Re: High Beta Index

[The Funkhousers <funkhouser@xxxxxxxx>]

Right on both counts.  Extremely valuable and now discontinued.  The 
symbol was NHB.

Originally designed to support options trading.

When the NYSE was initially competing for market share in broad index 
options they learned that options on the NYSE index were unattractive 
versus the S&P 100 because price volatility wasn't comparable.

To compete they designed the NHB which was a price index based upon the 
100 (if I recall correctly) highest beta stocks on the NYSE. 
Periodically (I believe quarterly) the list of the 100 would be updated 
to reflect the current highest 100, and the the new index would then be 
normalized to the old end of quarter value of the index.

For a while options were traded on this index for it did do what the 
designers hoped for, but sufficient liquidity never came into being and 
 options trading was discontinued.

For a while the index continued to be calculated both during the day and 
at the close.  When they finally realized that with the discontinuance 
of the options they didn't have a reason to continue they stopped.  By 
that time, however, there were a large number of traders who had 
discovered an alternate use -- A leading market indicator.  Given the 
outcry that occurred they reversed the decision until just recently, 
when they redesigned both the broad and sector indexes.  This time those 
of us which complained lost.  It's no more.

For a while I tried to "make my own" but I never could get a reasonable 
substitute, but let me assure you it was one hell of a short term 
trading tool.  Not much insight into how long a trend change would last 
but it sure was valuable in signaling when the broad market trend would 
turn.

Sorry its gone.  Made me more than a few coins, and surely help me avoid 
some otherwise expensive head fakes.

Richard Funkhouser





Gerald Marisch wrote:

An associate speaks of a past study that I think was called the HIGH BETA
INDEX ( HNB ).  He used the Index on a 15-tick "big" S&P chart and claims it
was phenomenal in identifying trend turning points.

Apparently the NYSE has discontinued this Index.  Maybe it was TOO good?

Any information on this HIGH BETA INDEX, or if its still available and from
what source, would be appreciated.

Thanks in advance for any help.

GM