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Monthly Archives: January 2016

A Letter from Your Society President – January

19th January, 2016 · Joshua M. Howard, CFA · Leave a comment
Joshua M. Howard, CFA

The holidays are behind us and the busyness of life has returned for most of us. The same is true for the CFA Society, as we have a number of events on the calendar over the next few weeks. Most importantly we have our signature event of the year next week, the Annual Economic Dinner. This year’s guest speaker is Michael Pettis, a China expert who currently works and writes in Beijing. There are still tickets available and I encourage you to attend if you are able to. In addition to the dinner our calendar is full of other programming as well, including lunches, happy hours and career support, which you can access here Events Calendar.

Also, in case you missed it in December, we have released our Society Annual report and the annual Compensation Survey, which was expanded this year to include many cities in the Midwest. I encourage you to read both. Our Annual report contains our financial statement for the most recent fiscal year, among other information, and as dues paying members I hope you will take the time to review our sources of revenue and how we spend your dues. Less than 30% of our revenue comes from your member dues, though it is still the single largest source of our receipts. We spend just under half of our total revenue on staff, administration and board expenses, with the majority of our expense going directly toward programming and education for our members. The Board takes its fiscal responsibility seriously, and we attempt to offer the highest quality programming to our members while limiting increases to dues and event fees. If you have any questions about our financials please let me know.

The compensation survey is also a valuable resource, whether you are looking for a job, attempting to hire someone or moving to a different part of the region. A special thanks to all who responded to the survey, and to our Advocacy Committee for their work on collecting and analyzing this information. As always, please contact me with any questions. I look forward to seeing many of you at the Economic Dinner next week.

Joshua M. Howard, CFA
President, CFA Society Minnesota

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Posted in Local Charterholders | Tags: 2015 Compensation Survey, 2015 Midwest Compensation Survey, Annual Report, Josh Howard, President's Letter, Society events, Society President |

Developments in Volatility & Option Markets – Event Recap

18th January, 2016 · CFAMNEB · Leave a comment

by Steve Dixon, CFA

On January 12, 2016, Mr. Russell Rhoades from The Options Institute shared his insights and observations on the options market with Society members and other event attendees.  The discussion centered around the innovation of Weeklys just a few years ago and the proliferation of more frequent settlement of stock and index options that has resulted.  Weeklys are now available on about 350 stocks and about 70 ETFs.  Still, Mr. Rhoades was puzzled by the relatively slow uptake by institutions to utilize options contracts that settle each week compared to the traditional monthly settled contracts.  Outside of the institutional realm, trading in Weeklys has been the source of growth of the CBOE over the past several years.

Mr. Rhoades spent time explaining the opportunity inherent in selling at-the-money options with a week or less to expiration to capture the time decay of the contract premium.  This time value, which erodes gradually during much of the contract’s life, accelerates toward zero in the final few days to expiration thereby providing the sweet spot for traders looking to capture the natural decay of part of the contract’s value.  This acceleration isn’t as prevalent for contracts trading in-the-money.

The discussion turned to VIX, as all do these days.  Weeklys on VIX were introduced about six months ago and seem to provide the closest replication of VIX that is possible at present.  In a graphical display, Mr. Rhoades showed the overlay of a VIX Weekly contract over the final five trading days to expiration with the index itself.  The two moved very similarly even when VIX experienced sharp changes.  The mean-reverting nature of VIX provides opportunity for traders and hedgers as well.  The complication has been the effective replication of VIX, to which Mr. Rhoades believes short-dated VIX options provide the best solution to date.

Noting that “the market takes the stairs up and the elevator down”, Mr. Rhoades highlighted several indexes that the CBOE has created that pair traditional long-only positions with a variety of options strategies.  Among his favorite are the CBOE S&P 500  PutWrite Index and the CBOE S&P 500 2% OTM BuyWrite Index.  The former generating absolute and risk-adjusted returns superior to the S&P 500 Index over the past 25-plus years.  Displaying his innovative foresight, one society member suggested that the CBOE consider a 30-Delta PutWrite Index, which seemed to preoccupy Mr. Rhoades with excited anticipation for the remainder of the presentation…only at a CFA luncheon could such a sentence be written!

Mr. Rhoades was an effective presenter, drawing on CBOE trading data and personal experience to illustrate what’s new in the world of options.  Keep an eye on Russell 2000 Index options as they have been the fastest growing index option series of late and as volume improves may offer better opportunity for more effectively hedging portfolios.

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Posted in Hot Topic Commentary, Local Charterholders | Tags: CFA, CFA Minnesota, Chicago Board Options Exhcnage, Option Markets, Options Institute, Russell Rhoads, Society luncheon, Volatility |

2015 Midwest Financial Compensation Survey White Paper

4th January, 2016 · CFAMNEB · Leave a comment
2015 Midwest Financial Compensation Whitepaper 1

Click image to download white paper

CFA Society Minnesota is pleased to share with you the comprehensive findings from the 2015 Midwest Financial Compensation Survey. The data from this research provides you, and the rest of the industry, with a unique comparison of salaries, job satisfaction, and other industry trends in the financial and investment sectors across the entire Midwest region.

We’re also pleased to have expanded this year’s survey beyond Minnesota and the Dakotas to provide data for financial and investment professionals located in Illinois, Iowa, Missouri, Nebraska, Ohio, and Wisconsin. These insights deliver not only localized compensation levels and pay structure, but also aggregate-level data for your peers for the entire region. We trust you will find this information highly valuable and insightful.

To those who completed the survey, thank you for your participation and for taking the time to provide our industry with this unique market intelligence.

 

CFA Society Minnesota Results

View the CFA Society Minnesota survey results here

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Posted in Hot Topic Commentary, Local Charterholders | Tags: 2015 Compensation Survey, 2015 Midwest Compensation Survey, Compensation Survey, Illinois, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, White Paper, Wisconsin |

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