the economic numbers are very light. They will be highlighted by housing numbers, leading economic indicators and the Philly Fed. Housing starts and building permits might shed light on that sector. From my perspective the numbers can only be bullish. So much gloom and doom has been factored in to housing that I doubt a bad number will weigh on the market.

Last week LEH and GS posted solid earnings but they failed to light a fire under financial stocks. I believe this sector is a sleeping giant and it may be the source of the next rally. Here are the major companies that will announce earnings next week; BBY, DRI, KMX, FDX, GIS, CC. The electronics, auto and restaurant stocks might shed light on the strength of consumers. However, I'm more interested in FDX and GIS. FedEx’s activity will be used to measure economic growth and General Mills will provide insights on food inflation.

Solid earnings, steady interest rates at the low end of the 50-year range, global expansion, moderate inflation, full employment and reasonable P/E ratios all point to a stable market. I am firmly in the “buy the dip” camp as long as the market is above SPY 146.

Wednesday, February 7, 2007

Fed, Bonds and Gold

Fed, Bonds and GoldSocialTwist Tell-a-Friend
Sally Limantour
February 7, 2007

Treasury Bonds:

“Fed Ease Unlikely Until 2008,” said Richard Berner, from Morgan Stanley. So now we have gone from an expected easing in early 2007, to easing late in the year to a possible easing in 2008. The reason: “We think future inflation risks are slightly higher than a month ago.”

The Fed speakers were out in force yesterday with San Francisco Fed President Janet Yellen saying “inflation is a little higher than I would like it to be; I would like inflation to come down.” The bond market had a short covering rally and stops above the 110 15/32 area were triggered. Strong demand for the 3 year and the “slowing” rate of growth predictions by a number of Wall Street economists contributed to this. Certainly $60 oil is also on everyone’s radar.

Bottom-line: Resistance above the 111-00 will keep the bears in control.


The media is focused on the gold rally inspired by the energy price inflation theme. I am more interested in the fact that gold sales by legacy central banks of Europe are low. In order to meet the Washington Agreement’s annual gold sales total they need to sell 9.6 tonnes each and every week. We are now in the 7th consecutive week that the legacy central banks have sold less than 3 tonnes of gold. This is bullish and an important item to monitor.

In other news:

Goldman sells top commodities index. GS has agreed to sell its GSCI commodity index to Standard & Poor’s for an undisclosed amount, according to the FT today. Note this: “the move will give the S&P a potentially powerful influence on commodity markets as any changes to the index composition can have wide ramifications for underlying commodity prices. The GSCI, the world’s leading commodity index, has about $60 bn tracking it. Most of these funds are managed by GS, which is the largest commodities trader among investment banks.”

Regarding the grain and soybean market there is much talk of expected planting and how much will be shifted to corn, given the high prices. While bullish on this sector, I have stepped to the sidelines as I am seeing a dis-connect between the futures and the cash market.

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