May be volatile this morning

[Sean K]

For your info:


DJ SFE Warns Of Price Volatility On Australian Share Market
20/09/2007 08:55AM AEST

SYDNEY (Dow Jones)--The Sydney Futures Exchange, part of ASX Ltd. (ASX.AU), warned late Wednesday that the expiry of the September SPI 200 index futures contract could cause "unexpected levels of price volatility" when the Australian share market opens Thursday.

In a statement, the SFE said circumstances particular to the September contract have led to large futures positions being accumulated.

"Traders have advised that they may seek to reduce their exposures by permitting futures positions to expire and by trading out of physical equities during the opening auction on the day of expiry," it said.

"As a result, SFE wishes to advise traders that the aforementioned market operations have the potential to lead to a much larger level of liquidity being provided in physical equity transactions during Thursday's ASX opening price auction than is usually the case.

"This could lead to unexpected levels of price volatility - traders who are unwilling to accept this price risk may look to exit positions before this," it said.

September futures expire at 0200 GMT.

The S&P/ASX 200 index last traded at 6356.1 points.

 

[Sean K]

1159 [Dow Jones] Investors to watch Aussie market opening closely after SFE warns September contract expiry will lead to volatile opening. A number of stories circulating about large futures positions, some traders saying Future Fund could be behind buying of Sept contracts. Replaces early talk that position was held by one large investment bank. "It's the Future Fund," says senior institutional trader. "They bought A$4 billion of Sept SPI futures and are swaping into equities." However, others more skeptical on Future Fund's presence. Future Fund spokesman declines to comment, says it doesn't comment on its investment activities. SFE spokesman also plays down idea of one large position. "It would be wrong to say it is any one paricipant it is more larger than normal open interest across the market," spokesman says. Points to exceptional circumstances this month associated with recent market volatility associated with global liquidity crisis. (DWR, LMF)