Next class November 3, 2001 in Chicago.

CBOT X-Fund Q & A
What is a CBOT® X-Fund? - It is a new CBOT® contract made up of several components (futures contracts), picked by a fund manager to move one-way over the course of a ten-day cycle. The composition of each CBOT® X-Fund contract remains fixed during its cycle, and then the manager of each fund introduces a new composite mixture.
- CBOT® X-Funds create a platform for asset activation. It generates trade by closing the normal distance between commitment and payoff. Rather than a distant projection of market hopes, the CBOT® X-Fund places trade into a positive cash flow that is already present, stable, and soon to be completed.
- CBOT® X-Funds create two distinct opportunities: 1) A designed buy-and-hold platform for the trader or customer and, 2) An attractive opening for market-making activity with arbitrage in the component markets.
What does CBOT® X-Funds do? - Transforms the platform for trading from random to nonrandom behavior.
- Has a strong tendency to finish higher [at expiration] than where it started.
- Brings a single focus to components that would otherwise be incongruent.
- Has default properties that pass onward to participants a reliable basis for trading success. For example, it minimizes the need in random markets for expert timing of trade entry and exit.
What are the ways to trade a CBOT® X-Fund? - Its core support is for the long side, directional by design.
- The component mixtures present lively arbitrage opportunities.
- CBOT® X-Funds open an array of creative trading strategies that are more extensive than with the standard opportunities.
- A hedging vehicle for the flexible weighting and elimination of components.
Why does CBOT® X-Funds work? - They mute market noise by shortening price rotations. - Data imbalances are tied to time. - Continuation is heavily reinforced by contract multiplicity and short life.
What are the benefits of X-Funds? - Every CBOT® X-Fund contract traded generates multiple trades into the component futures markets.
- The CBOT® infrastructure and margining is leveraged. A better platform for attracting and activating global capital is supplied.