How the Basic Fundamentals Move Interest Rates
Article Abstract:
Interest rate futures investment necessitates a firm grasp of the basic conditions of supply and demand, perhaps to a greater extent than is necessary in traditional commodities. The Federal Reserve rate in the money supply can be followed by watching the M1 and M2 figures on Fridays. Money supply expansion under four per cent is considered tight. Money figures are often indicative of inflation figures a year or so later. Consumer and producer price indexes are also a valuable tool for interest rate futures traders. The link between inflation, production and monetary supply is analyzed. Three of the Department of Commerce's leading indicators index are quite useful for traders: orders for plant and equipment, net business formations and Standard and Poor stock prices. The variance between real released figures and expectations is an essential aspect of market fluctuation.
Publication Name: Futures: Magazine of Commodities & Options
Subject: Business, general
ISSN:
Year: 1984
User Contributions:
Comment about this article or add new information about this topic:
The Intermarket Express: Traveling on Both Legs
Article Abstract:
An investment strategy often used in trading commodities is called spreading. Spreading is most commonly used when trading between Government National Mortgage Association (GNMA), Collateralized Depository Receipts (CDRs) and United States Treasury Bonds (T-Bonds). An investor would have a short position in one of the two while having a long position in the other one. When interest rate spread between the two is stable, trading is quiet. When greater fluctuations occur there is greater risk involved. The GNMA and CDR's track intermediate interest rates while the T-Bonds track long-term rates.
Publication Name: Futures: Magazine of Commodities & Options
Subject: Business, general
ISSN:
Year: 1984
User Contributions:
Comment about this article or add new information about this topic:
How Horizontal Spreads Bloom in a Flat Market
Article Abstract:
One of the best ways to maximize the flexibility of options is with option spreads. One of the spread strategies is a horizontal spread which is the simultaneous purchase and sale of a put and call. The two legs of the spread have the same strike price but different expiration dates. Option spreads give the investor an opportunity to turn a profit in a flat or down market. In order to capitalize on time value delay, an investor must sell the nearby option and buy the deferred option.
Publication Name: Futures: Magazine of Commodities & Options
Subject: Business, general
ISSN:
Year: 1984
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Charging it the Diners Club way. No bones about it, new brands help a pet project. Home buyers are crazy
- Abstracts: Natural Language Lets Anyone Use Computers. Integrated Software Riches Ignite a Market
- Abstracts: Bad Deal? Not Exactly Uniform. Florida Thwarts Casino Offer
- Abstracts: Embattled Castle & Cook. AT&T: Buy or Sell?
- Abstracts: Banks Getting Fancy with Index Trading. Closing the 'Gap': S&L's Trading Bigger and Smarter. Turning Weather Forecasts into Market Profits