The real ag bull market

Discussion in 'Commodity Futures' started by Cutten, Feb 11, 2008.

  1. Cutten


    Exchange seats:

    Wish I had thought of that when I got bullish on grains a year or two ago. I'd never have expected seats to go up so much more than the underlying market.
  2. How much of the seat value gains are related to the bull market in wheat and how much is related to the expectation of an IPO or merger?
  3. Cutten


    Since they could have IPOd or been bought any time in the last few years, I'd imagine most of the gain is due to the bull market. And the higher chances of IPO/purchase are also down to the bull market too.
  4. 90% of the seat value is mutualization premium.
  5. This makes me ill. When CME went public I foresaw the exchange bull market coming. If memory serves correct those seats were about 50k then. I was illiquid at the time.

    I even tried to talk a rich relative and my boss into buying seats there and at the PHLX...nobody took the advice.

    ...liquidity is power isnt it?
  6. My family owns seats on the MGEX and it is not going up because of the bull run in wheat (although it certainly doesn't hurt the price). When we have these limit up moves everyday the exchange actually does less volume because of the limit up move. The main reasons I think seat values are going higher is because MGEX is a prime takeover bid or IPO. That is whats pushing seat prices through the roof.

    Also over 75% of the volume is traded in the pit so the seat actually means something trading wise too.

    Just my opinion on whats been going on.