Commodity Futures Trading Blog

Commodity Brokers Want Futures Trading Investors to Understand Why so Many Options Purchases Lose Money

Port St. Lucie, FL (PRWEB) August 20, 2006

T & K Futures believes that the two greatest enemies for futures traders who are option buying investors, besides themselves, are time decay and volatility premium. It amazes the company that many people have never heard of these key components of option value. Options are by their very nature a wasting asset. Given a flat market scenario, they lose premium value daily. The only way for an option purchaser to make money is for the value of the option premium to increase more relative to the time decay of that option.

What is volatility premium? When one buys and option (call/put), they are buying the right to buy or sell from an option grantor. They collect the premium that one pays for the option. They hope that the person loses because if that happens they win. This is the whole zero sum investment thing people have heard about. The option grantor takes on the lion’s share of the financial risk because while people are only liable for the premium that one pays for the option they are liable for the value of the contract.

So they increase the price of the option premium to offset their risk relative the volatility of the market. The more price movement in the futures market where people purchase an option, the more volatility risk the grantor is taking. In other words, the chances to reach strike price objectives are more attainable so the grantor charges more.

Past performance is not indicative of future results. Futures trading and option investments are risky and people can lose money. Use only risk capital when investing in futures or options.

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Commodity Futures Investing is On the Rise for Individual Investors.

(PRWEB) August 20, 2004

The Chicago Mercantile Exchange, the largest U.S. futures exchange, reported in July 2004 record trading volume, up 29% over prior years trading volume. The Chicago Board of Trade also reported record setting trading volume for the same period. According to Joe Fallico, principal broker at Insignia Futures and Options, “The playing field has now been leveled as the numbers of our clients that are “part-time” investors is sharply on the rise”. Commodity futures trading has become extremely popular in recent years due to several factors. Probably the number one reason for this growth is the readily available wealth of information on the subject of commodity futures investing found on the internet. Not too long ago, commodity futures trading was thought by many investors to be too complicated, too demanding and required great sums of capital to participate in. This is simply not the case, investing in commodity futures is very straightforward and is very similar to other forms of investments, particularly stocks. The same time demands found in trading stocks is typically equal to the time necessary to research commodity futures trades. Traditionally, commodity futures brokerage firms would require a minimum investment of ,000, ,000 or even more. In light of the overwhelming demand, Insignia Futures and Options has lowered their minimum investment to ,000 for investors interested in trading commodity futures.

Another main factor contributing to the explosive growth of commodity futures investors is the vast majority of commodity futures brokerage firms that now offer their clients on-line, electronic trading via the internet. Insignia Futures & Options offers two (2) state-of-the-art, electronic trading platforms that route their client’s orders directly to the appropriate futures exchange for execution within one second of order submittal. Insignia Futures & Options also provides the trading tools necessary to assist clients in their trading and investing strategies including quotes, charts, market reports, news and daily research.

Insignia Futures & Options is a discount and full service commodity futures brokerage firm and are members of the National Futures Association. Insignia Futures & Options specializes in providing both seasoned investors as well a beginning investors the assistance, support and tools necessary to help achieve their investment goals.

There is a risk of loss in futures trading.

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Veotoro Management LLC Implements SunGard’s Kiodex SaaS Solution for Commodity Trading and Risk Management

SunGard Logo

New York, NY (Vocus) September 24, 2008

Veotoro Management, a Miami-based commodity hedge fund, has implemented SunGard’s Kiodex Risk Workbench for commodity trading and risk management. Veotoro will use Kiodex to manage portfolio risk using a range of reports for risk analysis, profit and loss, attribution, mark to market and Value at Risk (VaR). Kiodex will support the new fund’s relative value trading strategy in commodities and in the global energy sector.

Delivered as a Software-as-a-Service* (SaaS) solution, SunGard’s Kiodex is a Web-based commodity trading and risk management solution that integrates trade capture, valuation models, risk measurement, financial reporting and independent market data. By providing commodity-specific risk analysis tools and data, Kiodex helps Veotoro to accurately value its portfolio of commodity and energy trades and manage portfolio risk. Kiodex’s SaaS delivery model provides an automated, Web-based environment to help Veotoro simplify implementation, accelerate time-to-market, gain processing efficiencies and reduce ongoing maintenance and support costs.

Virgilio Guma, managing director at Veotoro Management LLC, said, “Kiodex’s risk analytics, combined with the provision of global market data, sets it apart from other solutions. Not only does Kiodex provide independent valuation of our commodity portfolio, but it can also help us identify trading and arbitrage opportunities. In addition to meeting our aggressive timelines, Kiodex has helped us to streamline our daily trade entry and broker processes, accurately reflect our trading strategies, and achieve straight-through processing through integration with our trading platforms. SunGard has demonstrated Kiodex’s proven value in supporting comparable objectives in other hedge funds.”

Ben Jackson, chief operating officer of SunGard’s Kiodex, said, “As commodities make the transition into mainstream asset classes, they present investors with an opportunity to earn long-term absolute returns. Increasingly, hedge funds looking to raise capital through commodity and energy trading demand robust risk analysis tools and market data in a growing commodities market that is fueling emerging market growth. Kiodex’s proven risk analysis capabilities and SaaS deployment help these firms raise capital and achieve their business objectives quickly.”

*SunGard Financial Systems is pursuing a visionary initiative to transform some of the key functionality of its core systems into components to form a new software development and on-demand delivery environment called Infinity. Infinity enables financial institutions to develop and deploy custom applications, integrating SunGard components with their own proprietary or third party components. Infinity uses SunGard’s Common Services Architecture (CSA), a service-oriented architecture (SOA) development framework, offering business process management (BPM) and a virtualized, software-as-a-service (SaaS) infrastructure.

About SunGard’s Kiodex: A Web-based trading and risk management solution for commodities traders, delivered on a Software-as-a-Service basis, Kiodex integrates deal capture and risk management capabilities with valuation models and independent market data. Traders, hedge funds and corporations with exposure to commodity prices use Kiodex to help measure risk, design optimal hedging strategies, improve price execution, and comply with accounting best practices. Visit SunGard’s Kiodex at http://www.sungard.com/kiodex.

About SunGard: With annual revenue of billion, SunGard is a global leader in software and processing solutions for financial services, higher education and the public sector. SunGard also helps information-dependent enterprises of all types to ensure the continuity of their business. SunGard serves more than 25,000 customers in more than 50 countries, including the world’s 50 largest financial services companies. Visit SunGard at http://www.sungard.com.

Trademark Information: SunGard, the SunGard logo and Kiodex are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.

For more information, please contact: Adriana Senior SunGard Tel: 718-578-1130      adriana.senior @ sungard.com

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Industry Leaders Discuss Future of Commodity Trade and Risk Management Software

Houston, TX and Brno, Czech Republic (PRWEB) May 26, 2011

CommodityPoint, a leading analyst firm for the Commodity Trade and Risk Management (CTRM) industry, announced today they will host a second event in the CTRM Technical Conference Series on July 21, 2011 in Houston, Texas. The announcement comes after overwhelmingly positive feedback and record-setting attendance at the CTRM Conference in Prague, Czech Republic on May 23, 2011.

“The CTRM Technical Conference is an important venue, providing a forum for education, networking and shared experiences that have been much needed in the industry for some time,” said CommodityPoint Managing Director Gary M. Vasey, PhD. “We are delighted that our inaugural event in Prague was so well attended and highly rated by those attending; this provides a superb benchmark by which to judge our future CTRM Technical Conference Series events.”

The CTRM Conference is a one day event that focuses on important technical issues in the commodity trading and risk management business function including: CTRM software, risk management software, data management and more. Ideal for those involved in selecting, procuring, and/or implementing CTRM software, the conference hosts a series of speakers who have direct end-user experience. A round table discussion featuring notable industry leaders and a CommodityPoint analyst is also planned.

Director of Global IT for Gazprom Marketing and Trading, Rob Pringle will deliver the keynote presentation, “CTRM for a Global Trading Business: Does Utopia Exist?” Other scheduled presenters include Ed Bell, executive professor, Department of Decision and Information Sciences, CT Bauer College of Business at the University of Houston, and Founder and CEO of Eka Software Solutions Manav Garg.

The CTRM Conference in Houston follows the first event of the series which was held in Prague on May 23rd. Over ninety participants attended representing various industries including: utilities, financial institutions, merchants and traders of commodities as well as oil, gas, agricultural, and mining producers. Feedback was positive and encouraging as a result.

“Fantastic choices for speakers. I found the content fantastic,” said one attendee.

“I am planning to write a blog about the conference,” said David Calmonson from Contigo. “I have just written up my 10 pages of notes!! It was excellent, useful, and enjoyable. I will most definitely be at the next one — you can quote me on that!”

About CommodityPoint CommodityPoint is a division of leading energy and utilities analyst and consulting firm, UtiliPoint International, Inc. and a subsidiary of Midas Medici Group Holdings, Inc. (OTCBB:MMED) CommodityPoint provides Commodity Trading & Risk Management (E/CTRM) research, analysis and consulting services that offer insight into business issues, trends, processes and technology, to energy, agricultural and metals trading companies, utilities, banks, brokers, funds, investors and vendors, enhancing their competitive position and supporting critical business decisions. With offices in Europe and the U.S., and backed by an experienced research team, CommodityPoint provides an unparalleled view of the marketplace. Visit CommodityPoint on the Web: http://www.commodity-point.com

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, Vocus PRW Holdings, LLC. Vocus, PRWeb, and Publicity Wire are trademarks or registered trademarks of Vocus, Inc. or Vocus PRW Holdings, LLC.