Posts Tagged: futures contract


Hedge funds might have overdone it on the oil.

After amassing their largest ever position in North Sea Brent back in May, with investors chasing a rebound in oil prices, hedge funds have spent the past seven weeks slowly chipping away at that record-breaking bet

Data from the Intercontinental Exchange (ICE) on Monday showed the funds’ so-called net long futures and options position in Brent – the difference between bets on rising and falling prices – had fallen 33 per cent in seven weeks to 191,804 contracts.

While that’s still the paper equivalent of almost 192m barrels of the international benchmark it is well below the record 289m they had amassed in the week to May 5.

Notably Brent hit its high for the year on May 6 of $69.63 a barrel before running out of steam, with traders eyeing the possibility of US shale producers maintaining production as prices came back.

Brent has since fallen below $62, with the latest bout of selling pressure coming from the Greek crisis on Monday.

Chart-watchers said Brent is now in danger of breaking the uptrend in place since it bottomed near $45 a barrel in January. The funds have got a lot of oil still to sell if prices don’t stabilise soon.


While there are still at least 4 hours until Sunday’s first EUR price indications, which as we reported yesterday will likely switch “close only” mode for most FX brokers who still recall the horror of the SNB bait and switch, and just under 8 hours until the official open of US equity futures, one place to find out what investors are betting, literally, will be market levels at the open are UK spread bettors such as IG.

As the following screenshot shows, China’s rate cut to halt its own market collapse may be promptly drowned out by the market’s realization that contrary to clueless pundit ramblings, Greece was not “priced in.”

There are markets open in The Middle East and Saudi Arabia and Dubai stocks are down 2-3% for now…

7 Reasons Why Traders Lose Money ?

22 June 2015 - 16:23 pm
  1. Blaming outside forces for poor trading results is an incredibly destructive behavior. High frequency traders, market makers, and irrational markets, give an undisciplined trader license to make reckless trades. The less responsibility taken for results, the more destructive they can be with an account.
  2. Trading with no plan and making decisions based on feelings, is a really bad idea. Letting opinions and predictions be a guide to entries, and emotions be a guide to exits, guarantees maximum destruction of trading capital.
  3. Trade first and learn how to trade later. Traders who don’t spend time educating themselves before trading will learn the hard way, and give their trading capital to other traders as tuition.
  4. Focusing on ego and the desire to be right, instead of profitability and big losses, will quickly destroy a trader’s account.
  5. Traders that fight the trend and disagree with the actual price action will give their trading capital to those that follow the trend.
  6. Trade without discipline and risk management and a trader will be destroyed regardless of their trading system or method.
  7. If a trader doesn’t diversify their life with strong relationships, fun, peace, and health, their trading results become too entangled with their self worth. This can lead to mental and emotional ruin.

Weaknesses and Strengths of Traders

22 June 2015 - 16:08 pm


Makes and follows long term business plan


Will ignore long term business plan


Will handle times of market volatility and make smart decisions


Will panic when markets are volatile and make stupid decisions >> Read More


1. Significant position changes were limited to the euro and yen in the CFTC reporting week ending June 16. Of the remaining 10 gross positions we track only one was above 5k contracts (gross short Australian dollar position was cut by 9.8k to 69.5k). There was only one other gross currency adjustment of more than 4k contracts, and that was the gross long Swiss franc position, which was trimmed by a third (4.7k contracts) leaving 8.9k contracts.

2. The gross long euro position jumped by 30.1k contracts to 82.7k. This was the largest accumulation in a year, which itself was the biggest since January 2011. The gross short position was trimmed by 10% (18.5k contracts) to 172.1k. The euro bottomed in mid-March, but until this past week, the gross long position was flat to lower. In fact, it made a new low for the year in late-May. Up until now, the adjustment has been confined to covering shorts. During this most recent reporting period, the euro averaged about $1.1275. This is the middle of the $1.10-$1.15 range. These new longs may be in weak hands; vulnerable to a near-term setback.

3. The gross long yen position increased by roughly the same percentage as the gross long euros. It rose by 22.3k contracts to 64.8, but such large swings in positioning are more common in the yen futures. The gross short position, which has grown rapidly in recent weeks, was trimmed by 13.3k contracts to 145.4k. The dollar averaged about JPY123.25 during the reporting period.

4. The net short US 10-year Treasury futures position swell to 96.4k contracts from 36.6k. The longs cut 29.1k contracts, leaving 383.3k. The gross shorts grew 30.8k contracts to 479.8k. The US 10-year yield peaked on June 11. The yield has shed 25 bp since and it finished last week with the lowest yield since June 1.

5. The speculative positioning in the crude oil futures was essentially unchanged. The net long position increased by 1.3k contracts to 327.1k. The longs rose by 1.1k contracts to 484.9, while the shorts were reduced by 100 contracts to 157.8k.

June 16 Commitment of Traders
(speculative position in 000′s of contracts)
Net Prior Gross Long Change Gross Short Change
Euro -89.4 -138.0 82.7 30.1 172.1 -18.5
Yen -80.7 -116.0 64.8 22.3 145.4 -13.3
Sterling -25.4 -28.3 33.9 2.9 59.3 0.0
Swiss Franc 5.4 10.1 8.9 -4.7 3.5 0.1
C$ -12.3 -13.7 22.5 1.5 34.8 0.0
A$ -4.0 -14.0 65.4 0.2 69.5 -9.8
Mexican Peso -52.5 -51.1 28.2 -0.4 80.7 1.0
(CFTC, Bloomberg)

Links For Traders

20 June 2015 - 18:31 pm


Interesting reads:

>> Read More

10 Keys For Traders

20 June 2015 - 17:22 pm
  1. First Things First
    You sure you really want to trade ? It is common for people who think they want to trade to discover that they really don’t.
  2. Examine Your Motives
    Why do you really want to trade ? Did you say excitement ? Then don’t waste your money in market, you might be better off riding a roller coaster or taking up hand gliding.
    The market is a stern master. You need to do almost everything right to win. If parts of you are pulling in opposite directions, the game is lost before you start.
  3. Match The Trading Method To Your Personality
    It is critical to choose a method that is consistent with your your own personality and conflict level.
  4. It Is Absolutely Necessary To Have An Edge
    You cant win without an edge, even with the world’s greatest discipline and money management skills. If you don’t have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don’t know what your edge is, you don’t have one.
  5. Derive A Method
    To have an edge, you must have a method. The type of method is not important, but having one is critical-and, of course, the method must have an edge.
  6. Developing A Method Is Hard Work
    Shortcuts rarely lead to trading success. Developing your own approach requires research, observation, and thought. Expect the process to take lots of time and hard work. Expect many dead ends and multiple failures before you find a successful trading approach that is right for you. Remember that you are playing against tens of thousands of professionals. Why should you be any better ? If it were that easy, there would be a lot more millionaire traders.
  7. Skill Versus Hard Work
    The general rule is that exceptional performance requires both natural talent and hard work to realize its potential. If the innate skill is lacking, hard work may provide proficiency, but not excellence.
    Virtually anyone can become a net profitable trader, but only a few have the inborn talent to become supertraders ! For this reason, it may be possible to teach trading success, but only upto a point. Be realistic in your goals.
  8. Good Trading Should Be Effortless
    Hard work refers to the preparatory process – the research and observation necessary to become a good trader – not to the trading itself.
    “In trading, just as in archery, whenever there is effort, force, straining, struggling, or trying, it’s wrong. You’re out of sync; you’re out of harmony with the market. The perfect trade is one that requires no effort.”
  9. Money Management and Risk Control
    Money management is even more important than the trading method. 

    The Trading Plan

    • Never risk more than 5% of your capital on any trade.
    • Predetermine your exit point before you get in a trade.
    • If you lose a certain predetermined amount of your starting capital (say 10 to 20%), take a breather, analyze what went wrong, and wait till you feel confident and have a high-probability idea before you begin trading again.
  10. Trying to win in the markets without a trading plan is like trying to build a house without blue prints – costly (and avoidable) mistakes are virtually inevitable. A trading plan simply requires a personal trading method with specific money management and trade entry rules.

Who is he trying to kid?

  • All those betting against a crisis will be proved wrong
  • There will be a solution based on respecting rules

More upbeat comments from Greece’s leader

Things are not so upbeat in the press and that should stand as a warning. London traders are walking into headlines like this, which might turn sentiment and add risk into the weekend

Keep an eye on the headlines which could affect the market into the weekend

EURUSD is already looking a little soft as traders start getting to their desks. We’re trading down to the overnight lows at 1.1341


West Texas Intermediate crude, once derided as a broken oil benchmark, is enjoying a comeback.

Volumes of futures tracking the yardstick have averaged 1m contracts a day this year through May, up more than 45 per cent from the same period of 2014, exchange data show. WTI has also sped ahead of volumes in rival Brent crude, less than two years after Brent unseated WTI as the most heavily traded oil futures market.

The resurgence of WTI trading follows a 44 per cent plunge in oil prices from a year ago. Big price swings invigorated trading in both Brent and WTI, but the latter has attracted more.

WTI has also regained a more stable connection with global oil prices after suffering glaring discounts because of transport constraints at its delivery point of Cushing, Oklahoma. The gap led some to question WTI as a useful gauge of oil prices.

“I guess the death of the WTI contract was greatly exaggerated,” said Andy Lipow of consultancy Lipow Oil Associates.

>> Read More

1.  There were two significant (10k contracts) position adjustments.  The gross short euro position was cut by 24.4k contracts to 190.6.  It is the biggest short-covering since March 2014.  Recall that the gross short euro position peaked in March at 271k contracts.  This reduction in the gross short position accounts fro the bulk of the adjustment of the new position.  The speculative net short euro position has fallen from by about 90k contracts since peaking in early April.  The other significant position adjustment was speculators continued to amass a large short yen position.  In the reporting period ending June 9, speculators grew their gross short yen position by 26.4k contracts to 158.7k. Since the end of April, when the gross short yen position had fallen to 54k contracts, it has grown nearly three-fold.    The net short position stands at 116k contracts. In late-April speculators were short 5.5k yen contracts.
2.  Speculators generally added to short currency futures positions.  The euro was an exception.  So was the Swiss franc.  The gross short position was trimmed by 800 contracts.  Speculators have been net long francs since early April.
3.  The speculative net short 10-year Treasury note futures was halved to 36.6k contracts. Gross longs rose by 71.6k contracts to 412.4k.  While they may have been trying to pick a bottom, the bears grew went with the momentum, and expanded gross short positions by 34.6k contracts to 449k.
4.  The speculative net long oil futures position was pared by 13.7k contracts to 325.8k. This was a function of gross longs being trimmed by 10.7k contracts (to 483.8k) and a small increase (3k) of gross short positions (to 157.9k contracts).

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Technically Yours,
Team ASR,
Baroda, India.