February 9th, 2010
Open outcry is the name of a method of communication between professionals on a stock exchange or futures exchange which involves shouting and the use of hand signals to transfer information primarily about buy and sell orders.[2] The part of the trading floor where this takes place is called a pit.
Examples of markets which use this system in the United States are the New York Mercantile Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, and the Chicago Board Options Exchange. In the United Kingdom, the London Metal Exchangethe Ethiopian Commodity Exchange(ECX) still makes use of open outcry.
The open outcry system is being replaced by electronic trading systems (such as CATS and Globex). The supporters of electronic trading claim that they are faster, cheaper, more efficient for users, and less prone to manipulation by market makers and broker/dealers. However, many traders advocate for the open outcry system on the basis that the physical contact allows traders to speculate as to a buyer/seller’s motives or intentions and adjust their positions accordingly.
A “trading floor” is a trading venue. This expression often refers to a place where traders or stock brokers meet in order to buy and sell equities, also called a pit. Sometimes, the expression “trading floor” is also used to refer to the “trading room” or “dealing room”, i.e. the office space where market activities are concentrated in investment banks or brokerage houses. But, technically speaking, these two spaces are different.
Tags: finance, NYMEX, options, scalping, stock exchange, trader, traders, trading
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February 5th, 2010
Brent Crude is the biggest of the many major classifications of oil consisting of Brent Crude, Brent Sweet Light Crude, Oseberg, Ekofisk and Forties. Brent Crude is sourced from the North Sea. The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum. It is used to price two thirds of the world’s internationally traded crude oil supplies.
The other well-known classifications (also called references or benchmarks) are the OPEC Reference Basket, Dubai Crude and West Texas Intermediate (WTI).
The name “Brent” comes from the naming policy of Shell UK Exploration and Production, operating on behalf of Exxon and Shell, which originally named all of its fields after birds (in this case the Brent Goose).
Oil production from Europe, Africa and the Middle East flowing West tends to be priced relative to this oil, i.e. it forms a benchmark. However, large parts of Europe now receive their oil from the former Soviet Union, especially through Russia.
Brent blend is a light crude oil, though not as light as WTI. It contains approximately 0.37% of sulphur, classifying it as sweet crude, yet again not as sweet as WTI. Brent is ideal for production of gasoline and middle distillates. It is typically refined in Northwest Europe, but when the market prices are favorable for export, it can be refined also in the East or Gulf coasts of the United States or in the Mediterranean region.
Brent Crude has an API gravity of around 38.06 and a specific gravity of around 0.835.
The symbol for Brent crude is LCO. It was originally traded on the open-outcry International Petroleum Exchange in London, but since 2005 has been traded on the electronic IntercontinentalExchange, known as ICE. One contract equals 1,000 barrels (160 m3). Contracts are quoted in U.S. dollars, therefore each tick lost or gained equals $10.
Tags: commodities, futures, investing, oil, options, traders
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