Volatile futures

Press, 18 December 1986, Page 38

Volatile futures

Trading was extremely volatile in wool, Government stock (GSK) and bank-ac-cepted bills (BAB) on the New Zealand Futures Exchange yesterday, in spite of a quiet kiwi dollar.

Mr Geoff McDonnell, the manager of Mair Astley Futures, said that traders had expected the GSK contract to start off at 8300 yesterday, judging by trading late on Tuesday, but they opened at 8285.

The contract then dropped to 8273, before coming back later in the day to close at 8299, after touching a high of 8300.

In spite of the yields on five-year Government stock rising in the secondary market, there had been a change in sentiment, with traders picking a rate of 17 per cent in March.

This meant that there was a 0.75 per cent premium between futures and the actual secondary market price, an indication of the changing sentiment.

The BAB contract was also extremely volatile as call rates climbed to 25 per cent, which flowed into other short-term bills, he said. There was an 110 point trading range, or a position change of $llOO. Trading fluctuated in relation to the money market. Wool started off weaker, but the stronger prices at yesterday’s auction in Christchurch helped futures finish near their highs. “Conjecture is that if the prices are seen to be even or slightly weaker in tomorrow's auction then futures prices in the near months have peaked and it is time to open short positions,” Mr McDonnell said. The U.S. dollar futures contract was quiet along with the kiwi dollar. Details of yesterday’s tradine were: JUS CONTRACTS Mth Open H/L Last Vol Jan 1.9600 9655/9590 9650 53 Contracts traded: 53. Open positions at Dec 16: Jan 452, Feb 10, Mar 15, total 477 (up 7). COMMERCIAL BILLS

Sep 8100 100/100 100 4 Dec 8150 150/150 150 5 Mar 8175 175/175 175 7 Contracts traded: 18. Open positions at Dec 16: Jan 6, Feb 5, Mar 378, Jun 124, Sep 47, Dec 45, Mar 46, Jun 10, total 661 (down 3). GOVERNMENT STOCK Mth Open H/L Last Vol Mar 8285 300/271 299 1225 Contracts traded: 1225. Open positions at Dec 16: Jan 8, Mar 2370, total 2378 (up 166). WOOL FUTURES

May 620 625/620 625 7 Contracts traded: 188. Open positions at Dec. 16: Dec 27, Jan 134, Mar 416, May 504, Aug 221, Oct 193, Dec 141, Jan 210, Mar 201, May 99, total 2146 (up 7). WHEAT FUTURES Mth Open H/L Last Vol Feb 215 215/215 215 4 Contracts traded: 4. Open positions at Dec 16: Feb 13, Mar 25, May 18, total 56 (down 2). 90-DAY BANK BILLS

Contracts traded: 299. Open positions at Dec 16: Jan 576, Feb 13, Mar 105, Jun 19, Sep 14, Dec 19, Mar 19, Jun 20, Sep 20, Dec 20, total 825 (up 101).

Mth Open H/L Last Vol Mar 7750 750/750 750 1 Jun 8100 100/100 100 1

Mth Open H/L Last Vol Dec 585 585/585 585 8 Jan 590 590/590 590 1 Mar 580 592/580 592 71 May 595 605/590 605 32 Aug 603 618/603 618 27 Oct 605 618/605 618 21 Dec 611 620/611 620 10 Jan 605 625/605 625 10 Mar 615 615/615 615 1

Mth Open H/L Last Vol Jan 7715 810/700 783 240 Feb 7850 900/850 900 24 Mar 7950 8000/7900 8000 13 Jun 8100 160/100 160 6 Sep 8100 100/100 100 2 Dec 8150 160/150 160 7 Mar 8175 185/175 185 7