Chapter One: “Jobs Derivative Auctions” Or

…””Why I Was Never an Economics Major”.
“ths”, you ask, “How do you ever find this sh*t?”
Well, Grasshoppers, it’s like this. There I was, over at CNBC.com (people doing well affects my purely discretionary products’ bottom line) and there was this payroll article. Simple enough, right? I scan it and BAMMO. This jumps out at me.

…Also on Wednesday, the second of five jobs derivatives auctions had traders betting U.S. employers added 85,400 jobs in November. The first auction on the data, on Tuesday, had an implied forecast of 82,000.

“Jobs derivative auctions“? Que? Traders buy and sell the odds/amounts of job creation? WTF is that?! So, my interest piqued, I went looking. And so they do. The little primer I found even touts how ‘customers’ can hedge their ‘bets’ if they use their particular system.

…New Profit Opportunities. Trading Economic Derivatives provides customers with new profit opportunities. Previously, customers that expressed a view on an economic number using a financial instrument might forecast the number correctly but have the market react in an unpredictable fashion, leading to portfolio losses even though the customer’s view on the number was correct. With CME Economic Derivatives, customers can express a view directly on those economic statistics without basis risk: the customer profits if, and only if, the view on the economic statistic is correct.

Damn. The only thing I can comprehend completely is that there’s money to be made or lost anywhere on ANYthing.

– Seeking Gaia friendly kitchen stool covers, Bingley concludes his third ‘booze for buffalo hide’ trading session. ©TPI

One Response to “Chapter One: “Jobs Derivative Auctions” Or”

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