November 29, 2011 / 11:55 PM / in 6 years

Commods traders Gartman, Fisher debut risk index

NEW YORK (Reuters) - Veteran traders Dennis Gartman and Mark Fisher launched the first ever cross-asset “risk” index on Tuesday, offering traders an easy gauge for tracking the increasingly correlated ebbs and flows of global market sentiment.

The index, calculated by Dow Jones Indexes, involves long weightings in typically “riskier” assets like commodities and stocks that total 150 percent, offset by 50 percent short positions in safety plays like Treasuries and the Yen.

It lays claim to being the first index to blend a range of assets across different markets in order to reflect the overall level of “risk” in the market. The risk-on, risk-off trade has been a dominant theme for years, with prices often moving in sync as cross-asset traders lurch between hope and despair.

“The Fisher-Gartman Risk Index consists of a mix of long and short positions in various asset classes whose overall value is expected to rise when the outlook on markets and the broader economy is positive and to decrease when such outlook is negative,” they said in a statement.

The long portion of the index is 48 percent crude oil and products, 46 percent equities and 18 percent agriculture. Its short components are 34 percent sovereign bonds, as well as the yen and Swiss franc.

Fisher is a famed figure on the commodity trading floors of New York, where he made his mark as an oil and natural gas trader for three decades. He moved up to run his own futures commission merchant, MBF Clearing Corp.

Gartman, whose advice in the daily Gartman Letter is widely followed across markets, cut his teeth in the cotton industry in the 1970s before moving on to trade financial contracts on the Chicago Board of Trade.

Reporting by Jonathan Leff; Editing by David Gregorio

Our Standards:The Thomson Reuters Trust Principles.
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