CME Economic Derivatives Reception

-Gartman didn't say anything that Prediction Markets followers aren't familiar with. His overall theme was that putting money behind predictions will make them more accurate. He did share an amusing anecdote that he used the Iowa markets to get his election results info for his newletter and received many compliments for his “prescient” predictions.

-He also expressed surprise that this market has taken so long to get off the ground.

-How inside information will be handled: 1. CME rep said that the fact the market moves so much after fundamental releases is proof that the gov’t is good at keeping the number under wraps 2. If revealed early, an auction in progress would be halted but the previous ones would stand 3. If the number was revealed early but after the last auction it wouldn’t matter 4. If someone had inside info and wanted to use it the CME wouldn’t be where they would go

-The absolute number for consensus is not very important because it normally matches the Bloomberg/Reuters number. The CME advantage is that you can see the range and distribution of estimates and trade off of them.

-The auction ends 30 minutes before the number is released to give traders a chance to establish positions in other markets

-The trading has at least 120 trading firms participating

-The CME wants to expand to areas and releases that are the biggest market moves. They want to have contracts that are part of, “every day lives.”