PMSC Policy Management Mfg. software systems 16 Shearson;
a units of 1 common + 1 warrant.
Initial public offerings sold at $1 or less not included. Issues without underwriters not included. First aftermarket bid is approximate.
Offering data sources: GOING PUBLIC: The IPO Reporter, 1528. Walnut St., Philadelphia, PA 19102; The Institute for Econometric Research Inc., 3471 N. Federal Highway, Ft. Lauderdale, FL 33306.
Wall Streeters looking for "action" used to place their wagers overseas. London bookies offered betting spreads on the Dow Jones Industrial Average each month, while in Amsterdam a financial firm sold futures contracts on the Dow. Now, with futures contracts on a variety of stock market averages being traded or about to be introduced on our own shores, a gambler can legitimately work the stock market from the comfort of a desk. Given the listlessness that has characterized the roster of individual equities over the last year or so, the prospect of making fast and dramatic profits, simply by guessing right about the direction the overall market will take, has quickened the pulses of many otherwise bored professionals. The public, too, may see such contracts as get-rich-quick opportunities. But, like any dealings in futures, the game is perilous if played by novices.
That it's out-and-out speculation can hardly be denied, though to some degree such contracts can be utilized in hedging stock market positions (but so can options and short-selling). Unlike owners of commodity futures, the ultimate holder gets nothing when the contract expires. At least in the Dutch version, which was written on a DJI -- indexed mutual fund, you received shares in the fund on expiration. The way they're being set up in the United States, however, the contracts are "cashed out" at a profit or loss to the holder when they expire. They can't be used to accept spot delivery, and thus all the more constitute a simple roll of the dice. Further, aside from their hedging value and the few clerical jobs created, they are an entirely functionless application of capital. The highly margined money is invested in nothing except an abstract statistic.
Still, the idea is fascinating, and bears more than passing notice by investors with a sense of adventure. In February the federal Commodity Futures Trading Commission approved the contracts of the Kansas City Board of Trade. Those of the New York Futures Exchange, the Chicago Board of Trade, and the Chicago Mercantile Exchange were expected to be passed shortly. Each is pegged to a stock market average (though none to the Dow; Dow Jones did not give its approval). Kansas City is writing one contract based on the Value Line Composite Average. The contract will be worth 500 times that index (for example, at 128 a contract would cost $64,000). The New York Futures Exchange will be based on the New York Stock Exchange Index, plus each of its four components -- industrials, utilities, financial, and transportation. Chicago Mercantile's will be similarly based on the Standard & Poor's 500. Most intriguing of all will be the Chicago Board of Trade's offerings. Ten refer to a portfolio made up of 100 shares of five corporations in each of 10 industrial categories -- automobiles, airlines, banking, chemicals, drugs, office equipment, petroleum, photo-optics, retail, and telecommunications. This proprietary pie-slicing enables investors to aim at particular facets of the market, including fast-growth companies. But you don't get to go to a stage show when you lose.