692 Index Intercurrency spreads, 471–473 equity change and, 472–473 reasons for implementing, 471–472 Interest rate differentials, intracurrency spreads and, 473, 476 Interest rate parity theorem, 475 Interest rate ratios, intracurrency spreads and, 475 Interest rates: option premiums and, 482–483 recession and, 367 Intermarket spreads, 442, 453, 462–470 Internal trend lines, 73–78 alternate, 75 versus conventional, 74, 76–77 support and resistance and, 106 International Cocoa Agreement, 356 International Sugar Agreement, 356 In-the-money options: definition of, 480 delta values and, 485 Intracurrency spreads, 473–476 interest rate differentials and, 473, 476 interest rate ratios and, 475 Intramarket (or interdelivery) spread, 441 Intramarket stock index spreads, 461–462 Intrinsic value, of options, 489 Intuition, 586 Investment insights, 343 Japanese stock market, 22 Japanese yen (JY), intercurrency spreads and, 471 Jobs report. See Employment report Kitchen sink approach, 312 Kuwait, 1990 invasion of, 420 Last notice day, 9 Last trading day, 9 Leading Indicator myth, 171–172 Least-squares approach, 592–593, 594 Lefèvre, Edwin, 178, 570, 580–581 Lessons, trader’s diary and, 565 Leverage: negative, 320 risk and, 320 through borrowing. see Notional funding Limit days, automatic trading systems and, 296 financial markets and, 13–14 general observations on, 13–15 sell hedge, 11–12 Heteroscedasticity, 672–673 Hidden risk, 320 Hildreth-Lu procedure, 671 Hite, Larry, 585 Hog production: fundamentals and, 348, 350, 356 regression analysis and, 374, 589–591 regression equation and, 633 supply-demand analysis and, 360, 365 Hope, as four-letter word, 584 Housing market: Case-Shiller Home Price Index, 423 housing bubble, 2003-2006, 423, 425 Implied volatility, 483–484 Incorporation of demand: demand change, growth pattern in, 368 demand-influencing variables, identification of, 368–370 highly inelastic demand (and supply elastic relative to demand), 370–371 methods for, 367–371 need for, 366–367 stable demand, 368 Independence, 579 Independent variables: forecasting model, building, 415 multicollinearity and, 665 regression analysis and, 677, 679 Index models, 376–377 Individual contract series, 279–280 Inflation: adjustments, 355 price data for, 414 price-forecasting models and, 383–388 Inflationary boom, 422 Inflation indexes, 383 Information, viewing old as new , 349–350 Intelligence, 582–583 Intercommodity spreads, 441–442. See also Limited- risk spread about, 441–442 contract ratios and, 453–460 Intercrop spreads, 441, 460 Hedging (continued)