Commodity markets for the 21st century April 24, 2009
Posted by James Webster in : finance, gadgets, development , add a commentRecently there were a few news stories relating to potential shortages of NAND flash RAM due to Apple ordering a large volume of chips from Samsung (rumoured to be heading to a 32Gb iPhone).
From the DigiTimes article:
Downstream memory suppliers are striving to grab more NAND flash chips to meet substantial volumes of short lead-time orders from device makers
Clearly there is extensive risk for flash memory suppliers and OEMs in this market. I was wondering if an active futures market for buyers and sellers of memory would be feasible. A bit of further research uncovered DRAMeXchange which provides market data for various memory products (similar to Platts, one of the major market data providers for the energy market). Could they go a step further and set up a liquid market for buying and selling risk around memory supply? Obviously not all chips are created equal; the contract you use to hedge your risk may be for delivery of a particular type of flash memory that is slightly different to the one that you will be purchasing in the physical market. In financial/commodities markets this is known as basis risk and is understood to be something that needs to be monitored when hedging a risk exposure.
I also came across Zerobeta’s blog recently (via Park Paradigm). An interesting insight into Ztail (TechCrunch):
Whats interesting is if Ztail is selling naked puts on spot ipods, they have a synthetic position that is short the call option and long the futures. While I understand that they don’t really have that position, but it is an interesting position nonetheless and their guaranteed price should be a good (albeit hopefully low) gauge on what a 1 year out ipod futures are trading at.
Another interesting article over at Ars Technica, Why high-performance computing needs financial engineering:
If (Richard Bookstaber) is correct with his recently floated hypothesis that “the days for high frequency trading are numbered,” then this would be pretty bad news for Intel, AMD/ATI, and NVIDIA.
As biotech moves further from research to commercialisation it is the obvious candidate to pick up the slack in HPC demand if high-frequency trading does in fact fall off (a forecast I disagree with). Could a GPGPU-powered compute grid help a team win the Archon Genomics XPrize?
Finally, the source code for the JPMorgan CDS model (which I discussed here) was released and is available at cdsmodel.com.
Clearing and settlement February 18, 2009
Posted by James Webster in : finance , add a commentI came across Clearing and Settlement News today, an interesting blog commenting upon and summarising some of the key issues and news in the clearing and settlement industry. As I’ve said previously this is an area that will only continue to grow and become more complicated, especially given the pressure on the industry to clear exotic OTC derivatives in a transparent and prompt fashion.
The author, Scott Riley is a director with Chi-X . He has also provided links on his blog to additional reporting on the proposed launch of new ECN’s in Australia, something I have covered a bit here (#1, #2, #3, #4) but not been watching lately. No doubt he is being given all sorts of fun headaches by ASIC’s softly-softly approach to actually opening the market up to new entrants.
If you want more info on clearing and settlement processes, Michael Simmons’ Securities Operations (Amazon UK
twitter ticker February 13, 2009
Posted by James Webster in : web, finance , add a commentMy favourite Twitter client TweetDeck has been updated to include built-in support for the day-trading Twitter community StockTwits (via ReadWriteWeb);
You can think of it as Bloomberg for the little guy and gal.
Or more cynically, another place for uninformed traders (aka gamblers) to fall victim to pump and dump scams?
Clearly Twitter is no replacement for professional trading tools. That said, IM plays a significant role on many trading floors these days; the next time I am on ours I’ll keep an eye out for TweetDeck! There are a few other Twitter tools with a financial focus. Fred Wilson recommends mytrade’s Twitter quote bot. It would be interesting to see Twitter integration with a stock screening application as well… “@trader AAPL is trending above VWAP“.
I would sign up to StockTwits but I am less than keen on giving out my Twitter credentials. The sooner Twitter supports an OAuth-style authorisation mechanism for 3rd party websites the better. Despite signing up for Loic Le Meur’s Team Seesmic-Twhirl to try out Twhirl’s Seesmic integration (hmmm… is there a possible StockTwits and Seesmic overlap for a crowd-sourced Internet alternative to CNBC?) I gave it a miss when it required signing up for yet another social network account; between a handful of OpenID’s and Google/Facebook/Twitter account I think I am now waiting for them all to just start letting me cross-authenticate.
Finally, a plug for my own Twitter feed.