Börse Berlin Equiduct Systems has announced that it has selected Fixnetix, the leading provider of low latency market data and trading infrastructure connectivity, to develop the fastest and most robust market data feed for its Equiduct Trading platform. Equiduct Trading will provide, from mid-2008, a pan-European regulated market offering cross-border trading services and market data distribution that needs the fastest and most reliable market data feed technology to ensure that its customers can take advantage of its Best Execution services.
Börse Berlin Equiduct Systems selected Fixnetix because its market data solutions deliver the fastest, most resilient and proven end-to-end performance without any buffering or loss of data, and the company was able to ensure minimal pan European latency to support the creation of Equiduct Trading's VBBO (Volume-weighted Best Bid and Offer) real-time feed for liquid instruments, which is derived from the full depth of the book from all relevant execution venues in Europe. Based on Fixnetix data, Börse Berlin Equiduct Trading believes that its VBBO provides the European benchmark price that is required as part of each investment firm?s equity execution policy.
Börse Berlin Equiduct Systems selected Fixnetix feeds after a detailed assessment of other market data vendors.
"Enabling our customers to quickly and cost-effectively meet the requirements under MiFID we need to ensure that we provide the most reliable VBBO prices" commented Artur Fischer, Joint CEO of Börse Berlin Equiduct Trading. "Our comprehensive testing confirmed that the Fixnetix feeds deliver the fastest and most comprehensive Level II data for all our target markets, and - as recent market conditions have shown - are robust enough not to drop or delay any data during volatile or fast market conditions" commented Rob Brouwer CIO of the Börse Berlin Equiduct Group. "With a key project like this, deadlines were of ultimate importance and we are pleased that Fixnetix were able to deliver this first phase of the project on time," he added.
"Fixnetix is committed to the success of Börse Berlin Equiduct Trading, and we?re delighted that Equiduct has recognized Fixnetix direct data feeds as the fastest and most resilient for demanding real-time applications such as the Equiduct Trading offering," added Hugh Hughes, Chief Executive Officer for Fixnetix. "Börse Berlin Equiduct Trading clearly realises that low latency services - and the ability of firms to provide a Best Execution capability - are meaningless without the proven end-to-end connectivity that can ensure robust performance across demanding multi-national environments. That's why we're proud of our ability to deliver sub-millisecond performance without any buffering or loss of data."
Saturday 12 April 2008
Friday 4 April 2008
Trading Glossary
aMembers or their customers.
3
Floor Trader
Also known as a "local". Exchange member who only trades for his own account.
Futures
All contracts covering purchase and sale of financial instruments or physical commodities for future delivery on a commodity futures exchange.
3
GAAP
Generally Accepted Accounting Principles.
Hedge
Strategy to limit investment loss by effecting a transaction which offsets an existing position.
Holder
Purchaser of an option
IFRS
International Financial Reporting Standards
IFRS 3
Accounting standard for "business combinations" or Merger and Acquisitions transactions. First standard written jointly by International Accounting Standards Board and the U.S. Financial Accounting Standards Board.
Initial Performance Bond
Also known as "Initial Margin". Funds required when a futures position is opened.
Integrity and Ethics
Reside under the Control Environment. The senior management need to set the tone for the company. Whilst they might be considered "soft" and "intangible" concepts, they affect the design, administration and monitoring of
Negative examples of integrity and ethics are the infamous Enron and WorldCom scandals.
A positive example is BP which sets a high bar for ethical behaviour by employees. To back this policy up they make mention of it and its effectiveness in financial reports.
In-the-money
Occurs if the strike price of a call option is less than the market price of the underlying security. For put options the strike price has to be higher than the market price of the underlying security for it to be in-the money.p>Intrinsic Value
Amount by which an option is in-the-money.
ISDA
International Swaps and Derivatives Association
LTCM
Long Term Capital Management
Margin Requirement for Options
Amount an uncovered (naked) option writer is required to deposit and maintain to cover a position. Calculated
Market Order
Order for immediate execution given to a broker to buy or sell at the best obtainable price.
Mark-To-Market
Daily adjustment of margin accounts to reflect profit and loss.
MD&A
Management's Disclosure and Analysis
Mezzanine
When applied to finance refers to moderate risk or mid level.
Minimum Price Fluctuation
Smallest increment of price movement possible in trading a given contract. It is also referred to as "lead month".
MUST
Multi-Underlying Structured Trade
NASPP
National Association of Stock Plan Professionals
Nearby
Nearest active trading month of a futures or options on futures contract.
NYSE
New York Stock Exchange
Offer
Price at which an investor is willing to sell a futures or options contract. Offset buying if one has sold, or selling if one has bought, a futures or options on futures contract.
Omgeo
Vendor of post-execution trade management solutions.
Omgeo TradeSuite
US trade confirmation service from Omgeo
Open Interest
Total number of futures or options on futures contracts that have not yet been offset or fulfilled by delivery. An indicator of the depth or liquidity of a market (the ability to buy or sell at or near a given price) and of the
Private Equity Intelligence
Research group specialising in the private equity arena.
Private File Creator
Private File Creator from Accuity allows users to create and maintain personalized lists of relevant business entities for use in their enhanced due diligence and Know Your Customer programs.
Prodiance
Provider of enterprise spreadsheet management
Public Company Accounting Oversight Board
Organization set up under Sarbanes-Oxley Act 2002 to regulate auditing of public companies and auditors.
Quantifi
provider of analytics and risk management solutions for the global credit markets.
Regulation FD
Regulation Fair Disclosure
Rule enforced by the SEC requiring U.S. to make available to the public that they make to securities analysts. If the disclosure is intentional the release has to be simultaneous. Unintentional
Repo
The practice of loaning out shares in return for cash.
Risk Assessment
One of five components of internal control according to the COSO Internal Control Framework
Risks faced by the company have to be recognized. Objectives have to be set, integrated into the value-chain. To achieve the objectives, risks have to be identified, analyzed and develop methods to manage them.
Rule 13a-15 (e)
SEC rule which defines Disclosure Controls and Procedures.
Rule 13a-15 (f)
SEC rule which defines Internal Control over Financial Reporting
SCSE
Society of Corporate Compliance and Ethics
SEC
Securities and Exchange Commission.
SOX
Shorthand for Sarbanes-Oxley.
Structured Notes
Derivatives-linked bonds designed to deliver high returns over a fixed period.
Synthetic Collateralised Debt Obligations
Repackaged portfolios of credit derivatives.
TOCOM
Tokyo Commodity Exchange
TS2
System proprosed by the ECB for a single securities settlements across the Eurozone.
TSE
Tokyo Stock Exchange
Foreign Exchange Terms
Arbitrage
Simultaneous sale and purchase of identical or equivalent financial instruments or commodity futures to benefit from a discrepancy in their prices.
Bank Of England
UK Central Bank
Bank Of Japan
Japan's Central Bank
Contract
1) Unit of trading for a financial or commodity future.
2) Bilateral agreement between buyer and seller (parties) of a futures or options on futures transaction. Defined by the exchange.
ECB
European Central Bank
Fiserv
provider of technology solutions for the financial and insurance industries.
FXall
Foreign exchange platform
Samurai Bond
A yen bond from a foreign company issued in Japan
FXall Up 39%
FXall, the world's leading foreign exchange platform, today announced trading volumes for the first quarter of 2008 of $4.1 trillion, an increase of 39% year on year.
The growth in volumes is driven by demand from both existing and new clients including asset managers, corporations, banks, broker-dealers and hedge funds. Active traders, algorithmic strategies and diversification by institutional investors who have embraced FX as an asset class have contributed to the strong growth in volumes.
FXall supports its clients through continuous investment in the technology and services they require. As an independent platform, FXall is committed to ensuring it continues to attract the deepest liquidity, therefore providing a diverse and valuable service to the broadest range of participants in the market.
Phil Weisberg, Chief Executive Officer of FXall, commented: “FXall has achieved consistent growth with volumes nearly tripling over the past three years. Investment in the products and services our clients demand remains a priority and we continue to innovate to provide a broad range of execution methods to match diverse client requirements.”
The growth in volumes is driven by demand from both existing and new clients including asset managers, corporations, banks, broker-dealers and hedge funds. Active traders, algorithmic strategies and diversification by institutional investors who have embraced FX as an asset class have contributed to the strong growth in volumes.
FXall supports its clients through continuous investment in the technology and services they require. As an independent platform, FXall is committed to ensuring it continues to attract the deepest liquidity, therefore providing a diverse and valuable service to the broadest range of participants in the market.
Phil Weisberg, Chief Executive Officer of FXall, commented: “FXall has achieved consistent growth with volumes nearly tripling over the past three years. Investment in the products and services our clients demand remains a priority and we continue to innovate to provide a broad range of execution methods to match diverse client requirements.”
Carne Global Launches Alternative Investments
Carne Global Financial Services Group (“Carne Global”) – the leading independent advisor to the European hedge fund and traditional fund management industries – today announces the opening of its Alternative Investment and Wealth Management Technology and Operational Consultancy divisions in London and the recruitment of senior industry figures Sunil Chadda and Phil Kitto to lead them respectively.
These divisions add technology capabilities to Carne Global’s existing operational services. The divisions will capitalise on Carne Global’s long established presence within the fund management industry, and build on its strong track record in providing tailored solutions, services and products for alternative asset managers and service providers.
Sunil Chadda joins Carne Global as Head of Alternative Investments where his focus will primarily be on developing and driving the firm’s alternative investment technology and operational offerings to alternatives players such as hedge funds, fund of hedge funds, fund administrators, prime brokers, and private equity managers.
Sunil joins from Citisoft, a London-based financial systems consultancy, where he held the position of Head of the Hedge Funds and Derivatives Practice for the last three years. Prior to Citisoft, Mr Chadda had a 15 year career with Schroder Investment Management, where he led the Fixed Income Fund Management Desk IT team. Mr Chadda has in-depth knowledge of financial markets, the software landscape, systems evaluation and implementation and operational procedures and controls, having worked in UK financial services for nearly 22 years.
Phil Kitto joins Carne Global from Citisoft, a London-based financial systems consultancy, to lead the new Global Wealth Management and Private Client division. His focus will primarily be on the development of the firm’s capabilities with regard to technology and operational offerings of wealth managers and private banks, outsource providers and software vendors.
Mr Kitto has in-depth understanding of financial markets, the software landscape, systems evaluation, platform implementation and operational procedures and controls accumulated with UBS, Baring Asset Management and MAM over a career in financial services of nearly 22 years.
Mr Chadda and Mr Kitto join Aymeric Lechartier, who was appointed by Carne Global earlier this year as Head of Business Development in London, formerly of Merrill Lynch.
The creation of the Alternative Investment and Wealth Management Technology and Operational Consultancy divisions marks another major milestone in the rapid growth of Carne Global, which now advises over 100 clients with assets under supervision of over US$200 billion, and has a staff of over 40 based in Dublin, London and Luxembourg.
Carne Global offers expertise in fund establishment, directorship programmes and comprehensive services to support managers in the operations and compliance of their products, which will be in greater demand as changes in regulation and national tax laws take effect.
John Donohoe, CEO of Carne Global, commented: “The entire fund management industry - both traditional and alternative - is experiencing high demand for expertise in risk management and technology, particularly with the convergence of those industries with wealth management. We are fortunate to be able to meet this demand with the addition of such highly respected industry figures as Phil Kitto and Sunil Chadda.”
These divisions add technology capabilities to Carne Global’s existing operational services. The divisions will capitalise on Carne Global’s long established presence within the fund management industry, and build on its strong track record in providing tailored solutions, services and products for alternative asset managers and service providers.
Sunil Chadda joins Carne Global as Head of Alternative Investments where his focus will primarily be on developing and driving the firm’s alternative investment technology and operational offerings to alternatives players such as hedge funds, fund of hedge funds, fund administrators, prime brokers, and private equity managers.
Sunil joins from Citisoft, a London-based financial systems consultancy, where he held the position of Head of the Hedge Funds and Derivatives Practice for the last three years. Prior to Citisoft, Mr Chadda had a 15 year career with Schroder Investment Management, where he led the Fixed Income Fund Management Desk IT team. Mr Chadda has in-depth knowledge of financial markets, the software landscape, systems evaluation and implementation and operational procedures and controls, having worked in UK financial services for nearly 22 years.
Phil Kitto joins Carne Global from Citisoft, a London-based financial systems consultancy, to lead the new Global Wealth Management and Private Client division. His focus will primarily be on the development of the firm’s capabilities with regard to technology and operational offerings of wealth managers and private banks, outsource providers and software vendors.
Mr Kitto has in-depth understanding of financial markets, the software landscape, systems evaluation, platform implementation and operational procedures and controls accumulated with UBS, Baring Asset Management and MAM over a career in financial services of nearly 22 years.
Mr Chadda and Mr Kitto join Aymeric Lechartier, who was appointed by Carne Global earlier this year as Head of Business Development in London, formerly of Merrill Lynch.
The creation of the Alternative Investment and Wealth Management Technology and Operational Consultancy divisions marks another major milestone in the rapid growth of Carne Global, which now advises over 100 clients with assets under supervision of over US$200 billion, and has a staff of over 40 based in Dublin, London and Luxembourg.
Carne Global offers expertise in fund establishment, directorship programmes and comprehensive services to support managers in the operations and compliance of their products, which will be in greater demand as changes in regulation and national tax laws take effect.
John Donohoe, CEO of Carne Global, commented: “The entire fund management industry - both traditional and alternative - is experiencing high demand for expertise in risk management and technology, particularly with the convergence of those industries with wealth management. We are fortunate to be able to meet this demand with the addition of such highly respected industry figures as Phil Kitto and Sunil Chadda.”
Fiserv to Supply Utica National Insurance
Fiserv, Inc. (NASDAQ: FISV), a leading provider of technology solutions for the financial and insurance industries, announced today that Utica National Insurance of New Hartford, N.Y., a Fiserv client for nearly 20 years, is upgrading to the new Fiserv Claims Workstation. Utica National, in operation for almost 100 years, writes personal and commercial lines of business that are serviced through a countrywide network of in-house and independent adjusters.
“We wanted easier access for remote users, a simpler claims intake process and more efficient interaction with third party data. In addition, we can consolidate all of our claims management onto Claims Workstation, and the web-based platform opens the door for future claims initiatives as well,” said John Nobles, vice president-director of Claim Operations for Utica National Insurance. “This decision supports our focus on meeting the needs of and providing outstanding service to our policyholders and agent/customers.”
“Utica National Insurance is a long-time Fiserv customer that will capitalize on the full claims life-cycle function and the support for all lines of P&C business within Claims Workstation,” said Gary Sherne, president of Property & Casualty Systems Solutions for Fiserv Insurance. “Claims Workstation is an important strategic platform for our customers and for Fiserv. Together we are focused on bringing true innovation to the claims management process.”
Claims Workstation extends property and casualty insurers’ capability to improve customer service, increase operational efficiency, and contain management expense. Claims Workstation offers the benefits of an open architecture and platform independence while using the J2EE (Java 2 Enterprise Edition) platform, which enables users to make business process and logic changes in a centralized environment.
“We wanted easier access for remote users, a simpler claims intake process and more efficient interaction with third party data. In addition, we can consolidate all of our claims management onto Claims Workstation, and the web-based platform opens the door for future claims initiatives as well,” said John Nobles, vice president-director of Claim Operations for Utica National Insurance. “This decision supports our focus on meeting the needs of and providing outstanding service to our policyholders and agent/customers.”
“Utica National Insurance is a long-time Fiserv customer that will capitalize on the full claims life-cycle function and the support for all lines of P&C business within Claims Workstation,” said Gary Sherne, president of Property & Casualty Systems Solutions for Fiserv Insurance. “Claims Workstation is an important strategic platform for our customers and for Fiserv. Together we are focused on bringing true innovation to the claims management process.”
Claims Workstation extends property and casualty insurers’ capability to improve customer service, increase operational efficiency, and contain management expense. Claims Workstation offers the benefits of an open architecture and platform independence while using the J2EE (Java 2 Enterprise Edition) platform, which enables users to make business process and logic changes in a centralized environment.
Halcyon Asset Management Appointment
Halcyon Asset Management LLC, a global asset management firm with over $11 billion under management, announced today that Jerry Bailey has been named Executive Vice President of Finance and Operations. Halcyon announced last month it will access the public markets through an acquisition by Alternative Asset Management Acquisition Corporation (AMEX:AMV) ("AAMAC"). Mr. Bailey has served as the CFO of several leading publicly traded financial services companies, including Dow Jones & Company and Salomon Inc., and will be key to developing and implementing Halcyon's new financial reporting and investor relations infrastructure.
Mr. Bailey has over 34 years of experience in finance, operations and accounting. He joins Halcyon from Bear Stearns Merchant Bank, the $4.4 billion private equity arm of Bear Stearns, where he was Senior Advisory Director focused on the financial technology sector. Previously, Mr. Bailey served as COO and CFO of NYMEX, the world's largest commodity and futures exchange, and helped position the firm for its initial public offering. Prior to Dow Jones and Salomon, his positions included CFO of Marsh Inc. and Managing Director and Controller of Morgan Stanley.
"Jerry is one of the smartest and most experienced finance and operations executives on Wall Street. We are delighted to have him on our team," said John Bader, Co-Chairman of Halcyon. "Jerry is superbly suited to oversee Halcyon's transition to a public company and will perfectly complement our CFO Aaron Goldberg, whose deep experience within the hedge fund industry remains invaluable."
"Halcyon is one of the oldest and most respected alternative asset managers in the business," said Mr. Bailey. "The firm is known for its consistent investment performance, as well as its first class finance, operations and client service. Being public will only help Halcyon in taking its investment capabilities and business to the next level. I am thrilled to be joining during this exciting phase of its growth and development."
Halcyon also announced that Suzanne McDermott will join the firm as Deputy Chief Compliance Officer and Senior Counsel at the end of April. Ms. McDermott has spent the past seven years as an Assistant United States Attorney in the Eastern District of New York, most recently in the securities fraud unit. Prior to that, she was a litigator in private practice. Ms. McDermott worked previously with Halcyon's Vice President of Legal Affairs, Manish Mital, when he was an enforcement attorney at the Securities and Exchange Commission.
Continuing the expansion of its investment teams, Halcyon announced that Saman Shams has joined Halcyon Real Estate Investors L.P. (HREI) as a Vice President. Mr. Shams was most recently a real estate investment banker at Credit Suisse First Boston. Over the course of nearly ten years, he worked on over $25 billion of transactions. Mr. Shams' appointment builds on Halcyon's continued expansion into distressed real estate. He joins Kyle Ransford, Chief Investment Officer of HREI, and Shawn Visutsiri, Vice President. Mr. Visutsiri joined the firm last summer after nine years at Summit Commercial Properties/Highridge Partners, where he was Vice President of Acquisitions.
Halcyon and AAMAC expect that the acquisition will be consummated and the combined company will start trading on the New York Stock Exchange during the third quarter of 2008, pending AAMAC stockholder approval, Halcyon client consent, regulatory approval and other customary closing conditions.
Mr. Bailey has over 34 years of experience in finance, operations and accounting. He joins Halcyon from Bear Stearns Merchant Bank, the $4.4 billion private equity arm of Bear Stearns, where he was Senior Advisory Director focused on the financial technology sector. Previously, Mr. Bailey served as COO and CFO of NYMEX, the world's largest commodity and futures exchange, and helped position the firm for its initial public offering. Prior to Dow Jones and Salomon, his positions included CFO of Marsh Inc. and Managing Director and Controller of Morgan Stanley.
"Jerry is one of the smartest and most experienced finance and operations executives on Wall Street. We are delighted to have him on our team," said John Bader, Co-Chairman of Halcyon. "Jerry is superbly suited to oversee Halcyon's transition to a public company and will perfectly complement our CFO Aaron Goldberg, whose deep experience within the hedge fund industry remains invaluable."
"Halcyon is one of the oldest and most respected alternative asset managers in the business," said Mr. Bailey. "The firm is known for its consistent investment performance, as well as its first class finance, operations and client service. Being public will only help Halcyon in taking its investment capabilities and business to the next level. I am thrilled to be joining during this exciting phase of its growth and development."
Halcyon also announced that Suzanne McDermott will join the firm as Deputy Chief Compliance Officer and Senior Counsel at the end of April. Ms. McDermott has spent the past seven years as an Assistant United States Attorney in the Eastern District of New York, most recently in the securities fraud unit. Prior to that, she was a litigator in private practice. Ms. McDermott worked previously with Halcyon's Vice President of Legal Affairs, Manish Mital, when he was an enforcement attorney at the Securities and Exchange Commission.
Continuing the expansion of its investment teams, Halcyon announced that Saman Shams has joined Halcyon Real Estate Investors L.P. (HREI) as a Vice President. Mr. Shams was most recently a real estate investment banker at Credit Suisse First Boston. Over the course of nearly ten years, he worked on over $25 billion of transactions. Mr. Shams' appointment builds on Halcyon's continued expansion into distressed real estate. He joins Kyle Ransford, Chief Investment Officer of HREI, and Shawn Visutsiri, Vice President. Mr. Visutsiri joined the firm last summer after nine years at Summit Commercial Properties/Highridge Partners, where he was Vice President of Acquisitions.
Halcyon and AAMAC expect that the acquisition will be consummated and the combined company will start trading on the New York Stock Exchange during the third quarter of 2008, pending AAMAC stockholder approval, Halcyon client consent, regulatory approval and other customary closing conditions.
BNY ConvergEx Group Asian Appointment
BNY ConvergEx Group, LLC, a leading provider of global agency brokerage and investment technology solutions, today announced the appointment of Luis Camacho as Head of ConvergEx Global Markets Asia. He will be based in Hong Kong and report to Anthony Blumberg in New York. ConvergEx Global Markets specializes in global agency trading in over 94 markets worldwide, including global portfolio trading, single stock and block-trading, portfolio rebalancing, foreign exchange and liquidations.
Mr. Camacho, previously a Senior Vice President for ConvergEx Global Markets in New York, will now manage all aspects of that business in the Asia Pacific region, which includes overseeing all sales and trading, client development, and trading technology infrastructure. Prior to joining BNY ConvergEx Group, Mr. Camacho held a number of senior trading positions at JP Morgan, Credit Agricole, and Societe Generale.
Joseph M. Velli, Chairman and Chief Executive Officer of BNY ConvergEx Group, commented, "Ensuring the continued strength of our global trading capabilities is essential to meeting the investment needs of our clients. We are extremely pleased to have a person of Luis's caliber take on a leadership role in a business and region that is central to the ConvergEx franchise."
"Luis brings an abundance of international trading expertise and a wealth of relationships in the local and global institutional investment community to his new role as head of ConvergEx Global Markets Asia," commented Anthony Blumberg, Chief Executive Officer of ConvergEx Global Markets. "I am confident that our clients in Asia and throughout the world will benefit significantly from this appointment."
In addition to appointing a new head of ConvergEx Global Markets Asia, ConvergEx also recently enhanced its client servicing capabilities in Japan through the hire of Yasuo Kitagawa as Head of Japan Product Sales for BNY Global Transition Management. Mr. Kitagawa is responsible for business development in Japan for the pension fund, insurance and asset management sectors, working with clients to develop and implement cost efficient transition management strategies.
Mr. Camacho, previously a Senior Vice President for ConvergEx Global Markets in New York, will now manage all aspects of that business in the Asia Pacific region, which includes overseeing all sales and trading, client development, and trading technology infrastructure. Prior to joining BNY ConvergEx Group, Mr. Camacho held a number of senior trading positions at JP Morgan, Credit Agricole, and Societe Generale.
Joseph M. Velli, Chairman and Chief Executive Officer of BNY ConvergEx Group, commented, "Ensuring the continued strength of our global trading capabilities is essential to meeting the investment needs of our clients. We are extremely pleased to have a person of Luis's caliber take on a leadership role in a business and region that is central to the ConvergEx franchise."
"Luis brings an abundance of international trading expertise and a wealth of relationships in the local and global institutional investment community to his new role as head of ConvergEx Global Markets Asia," commented Anthony Blumberg, Chief Executive Officer of ConvergEx Global Markets. "I am confident that our clients in Asia and throughout the world will benefit significantly from this appointment."
In addition to appointing a new head of ConvergEx Global Markets Asia, ConvergEx also recently enhanced its client servicing capabilities in Japan through the hire of Yasuo Kitagawa as Head of Japan Product Sales for BNY Global Transition Management. Mr. Kitagawa is responsible for business development in Japan for the pension fund, insurance and asset management sectors, working with clients to develop and implement cost efficient transition management strategies.
Wednesday 2 April 2008
Weather Derivatives
FS Energy, LLC, a leading interdealer broker and a subsidiary of Compagnie Financiere Tradition, today announced its US and Australia-based weather derivatives division completed the first-ever auction in Asia on behalf of a client who was looking to diversify its weather exposure and to help build liquidity in Japan. Offers were solicited for cumulative average temperature futures and calls in Japan for the May - September 2008 time period for the cities of Tokyo and Osaka. The auction was fully placed and was over subscribed in terms of the capacity that was available in the market. Offers interested in participating in the auction had to submit formal proposals to TFS Energy by 12 noon (Eastern Standard Time) on March 27, 2008. The auction followed the very successful Dutch auction format, which has been repeatedly used by TFS Energy clients throughout the world.
"We are very pleased with the notional value of $11.25 million for the first-ever auction in Japan. Closing this auction signals the benefits of the auction format especially in areas of the world that do not have a highly liquid weather market. From the interest that we saw in this auction and the amount of business that traded bilaterally immediately following the auction, it is fair to say that we tapped into the growth potential that we have seen all along in Asia," commented Kendall Johnson, MD and Global Head of Weather Derivatives for TFS Energy. "This will be the first of many more transactions to come."
TFS Energy has hosted numerous auctions ranging in magnitude from $1 million to upwards of $60 million of transferred risk. This auction comes after TFS Energy's largest-ever Dutch auction on behalf of UBS, where the notional value was in excess of $64 million. Its weather desks are located in Stamford, London, and Sydney.
"We are very pleased with the notional value of $11.25 million for the first-ever auction in Japan. Closing this auction signals the benefits of the auction format especially in areas of the world that do not have a highly liquid weather market. From the interest that we saw in this auction and the amount of business that traded bilaterally immediately following the auction, it is fair to say that we tapped into the growth potential that we have seen all along in Asia," commented Kendall Johnson, MD and Global Head of Weather Derivatives for TFS Energy. "This will be the first of many more transactions to come."
TFS Energy has hosted numerous auctions ranging in magnitude from $1 million to upwards of $60 million of transferred risk. This auction comes after TFS Energy's largest-ever Dutch auction on behalf of UBS, where the notional value was in excess of $64 million. Its weather desks are located in Stamford, London, and Sydney.
Tuesday 1 April 2008
Trading Glossary
ABCDS
A credit default swap based on an Asset-Backed Security itself based on relatively risky home equity loans (U.S.) In effect a type of insurance against default on the underlying ABS.
ABCP
Taiwan: Asset-Backed Commercial Paper
AICPA
American Institute of Certified Public Accountants
Alpha
Hedge Funds: the incremental return above the market that a manager generates.
American-Style Option
Option contract which can be excercised at any time between the purchase date and the expiration date. Most commonly exchange-traded option in the U.S.
Arbitrage
Simultaneous sale and purchase of identical or equivalent financial instruments or commodity futures to benefit from a discrepancy in their prices.
Assignment
Receipt of an exercise notice by an option writer (seller) that obligates him to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.
At-the-money
Occurs if the strike price of the option is equal to the market price of underlying security.
Back-months
Futures or options on futures months being traded that are furthest from expiration.
BaFin
Germany: financial regulator
Bank Of England
UK Central Bank
Bear
Person who believes prices will move lower
Bear Market
Market in which prices are moving lower.
Beta
Hedge Funds: market exposure
Bid
Price that market participants are willing to pay.
Bull
Person who believes prices will move higher
Bull Market
Market in which prices are moving higher.
Buy on Close
Buy at the end of a trading session at a price within the closing range.
Buy on Opening
Buy at the beginning of a trading session at a price within the opening range.
Call
An option contract giving the holder the right to buy the underlying security at a specified price for a certain, fixed period of time.
Capped-Style Option
Option with an established profit cap. The cap price is equal to the option's strike price plus a cap interval for a call option or the strike price minus a cap interval for a put option. Exercised automatically when the underlying security closes above or below the cap price, depending on whether it is a call or a put.
CEO
Chief Executive Officer
CFO
Chief Financial Officer
CII
Council of Institutional Investors
CIO
Chief Investment Officer
Close
End of trading session period. Also called the Closing Range. The official close is designated as the high and low prices or bids and offers recorded during the period.
Closing Purchase
Transaction entered into to reduce or eliminate a short position in a given series of options.
Commission
One off fee brokerage fee to a customer when a futures or options on futures position is liquidated either by offset or delivery.
Contract
1) Unit of trading for a financial or commodity future.
2) Bilateral agreement between buyer and seller (parties) of a futures or options on futures transaction. Defined by the exchange.
Contract Month
The month in which futures contracts may be satisfied by making or accepting delivery.
Covered Call Option Writing
Trading strategy involving simultaneously selling call options and owning an equivalent position in the underlying security. The reverse is to sells a put option and shorting the underlying security.
Day Order
Order placed for execution within one trading session. Automatically cancelled if it can not be executed within the day.
Day Trading
Within one day establishing and liquidating the same position or positions. No positions should be established at the days end.
Deferred
Back Months
Delivery
Tender and receipt of an actual commodity or financial instrument, or cash in settlement of a futures contract.
Derivative Security
Financial security whose value is determined in part from an another security's (the underlying security) value and characteristic.
Dow Joines Industrial Average
US Index made up of 30 picked stocks. Weighted by share price
EAI
Enhanced Analytics Initiative
ECB
European Central Bank
EPS
Earnings Per Share
Equity Options
Options on shares of an individual common stock.
ERFRAG
European Financial Reporting Advisory Group
ERM
Enterprise Risk Management
ETF
Exchange-Traded Fund
European-style Options
Option contracts that can only be exercised during a specified period of time just prior to their expiration.
Exercise Settlement Amount
Difference between the exercise price of the option and the exercise settlement value of the index on the day an exercise notice is tendered , multiplied by the index multiplier.
Expiration Cycle
The dates on which options on an underlying security expire. A given option is assigned to one of three cycles, January, February or March.
Expiration Date
Date on which an option and the right to exercise it, cease to exist.
FASAC
Financial Accounting Standards Advisory Council
FASB
Financial Accounting Standards Board
Financial Accounting Standards Advisory Council
Overseer of the Financial Accounting Standards Board.
Financial Reporting
Defined by the COSO Framework as:-
The preparation of reliable published financial statements, including interim and condensed financial statements and selected financial data derived from such statements, such as earnings releases, reported publicly.
Financial Supervisory Commission
Taiwan: financial regulator
Floor Broker
Licensed member of an Exchange, who is paid a fee for executing orders for Clearing Members or their customers.
Floor Trader
Also known as a "local". Exchange member who only trades for his own account.
Futures
All contracts covering purchase and sale of financial instruments or physical commodities for future delivery on a commodity futures exchange.
3
GAAP
Generally Accepted Accounting Principles.
Hedge
Strategy to limit investment loss by effecting a transaction which offsets an existing position.
Holder
Purchaser of an option
IFRS
International Financial Reporting Standards
IFRS 3
Accounting standard for "business combinations" or Merger and Acquisitions transactions. First standard written jointly by International Accounting Standards Board and the U.S. Financial Accounting Standards Board.
Initial Performance Bond
Also known as "Initial Margin". Funds required when a futures position is opened.
Integrity and Ethics
Reside under the Control Environment. The senior management need to set the tone for the company. Whilst they might be considered "soft" and "intangible" concepts, they affect the design, administration and monitoring of other internal controls. According to COSO, the actions of management is more important than having them written down.
Negative examples of integrity and ethics are the infamous Enron and WorldCom scandals.
A positive example is BP which sets a high bar for ethical behaviour by employees. To back this policy up they make mention of it and its effectiveness in financial reports.
In-the-money
Occurs if the strike price of a call option is less than the market price of the underlying security. For put options the strike price has to be higher than the market price of the underlying security for it to be in-the money.
Intrinsic Value
Amount by which an option is in-the-money.
ISDA
International Swaps and Derivatives Association
LTCM
Long Term Capital Management
Margin Requirement for Options
Amount an uncovered (naked) option writer is required to deposit and maintain to cover a position. Calculated
Market Order
Order for immediate execution given to a broker to buy or sell at the best obtainable price.
Mark-To-Market
Daily adjustment of margin accounts to reflect profit and loss.
MD&A
Management's Disclosure and Analysis
Mezzanine
When applied to finance refers to moderate risk or mid level.
Minimum Price Fluctuation
Smallest increment of price movement possible in trading a given contract. It is also referred to as "lead month".
NASPP
National Association of Stock Plan Professionals
Nearby
Nearest active trading month of a futures or options on futures contract.
NYSE
New York Stock Exchange
Offer
Price at which an investor is willing to sell a futures or options contract. Offset buying if one has sold, or selling if one has bought, a futures or options on futures contract.
Open Interest
Total number of futures or options on futures contracts that have not yet been offset or fulfilled by delivery. An indicator of the depth or liquidity of a market (the ability to buy or sell at or near a given price) and of the use of a market for risk and/or asset management.
Private Equity Intelligence
Research group specialising in the private equity arena.
Public Company Accounting Oversight Board
Organization set up under Sarbanes-Oxley Act 2002 to regulate auditing of public companies and auditors.
Regulation FD
Regulation Fair Disclosure
Rule enforced by the SEC requiring U.S. to make available to the public that they make to securities analysts. If the disclosure is intentional the release has to be simultaneous. Unintentional disclosure has to be made available to the public within 24 hours.
Repo
The practice of loaning out shares in return for cash.
Risk Assessment
One of five components of internal control according to the COSO Internal Control Framework
Risks faced by the company have to be recognized. Objectives have to be set, integrated into the value-chain. To achieve the objectives, risks have to be identified, analyzed and develop methods to manage them.
Rule 13a-15 (e)
SEC rule which defines Disclosure Controls and Procedures.
Rule 13a-15 (f)
SEC rule which defines Internal Control over Financial Reporting
SCSE
Society of Corporate Compliance and Ethics
SEC
Securities and Exchange Commission.
SOX
Shorthand for Sarbanes-Oxley.
Structured Notes
Derivatives-linked bonds designed to deliver high returns over a fixed period.
Synthetic Collateralised Debt Obligations
Repackaged portfolios of credit derivatives.
TOCOM
Tokyo Commodity Exchange
TS2
System proprosed by the ECB for a single securities settlements across the Eurozone.
TSE
Tokyo Stock Exchange
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