Free Republic

Tiny gap between private trade confirmations and public data feed can be exploited to detect market moves, critics say Five years ago, the world’s largest exchange operator vowed to fix a flaw in its systems that allowed high-speed traders to infer the direction of the futures market a fraction of a second before everyone else. Now, the defect is back at CME Group Inc.,traders say. And some allege it is yielding rich profits for ultrafast firms at the expense of ordinary investors. The problem arises from the two ways that CME distributes information about a trade. One is the private...

U.S. S&P 500 futures，the world's most liquid, tumbled as much as 2.5 percent to 4-month lows in Asian trade on Tuesday as the sell-off triggered by worries about inflation showed no sign of abating, indicating Wall Street could be set for another brutal day. Futures fell to as low as 2,542, the weakest levels since early October, and 11.7 percent below their record peak of 2,878.5 touched on Jan. 29. S&P futures were last down 1.6 percent while Dow futures were last down 2.2 percent. The slide added to sharp falls over the past week. The S&P 500 index and...

If you get reamed don't say you weren't warned. In 2008 there were repeated instances where the futures gapped ~20 handles overnight, clearing out the stack and gapping over your stop, filling you on the other side for hideous losses. Stop orders are worthless when this happens -- all they do is lock in a loss as you fill on the other side (which usually is the extreme print) and then the market reverses some of the move, costing you twice.

TOKYO (Reuters) - Asian shares touched their highest level in a year on Tuesday, while gold futures hit $1,000 an ounce for the first time in six months on investor concerns about the sustainability of the global economic recovery. With no direction from U.S. markets due to Monday's Labor Day holiday, it was a mixed start for Asian markets, with Australian shares climbing as a flurry of deals lifted hopes for a pick-up in merger activity, while Shanghai stocks were dampened by profit-taking. The MSCI index of Asian shares excluding Japan rose to its highest in a year, gaining 0.8...

Politicians who try to make oil cheaper by restraining speculation will just make things worse ALTHOUGH the price of oil continues to hit new records, it has in one respect been a quiet week on the oil markets. America’s lawmakers are celebrating Independence Day by taking a few days off. That has led to a brief interruption in the torrent of proposals aimed at curbing speculation. Ten different bills on the subject are in the works in Congress. Before the House of Representatives shut up shop, it approved one by a vote of 402-19. America’s politicians are not the only...

The global financial system these days is beginning to look like a giant Whac-a-Mole game--when we think we've knocked down one speculative bubble, another one just like it pops up. The latest is the commodities bubble--everything from oil and natural gas to gold, copper, wheat and rice....Like the credit bubble, this speculative bubble in commodities has badly distorted the workings of key markets and sectors of the global economy....this bubble is creating vast new wealth for some, including brokers, traders and investment houses who have gorged on fees and trading profits. The difference this time, however, is that even before...

NAIROBI (Reuters) - Kenyan elders may impose a fine on U.S. presidential hopeful Hillary Clinton, payable in livestock, after a photo of her rival Barack Obama in robes dragged their people into the race for the White House. The picture, which appeared on a U.S. Web site, showed the Illinois senator in a white headdress and traditional Somali attire during a 2006 visit to Wajir in Kenya's remote northeast. Obama has battled a whispering campaign by fringe elements who wrongly say he is Muslim and his aides accused Clinton's campaign of "the most shameful, offensive fear-mongering" after the photograph was...

LONDON, -- The pit at the International Petroleum Exchange fell silent for good, as the noisy practice of traders in multicolored jackets shouting orders and using hand signals was banished in favor of a fully electronic system. The switch to screen trading of oil futures contracts, which brought an end Thursday to the 25-year tradition of open outcry trading, is part of the IPE's plan to improve efficiency and competitiveness. But the move has also prompted a renewed attack from the New York Mercantile Exchange. The world's biggest energy futures market has set up a rival exchange in Dublin...

Sites to pick up terrorism futures market NEW YORK--The Pentagon's roundly vilified plan for a terrorism "futures" market was axed last week before it saw the light of day, but some private online betting exchanges may soon pick up where the government left off. However weird it may seem, the Pentagon's hope was that such "futures" contracts would help it take advantage of the predictive ability of markets to help prevent future attacks and track key political developments. While the U.S. Congress jumped all over the quirkier plans for contracts on assassinations and terrorist attacks, the exchange also planned "futures"...

Open-Air Nuthouse I've said before that our poor country sometimes resembles an open-air insane asylum. Alas, here are two more pieces of evidence to support that assertion: 1. New York City has decided to fund a high school strictly for homosexuals. 2. The Pentagon planned to set up a "futures market" in which investors could speculate on such things as terrorist acts, assassinations and the overthrow of governments. As Jack Paar used to say, "I kid you not." Fortunately, enough people in Congress were outraged by this latest wacky idea from the Pentagon that the fearless bureaucrats have backed off....