Zachary Scheidt

The Proposal to Limit Commodity Positions Will Hurt Free Markets and Economic Growth

well obviously this is a highly debated topic and I'm glad we could discuss in a (somewhat) orderly fashion.

We talk about the "real" market as if there were two different forces at work. In actuality, the market is made up of buyers and sellers - plain and simple. The oil market is just too big and fluid for anyone to "corner" or artificially move prices to any significant degree. Producers and consumers need speculators to offer liquidity. If the price is "artificially" high, you will see speculators "regulate" the market by selling. And I don't hear anyone complaining about prices being too low in the early part of this year.

One thing that always drives me nuts is that Goldman gets so much criticism even though they are a publicly traded company... Sure, their executives and traders are richly rewarded. But so are their shareholders. And who are these shareholders? The Investing Public! If you're jealous of the profits Goldman is booking - go buy their stock! Then they can be YOUR profits.

For whatever it's worth, and as an aside note, I may pull in six figures, but that only happens when I'm providing seven for my investors. I'm a big fan of the "eat what you kill" setup which is why I have my own company and live and die by my ability to keep my clients happy. It's more risky, yes - but then so is counting on an employing firm to stay in business and continue making payroll...

I appreciate the spirited debate, and I'm sure I'll get dinged on the "positive / negative" comments for this one, but honestly I can't make an argument against a freely operating market. Manipulation by the Government, Goldman Sachs, LTCM, or any other institution should be fought. Unfortunately, few see this move towards stiffer regulation as the manipulation that it truly is.

Zach
zachstocks.com

Energy Regulation Weighs on U.S. Exchanges

Donzoab - Do you really think this is an issue of price manipulation? Or is it simply many participants all seeing the writing on the wall and putting themselves in a position to profit? Either way, if the price moves too far in one direction, astute traders should be able to take the opposite side and benefit from recognizing mis-pricing. Price manipulation is certainly unethical. But trading for profits in volatile markets is simply part of our capitalistic society.

Sure Andy, I think there are definite problems with Efficient Market Hypothesis. But inefficient markets simply give us as traders an opportunity to profit from recognizing and trading based on incorrect price points. Saying that markets are not efficient and so therefore must be manipulated by the government is NOT a good solution. That just creates MORE inefficiencies.

zachstocks.com

CME Group: Our Future Could Be in 'Futures'

I like your analysis on the option opportunities. Furthermore, CME should be a strong name once the fear of counterparty risk begins to abate. Since CME acts as a clearinghouse, they could have to step up and make good on trades where a third party defaults. But as markets settle down and the company's risk measures prove solid, the stock should get a better multiple.

I wonder if it makes sense to sell the $225 calls instead - would create more cash outlay, but also increases your reward.

Best in 2009!
Zach
zachstocks.com

ICE Chairman and CEO Saves Face On CME Deal

I found it pretty amazing that the company spent $10.9 million in this endeavor. Still after all that, ICE seems to be on a roll and looking for the next opportunity. I'm impressed with their pricing power and ability to expand their business with or without additional acquisitions.

ICE Lands Russell Contract, Possible Leg Up In CBOT Bidding War

ICE has been working very hard to convince BOT to view it as a strong player in the derivatives markets. While I think CME will eventually win the bidding war, this contracts continues to cement ICE's position as a strong stand alone company as well as an attractive takeover candidate