Re: cash ,,,,

[Robert W Cummings <robert.cummings@xxxxxxxxxxxxxxxx>]

I not sure but I assumed this was a study for cash to futures not cash to
futures using only equity futures only.
Robert

Nchrisc wrote:
>Hummm....I'm perplexed.
>
>As I recall, the Value Line was the first equity futures contract in early
>82, the S&P followed later that year.  So how were these "70s" futures cash
>tests done???
>
>NCC
>
>
>-----Original Message-----
>From: Val Clancy <valclancy@xxxxxxxxxxxxx>
>To: Clint Chastain <flag@xxxxxxxxxxxx>
>Cc: Omega-List <omega-list@xxxxxxxxxx>
>Date: Saturday, January 30, 1999 11:50 AM
>Subject: Re: cash ,,,,
>
>
>>There were studies done in 70s, 80s, 90s,
>>on what leads what, cash or futures.
>>The result always was that futures lead cash.
>>In the 70s it was up to 45 min, in 80s up to
>>15 min and in 90s up to max of 5 min ( ave of about 1 min ).
>>
>>And of course the most important consideration is that futures
>>markets were designed to serve  two primary purposes, one of
>>which is widely known and the other one is not.
>>The first purpose is a hedging mechanism ( with speculation as the other
>side of it ).
>>The second purpose is to control the cash  market. Two of those are
>actually
>>the same coin, different sides. Having high leverage and low margin cost
>>it is easy to control cash market with futures. You want to induce supply/
>>selling in the cash, you start selling SPs... and the other way around.
>>The large contract value and the make/take delivery mechanisms gave futures
>the
>>necessary weight to accomplish that.
>>Arbitrage is a side product of any dual market futures, cash or both.
>>
>>Overall the cash market ( investment pool ) was designed for one purpose:
>>to prevent hoarding of paper money by labor force and to suck that money
>>back into the system for it to work more efficiently, preventing outflow of
>>money from the system. Profit making by speculating in stocks or futures
>>or investing ( same thing ) is not the main purpose. The market/money pool
>is a zero
>>sum game ( including stocks ) and that proves the point.
>>Whoever thinks that  the market is a free market or that everything just
>>evolved by itself is a very naive human.
>>
>>
>>Clint Chastain wrote:
>>
>>> I had always assumed that cash prices followed futures prices, although I
>>> don't actively follow the futures. Seems to me that the futures would be
>the
>>> most efficient and rapid vehicle available with which to allow the pros
>to
>>> express a change in sentiment. If that is accepted as fact, then stock
>>> prices would have to quickly follow futures prices or else there would be
>>> free money - arbitrage profits - left on the table. And of course that
>>> doesn't happen.
>>>
>>> Could it be that variations in individual user reception circumstances
>are
>>> at the root of the wide variance in user perceptions of which index leads
>>> which? For example:
>>>
>>> cable vs. modem vs. satellite vs. fm
>>> fast computer vs. slow computer
>>> good eyesight vs. poor eyesight
>>> good weather vs. bad weather
>>> near of far from exchange
>>> squirrel chewing on the cable insulation on the roof of data vendor A's
>>> building vs. no squirrel on data vendor B's building.
>>>
>>> I myself dunno, just trying to understand.
>>>
>>> Clint
>>>
>>> -----Original Message-----
>>> From: Allan Havemose <havemose@xxxxxxxxxxxxx>
>>> To: Omega-List <omega-list@xxxxxxxxxx>
>>> Date: Friday, January 29, 1999 9:24 AM
>>> Subject: Re: cash ,,,,
>>>
>>> >In my experience, the most significant "feature" of SPX is that it is
>not
>>> >manipulated by the locals at the CME. I have found it worth the minute
>of
>>> >two it takes to confirm an SP move with an SPX move.
>>> >
>>
>
>