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Well, if the futures conformed to current regulations, "insider trading"
*would* be legal, and might even serve to offload the burdens (regulatory
and administrative) that currently occur on plain old stock.
Might even be MORE cost effective for the SEC and CFTC than what's currently
in place.
Dick Crotinger
----- Original Message -----
From: Daniel Goncharoff <Daniel.Goncharoff@xxxxxxxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, March 03, 2000 9:40 AM
Subject: [RT] Re: Stock futures.
> Can anyone explain why you would even consider single stock futures
instead of
> just loosening margin requirements and eliminating the uptick rule? Plus
consider
> the administrative burden introduced to monitor insider trading, front
running,
> etc. in both the futures and the stocks at the same time (of course, we
have that
> same burden for options now, so it IS managable).
>
> Regards
> DanG
>
> I4Lothian@xxxxxxx wrote:
>
> > We already have single stock futures here, they are called synthetic
futures
> > by buying a put and selling a call at the same strike on the options on
a
> > stock, or visa versa.
> >
> > Thus, you can effectively use futures-like equivalent to hedge or trade
> > stock, but it is costly and cumbersome. The time is now to change the
laws
> > and open the U.S. markets to innovation before some offshore non-U.S.
> > exchange creates the market and attracts the volume.
> >
> > I believe single stock futures would attract additional volume to stocks
and
> > create additional arbitrage opportunities which will only help liquidity
in
> > the underlying stocks. Combine that with a central time price order
book for
> > stocks and I think you have some efficient markets and an up to date
> > regulatory structure in the making.
> >
> > Regards,
> >
> > John J. Lothian
> >
> > Disclosure: Futures trading involves financial risk, lots of it!
>
>
>
>
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