ETNs versus Currency ETFs

Which are better for investors - ETNs or currency ETFs? This depends on two factors: taxes, and what's in the ETF/ETN.

Here's an awesome article from seekingalpha.

Also check this out from the awesome Edgar archives relating to a Series A MTN issued by Barclays for the "Intelligent Carry Index" (TM).

Also see the macro trader website.

New asset class? Here's another one of those "ETNs". What gives though? How is it hedged and what is hedging cost? There are many answers to this question (but perhaps only one correct one). 1 year ago Bradley Kay was analysing the possible hedging strategies. Also, what is the difference between this and inverse ETFs.

Thirdmost, this new dawn of vol-etf-dependent-on-futures-ala-UNG/USO, leads to insane tracking errors.

This stuff is like group theory (exercise:why?)

Take a look at best and worst ETFs for tracking volatility.

The Famous American Options Markets

The largest US options market is the ISE (International Securities Exchange) which offers equity, ETF and index options. ISE also offers a range of FX options, primary market maker Timber Hill. There are various levels of membership on the ISE. These range from humble exchange participant (EAMs), to primary market makers (PMMs) and competitive market makers (CMMs). A PMM is assigned to each trading "bin" plus up to 16 CMMs.

FXCMMs have similar duties to CMMs for equity and index markets. FXCMMs may only make markets in FX options. An FXCMM must purchase a license from the exchange via a "Dutch" auction process (starting with a high price that is lowered until some participant says "mine!").

Another famous US option market is the CBOE (Volatility == Opportunity).

Here you can buy:

S&P 500 Index Options (symbol SPX). European options on MAR quarterly cycle (Mar,Jun,Sep,Dec). Expiration date: Saturday following 3rd Friday of expiration month. But can only exercise on last business day before expiration. Strikes are at 5-point intervals, and 25 points for far months.

Last Trading Day:
"Trading in SPX options will ordinarily cease on the business day (usually a Thursday) preceding the day on which the exercise-settlement value is calculated."

Mini S&P Index Options (symbol XSP). European options, Mar cycle. Mini-SPX is 1/10th value of SP index. Strike price min increment is 1 point.

CBOE VIX Index. European options trade on Feb quarterly cycle (Feb, May, Aug, Nov). It is a "market estimate of expected volatility that is calculated by using real-time S&P 500Index (SPX) option bid/ask quotes".

The options trade between 8.30am and 3.15pm Central Time (Chicago time). CDT (Central Daylight time) is 1 hour behind NY. In winter CDT -> CST (central standard time).

Online FX trading via Currenex

Berkeley Online in London's Savile Row offers FX trading on Currenex. In other news, TDA takes over options broker thinkorswim.