Futures Trading

Gasoline prices are keeping up their record-setting ways. California drivers paid an average of $4.358 for a gallon of regular gasoline, up 6.6 cents from a week earlier, the Energy Department said Monday. That's a fresh record high for this time of year and is 48.4 cents above the year-earlier price. Nationally, the average rose 7.2 cents to $3.793, also a record for this week, according to Energy Department statistics. A year earlier, the average U.S. price was 27.3 cents lower.

Get ready to pay $4 a gallon or more for gasoline this spring, with possible records close to $5 over the Memorial Day weekend, analysts said. "Motorists who drive a SUV may want to consider calling their banking institution and obtain a credit-limit increase so they can afford this summer's fuel expenses," quipped Patrick DeHaan, senior petroleum analyst for GasBuddy.com. Look for a springtime U.S. average of $4.05 for a gallon of self-serve regular gasoline, said Tom Kloza, chief oil analyst for the Oil Price Information Service.

Are Californians bigger risk takers than investors in other parts of the country? It appears so when it comes to futures trading. The state is home to the largest number of individual speculators who are, in effect, betting on the future price of anything from Treasury bonds to pork bellies, according to brokers. "There are more speculators out here," said Lee R. Brooks, first vice president and manager of the futures department at Bateman Eichler, Hill Richards.

Iowa caucus-goers will deliver their verdict on their preferred Republican presidential nominee Tuesday night, but traders on the political futures site Intrade already are weighing in -- and their bet is on Mitt Romney for Iowa and the overall party nomination. The former Massachusetts governor, who polls show is in a three-way race to capture the party's first presidential nominating contest, has a 47.6% chance of winning the Iowa caucuses, according to Intrade. That's well ahead of the other top two contenders: Rep. Ron Paul is at 29.8% and former Sen. Rick Santorum at 22.9%.

The Commodity Futures Trading Commission has approved trading in options on gold, silver, lumber and other certain non-farm physical commodities by a 4 to 0 vote, as well as permanent trading in options on agricultural futures contracts. The commission's vote culminates a three-year pilot program in which the panel progressively reopened trading in options on both farm and non-farm futures contracts.

Chicago's commodity markets said Friday that they will test their proposed global electronic futures-trading system next month though they still lack enough commitments from other exchanges to make it a reality. The Chicago Mercantile Exchange and Chicago Board of Trade hope to begin operating the long-delayed Globex system around the middle of this year, Board of Trade Chairman William O'Connor told traders and brokers at the Futures Industry Assn.'s annual meeting in Boca Raton.

The California Department of Corporations and the federal Commodity Futures Trading Commission on Wednesday jointly raided two businesses alleged to be selling gold, silver and currency futures without proper registration. The targets, Lida International Financial Data in San Gabriel and Worth Financial Data in San Francisco, were barred from doing business under a state administrative action, pending a federal court hearing.

Congress is considering far-reaching proposals to shore up public confidence in U.S. future markets, rocked by allegations of cheating, the chairman of the Senate Agriculture Committee said Thursday. The proposals include adding muscle to the federal agency that monitors futures exchanges, curbing some trade practices and requiring markets to track trading activity more closely. Democratic Sen. Patrick Leahy of Vermont told Wendy L.

A glitch in MCI WorldCom Inc.'s data-transmission network has partially disabled thousands of automated teller machines and restricted market trading of corn, soybeans and other financial futures. The problem at the No. 2 U.S. long-distance carrier began late last week during a system upgrade and has disrupted high-speed data service for nearly 30% of MCI's global data-network customers, spokeswoman Linda Laughlin said Tuesday.

If this week's indictments of 46 Chicago commodities traders have you scared about futures markets, you're not alone. Even without the scandal, it is risky territory. At least four of five individual investors who dabble in futures lose money--and that's assuming their trades are handled properly, as is the case most of the time, since most brokers are honest.

U.S. regulators launched one of the biggest ever crackdowns on oil price manipulation Tuesday, suing two well-known traders and two trading firms owned by Norwegian billionaire John Fredriksen for allegedly making $50 million by squeezing markets in 2008. The Commodity Futures Trading Commission said traders James Dyer of Oklahoma's Parnon Energy and Nick Wildgoose of Europe-based Arcadia Energy amassed large physical positions at a key U.S. trading hub to create the impression of tight supplies that would boost oil prices.

A proposed ban on box-office futures markets has survived a marathon House-Senate negotiation over the financial reform package that Congress is likely to pass next week. The provision, which was inserted after lobbying by the Motion Picture Assn. of America and others on behalf of the six major movie studios, would make box-office results only the second commodity on which futures trading is banned by law. The other is onions. Language banning box-office futures trading was included in the version of the financial reform package passed by the Senate, but not the House, leading to questions over whether it would appear in the final bill.

Despite opposition from the major Hollywood studios, federal regulators voted 3 to 2 on Monday to approve an investment vehicle that will allow professional traders to bet on the ticket sales that a movie generates during its opening weekend. The company that proposed the vehicle, Veriana, already won approval from the Commodity Futures Trading Commission for the exchange on which these contracts will be traded — the Trend Exchange — but it needed the commission to sign off on a contract to allow traders to begin placing positions.

The Commodity Futures Trading Commission has filed civil charges against two Southern California men, alleging that they ran a multimillion-dollar Ponzi scheme that targeted Latinos, the commission announced Monday. Acting at the request of the commodities agency, U.S. District Judge Percy Anderson last week froze the assets of Ruben Gonzalez of West Covina and Jose C. Naranjo of La Mirada and their company, New Golden Investment Group. The defendants and the company could not be reached for comment.

After losing a major regulatory battle over proposed box office futures markets, the major movie studios are going to Congress. Financial reform legislation unveiled Friday by Sen. Blanche Lincoln (D-Ark.) contains a provision that would ban futures trading based on box office receipts. The move came the same day that the Commodity Futures Trading Commission unanimously approved the creation of one of two proposed markets that backers say would allow movie studios and financiers to hedge the risk of their investments in motion pictures.

Gold and other precious metals soared again Wednesday amid a buying stampede. Near-term gold futures in New York jumped $13.90, or 1.4%, to finish the session at $1,018.90 an ounce, a record closing high. Silver rocketed 43 cents, or 2.5%, to $17.41 an ounce; platinum gained $29.80, or 2.3%, to close at $1,350.10. "It's really a feeding frenzy," said Larry Young, senior trader at Infinity Futures in Chicago. Gold is up 7.1% so far this month, beating the 4.7% advance in the Standard & Poor's 500 stock index.

The Chicago Mercantile Exchange, in the face of an FBI fraud investigation, won federal approval Thursday to launch the nation's first electronic network for futures contract trading, which will be used initially for overnight trading in the United States but could eventually be expanded to operate worldwide.

The White House has portrayed the commodities market trading that netted First Lady Hillary Rodham Clinton almost $100,000 in a two-year period as a case of an ordinary small investor who took her chances and came up a winner with shrewd judgment and a little guidance from an experienced friend. But experts and officials in the volatile futures trading industry said Wednesday that what she did would be highly unusual for the average small investor to pull off successfully.

Gold fever is back. The question is: For how long? The precious metal leaped above $1,000 an ounce Friday and stayed in four-digit territory, closing at record highs. The steady ascent of gold in recent months -- it is up more than 15% since April -- partly reflects a simultaneous slide in the value of the dollar against other currencies, analysts say. Some gold buyers are also worried about inflation and are skeptical about the ability of any currency to hold its value as they nervously watch the world's central banks flood the financial system with money.

The road to reforming financial regulations winds through the cornfields, hog farms and cattle ranches of America's heartland, and that complicates the Obama administration's already arduous effort to revamp oversight of Wall Street. Lawmakers from Iowa, Minnesota, Oklahoma and other farm-belt states who sit on the congressional agriculture committees have a surprisingly influential role in the administration's proposed overhaul, which Congress resumes debating Tuesday after its summer recess.