Futures Found Overseas

 

INC. is in error in the statement "The first-ever stock index futures contract was introduced to public trading by the Kansas City Board of Trade on February 24, 1982," which appeared in "Take Stock in the Futures" (Personal Finance, September 1982).

Forward Contract Exchange Co. Ltd., a subsidiary of Arthur Lipper Corp., created and developed the business of stock market index futures in Amsterdam in 1973 Further, Arthur Lipper Corp. assisted the Kansas City Board in the development of its Value Line contract. We also were the firm that proposed stock index trading to the Chicago Mercantile Exchange in 1976, and we have consuIted with the New York Futures Exchange staff on its index contract.

Stock market average or index futures will become a major part of the investment scene over the course of the next few years, probably through the use of options on the futures. In all probability, individual speculators will lose and professional investors will make money using these highly leveraged instruments.

EDITOR-NOTE:

Mr Lipper is correct. The article failed to consider the previous existence of several overseas index-oriented vehicles. Some weren't true futures contracts, in that basically they were mutual funds that owned shares in, for example, only the 30 Dow Industrials, appropriately weighted. The Forward Contract Exchange Co.'s contracts were bona fide futures, and thus did anticipate Kansas City's. However, these contracts were limited to non-U.S. financial institutions. INC. should have said that the Kansas City contract was the first available to the U.S. public.