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I had to reinstall one of these after one of the top trading brass in oil futures at Wal-mart got affected by those fake Microsoft Support scammers and they put

I had to reinstall one of these after one of the top trading brass in oil futures at Wal-mart got affected by those fake Microsoft Support scammers and they put the boot lock on his computer. It's a pain to set up, but it's authentication is unbelievable. It has something like triple factor authentication plus biometrics. To get him logged in to test it so I could make sure it spread across his 5 monitors correctly, I had to use his RSA key + password to log in to the website, then use a physical device that reads flashes on the screen to generate another code with another password, before he finally put in another password and scanned his fingerprint on the keyboard. It was mind-boggling, but not unexpected given this dude was moving millions every day.

sbolt 7y ago
Off topic but I'm curious why Walmart employs futures traders?
- phdp 7y ago
  I imagine that, just like airlines use futures to hedge the price risk of jet fuel, they do the same for their vast logistics operation. They can lock in prices so they aren’t suddenly facing a massive bill if gas goes way up.
  - sbolt 7y ago
    That makes a lot of sense, their logistics operation is massive!
  - formercoder 7y ago
    Interestingly airlines are divided on hedging and not all participate in it https://www.eurofinance.com/news/airlines-divided-on-hedge-benefits-as-oil-volatility-surges/ https://www.eurofinance.com/news/airlines-divided-on-hedge-b...
    - selectodude 7y ago
      You can make an indirect bet on oil futures by trading airline stocks. Southwest Airlines (LUV) if it's going up, American Airlines (AAL) if it's going down.
    - refurb 7y ago
      Fascinating article! To hedge or not to hedge basically comes down to US versus EU accounting rules.
    - joosters 7y ago
      Hedging is extremely odd in that while it is thought of as a way to lock in 'certainty' on the price of something, it really is just another way of gambling on a price. In the case of airlines, they are effectively 'short' oil, in that they profit if the price of oil falls, and lose if the price rises. So the usual story is that it makes sense to hedge their oil costs. They can do this in three main ways: 1) Buy oil forward. They get to lock in the price of oil at a future time. If oil prices rise, they win. But if oil prices fall, they lose out, since competitors can now buy oil more cheaply. 2) Buy a call option on oil. They get the right to buy oil at a fixed price at a future time. If oil prices rise, they can exercise the option, and win. If oil prices fall, they can just take the cheaper price => another win. But the option itself has a cost, so if oil prices don't change much, they lose out since they had to eat the cost of buying the option. 3) Sell a put option on oil. This is the airline being paid by someone for the option to sell them oil at a fixed price at a future time. In this case, the airline wins if oil prices don't move too much in any direction (since they get paid for the put option). If oil falls in price, they will have to buy it at the higher price => they lose. If the oil price rises, they also lose since the costs have risen. Yet, in all cases, after hedging, the airline will still either win or lose depending upon the change in oil price. No certainty has been gained. The choice whether to hedge or not is really down to game theory. What matters is not just whether/how your airline hedges, but what your competitors do.
      - elemeno 7y ago
        > Yet, in all cases, after hedging, the airline will still either win or lose depending upon the change in oil price. No certainty has been gained. That’s not really true. You’re locking in the price that you’re going to pay - that’s the certainty. You might however not be getting the best price at that point in time. From a financial forecasting perspective it probably worthwhile trade off though as you’re fixing one of your costs for that time period and that’s useful even when sub optimal.
  - namdnay 7y ago
    I think the difference is that by the time an airline is buying fuel, they have already sold the tickets at a certain price. So hedging makes sense. That’s not the case with Walmart for produce - if tomatoes are more expensive to buy they can just sell them for more. The only things for which it makes sense are those that aren’t sold back, eg the fuel for their fleet of trucks etc
    - refurb 7y ago
      Grocery prices are highly elastic. Yes, if gas prices doubled, Walmart could increase the price of their products, but consumers would likely buy a lot less, and Walmart sales would suffer. Walmart’s focus is on “low, everyday prices”, and future can help maintain those.
      - ikeboy 7y ago
        There is absolutely no more reason to keep prices low if you've made a profit independently on futures than if you haven't. Your marginal cost goes up in both cases. If you're optimising profits, you should make the same decision in both cases regardless of if you bought futures.
        refurb 7y ago
        Your marginal costs don't go up in both cases. If you have futures to buy diesel at $2.50/gal and the diesel price skyrockets to $4.00/gal, you can keep your prices the same. If you didn't have futures you couldn't without taking a loss.
        ikeboy 7y ago
        This is incorrect. If you have futures, your marginal cost is still $4, since now you're using an additional gallon instead of selling it at market price at $4.
        refurb 7y ago
  - xerox13ster 7y ago
    Not just fuel for their logistics, but also selling gasoline in their Wal-Mart brand gas stations near their stores, Neighborhood markets, and Sam's Club. They ditched Murphy USA a few years back for much of this fuel and began sourcing it themselves. It's a way to ensure those prices are the lowest they can reasonably offer and still turn a profit.
- SllX 7y ago
  Probably price insulation. In San Francisco, depending on where you go right now, tomatoes might be $20 a case or they might be $40 a case. Why is any place selling them for $40 a case? I honestly couldn’t tell you other than there was probably a problem somewhere with the tomato crop. But if you’re able to get them for $20 a case right now, it’s because that store was able to get them for a good price, and that means somewhere upstream in the supply chain, a futures contract was exchanged which made that possible by locking in the purchase price in advance for this batch of tomatoes. This is often the case with avocados which might sell for $0.50 a piece in one place or up to $3 a piece in another. Anything can affect the price, up to and including cartels in Mexico demanding protection money from Avocado farmers recently, but pests, weather, soil problems, or whatever might limit the supply and lead to price increases. Walmart, being Walmart which isn’t unlike being Costco or any other major supermarket of sorts where people buy food, would want to limit their exposure to shocks in the market regardless of what’s causing the shocks. So they would need to employ futures traders in order to accomplish this. Even if they lose money on some contracts, they’re probably making money on enough of them to keep their prices low when you go there to buy tomatoes, avocados, lettuce, spinach, meat, poultry, or whatever. Nobody is happy when the price of tomatoes suddenly doubles almost overnight, and especially not the customer.
  - chrissnell 7y ago
    Awesome answer. Thank you for being so thorough and plain-spoken. This is a rare skill.
    - p_l 7y ago
      Technically that's the original use case of futures contracts - you pay now, and lock the price. You might lose some (due to prices falling down, supply not fulfilling the contract) or win some (due to issues in supply, prices going up, etc.). On the other hand, the supplier gets money now, not some time in the future (like after harvest) and this provides a different kind of cash flow that doesn't invoke debt (usually). And then there's trading on the contracts all around, trying to get best prices :)
  - appleiigs 7y ago
- paggle 7y ago
  The core reason futures exist is to allow you to maintain more stable pricing of the products you sell, in the face of price instability in the products you buy. Let’s say you’re Pizza Hut and you want to run a Super Bowl ad advertising $5 pizzas for a month. But then a tomato sauce recipe goes viral in China and the price of tomatoes goes up 2x. Now your promotion might be costing you a lot more than you had planned. With futures you can buy the tomatoes today, to be delivered later, the farmer can get his money now and you van lock in your price now, insulated against increases in prices (with the farmer insulated against decreases).
- mrlala 7y ago
  Off topic on topic but futures trading is pretty much the most useful actual trading out there. One can argue people are gambling (otherwise known as "investing") almost 99% of the time with trading.. but futures can actually be used for mutual gain. You are a corn grower and want to lock in a price 6 months from now. You are someone who buys a lot of corn and want to lock in the price 6 months from now. Futures allow you in essence to meet up in a highly liquid exchange where you can lock in those prices for the buyer/seller. Win-win for both, because they get the price security they desired. Of course the vast majority of futures is speculative, which provides liquidity for the hedgers..
- gpresot 7y ago
  Locking the costs at a fixed amount for a fixed amount of time. This certainty allows retailers to plan promotions, discounts levels, special offers without impacting profitability. It also simplifies accounting and budgeting. Making a profit from the hedge is not really a priority (it is difficult enough for professional trading firms with full research departments at their disposal). Also, retailers (and other producers, like coffee roasters) MUST buy their raw materials quite regularly, so the profit potential of hedging tends to average out.
- TuringNYC 7y ago
  Actually, many large companies employ traders in their Treasury Group, under the CFO function. As other comments state, this is to hedge risk. Specifically, most big multinational companies have to hedge FX risk constantly. Depending on your industry, you may have specific risks (e.g. I once had a client who was a clothing manufacturer and they had a cotton futures trader on site.)
- kirykl 7y ago
  Walmart has its own fleet of trucks, possibly to hedge against oil price fluctuations
- apaprocki 7y ago
  Generally speaking most people have no idea how integrated companies are into the "global economy" in a general sense. Just pick any random international company and they have multiple jurisdictions, currencies, currency risk, commodity risk, investor relation, internal portfolios and cash management, funds. All of this for one company, now imagine all companies and all the people, data, and connectivity required to manage it.
- audiometry 7y ago
  They probably use heating oil futures to hedge their transport fleet fuel supply costs.
whatok 7y ago
The physical device (B-Unit) is typically used for remote access without the keyboard. Subsequent logins post initial setup are either through the keyboard biometrics or the B-Unit and most are using the keyboard. Normal login process is username/password + keyboard or B-Unit. They also have a standalone USB fingerprint scanner.
- Grazester 7y ago
  I came in here to explain this. I worked IT at a company closely affiliated with Bloomberg L.P. Basically everyone had a Bloomberg terminal and B-Unit. It is how we communicated with a lot of people at Bloomberg. In our stock room we had nearly every type of terminal dating back to maybe the 80's. Eventually we sent them back.
- Whinner 7y ago
  I remember the first time I saw a trader holding up his b-unit to the monitor, I thought it was some hazing ritual they were putting me through. Until that point I had only done small shop IT. It blew my mind when I realized not only was this trader really screaming at me for real, I couldn't believe that it did eventually work. Bloomberg support is amazing. Whenever I had to call them as an IT guy for a trading firm, the calls were over in about 3-5 minutes.
- mrlala 7y ago
  My most pleasant surprise was that the B-Unit for detecting the flashes worked over remote desktop. I figured however it was detecting the frequency would not translate, but it works perfect fine even over a so-so quality remote desktop connection. Sort of makes you wonder how sophisticated it really is... And this is not just once- I used it repeatedly over many years.
  - whatok 7y ago
    Yes, I primarily use mine over remote desktop for the direct line to BBG and in-house programs need more power than a laptop provides. Definitely have had to adjust contrast settings more than I would like but nature of the beast I guess.
danielmg 7y ago
The bootlock thing is easy to overcome. I had to fix a neighbour who got scammed. It is a password on the Windows registry not actually the boot but it needs to open the registry to boot. Windows backs up the registry. Just boot from a WindowsPE or live Linux USB and delete the live versions and replace with the backups. Reboot and lock is gone.
- xerox13ster 7y ago
  While true, he was paranoid enough after having been gotten that he wanted his entire machine blown away and restored what he needed from backups. It still to this day boggles my mind that he fell for it in the first place, when he handles such sensitive information.
  - exikyut 7y ago
    People are specialists in their own fields, at the cost of larger values of "everything else" than we expect. I've found that the mental model of focus is the epitome of unintuitivity (why does googling this this word only return 72 results?!). Kind of skirts at the edges of the uncanny valley, almost....
dzdt 7y ago
The primary purpose of the fingerprint scanner is to prevent password sharing. Bloomberg terminal access costs about 20,000 per seat per year. Bloomberg cares deeply that every individual who uses the system is paying for an account; shops that use Bloomberg would obviously rather share an account if they can get away with it. The fingerprint scanner makes it really hard to share an account.
- kenneth 7y ago
  I would hire a "fingerprint guy" who's entire job was to run around the office unlocking terminals. Pay him minimum wage and it's still cheaper than a couple extra terminals
  - mehhh 7y ago
    With concurrent access restrictions, this is not likely to get you far.
  - eigenvalue 7y ago
    Bloomberg sales and support is very hands on. If you work at a place that has a lot of terminals, there is usually someone from Bloomberg corporate walking around interacting with people, trying to make sure they are getting value/use from the terminals. If they noticed anything like this happening, you can be sure that the company would receive a nasty lawyer letter since they would be in violation of the user agreement that strictly forbids this.
    - raldi 7y ago
      You might think Bloomberg would be less-than-strict about enforcing this (who wants to sue their customer?) until you realize that “we’ll forgive the breach of contract if you buy accounts for everyone we caught cheating” is a very lucrative sales tool.
    - iveusedit 7y ago
      IME with a small sample of Bloomberg sales reps, they're glad to look the other way from a little funny business. They want to sheer the sheep, not skin them.

sbolt 7y ago

Off topic but I'm curious why Walmart employs futures traders?

phdp 7y ago
I imagine that, just like airlines use futures to hedge the price risk of jet fuel, they do the same for their vast logistics operation. They can lock in prices so they aren’t suddenly facing a massive bill if gas goes way up.
- sbolt 7y ago
  That makes a lot of sense, their logistics operation is massive!
- formercoder 7y ago
  Interestingly airlines are divided on hedging and not all participate in it https://www.eurofinance.com/news/airlines-divided-on-hedge-benefits-as-oil-volatility-surges/ https://www.eurofinance.com/news/airlines-divided-on-hedge-b...
  - selectodude 7y ago
    You can make an indirect bet on oil futures by trading airline stocks. Southwest Airlines (LUV) if it's going up, American Airlines (AAL) if it's going down.
  - refurb 7y ago
    Fascinating article! To hedge or not to hedge basically comes down to US versus EU accounting rules.
  - joosters 7y ago
    Hedging is extremely odd in that while it is thought of as a way to lock in 'certainty' on the price of something, it really is just another way of gambling on a price. In the case of airlines, they are effectively 'short' oil, in that they profit if the price of oil falls, and lose if the price rises. So the usual story is that it makes sense to hedge their oil costs. They can do this in three main ways: 1) Buy oil forward. They get to lock in the price of oil at a future time. If oil prices rise, they win. But if oil prices fall, they lose out, since competitors can now buy oil more cheaply. 2) Buy a call option on oil. They get the right to buy oil at a fixed price at a future time. If oil prices rise, they can exercise the option, and win. If oil prices fall, they can just take the cheaper price => another win. But the option itself has a cost, so if oil prices don't change much, they lose out since they had to eat the cost of buying the option. 3) Sell a put option on oil. This is the airline being paid by someone for the option to sell them oil at a fixed price at a future time. In this case, the airline wins if oil prices don't move too much in any direction (since they get paid for the put option). If oil falls in price, they will have to buy it at the higher price => they lose. If the oil price rises, they also lose since the costs have risen. Yet, in all cases, after hedging, the airline will still either win or lose depending upon the change in oil price. No certainty has been gained. The choice whether to hedge or not is really down to game theory. What matters is not just whether/how your airline hedges, but what your competitors do.
    - elemeno 7y ago
      > Yet, in all cases, after hedging, the airline will still either win or lose depending upon the change in oil price. No certainty has been gained. That’s not really true. You’re locking in the price that you’re going to pay - that’s the certainty. You might however not be getting the best price at that point in time. From a financial forecasting perspective it probably worthwhile trade off though as you’re fixing one of your costs for that time period and that’s useful even when sub optimal.
- namdnay 7y ago
  I think the difference is that by the time an airline is buying fuel, they have already sold the tickets at a certain price. So hedging makes sense. That’s not the case with Walmart for produce - if tomatoes are more expensive to buy they can just sell them for more. The only things for which it makes sense are those that aren’t sold back, eg the fuel for their fleet of trucks etc
  - refurb 7y ago
    Grocery prices are highly elastic. Yes, if gas prices doubled, Walmart could increase the price of their products, but consumers would likely buy a lot less, and Walmart sales would suffer. Walmart’s focus is on “low, everyday prices”, and future can help maintain those.
    - ikeboy 7y ago
      There is absolutely no more reason to keep prices low if you've made a profit independently on futures than if you haven't. Your marginal cost goes up in both cases. If you're optimising profits, you should make the same decision in both cases regardless of if you bought futures.
      - refurb 7y ago
        Your marginal costs don't go up in both cases. If you have futures to buy diesel at $2.50/gal and the diesel price skyrockets to $4.00/gal, you can keep your prices the same. If you didn't have futures you couldn't without taking a loss.
        ikeboy 7y ago
        This is incorrect. If you have futures, your marginal cost is still $4, since now you're using an additional gallon instead of selling it at market price at $4.
        refurb 7y ago
- xerox13ster 7y ago
  Not just fuel for their logistics, but also selling gasoline in their Wal-Mart brand gas stations near their stores, Neighborhood markets, and Sam's Club. They ditched Murphy USA a few years back for much of this fuel and began sourcing it themselves. It's a way to ensure those prices are the lowest they can reasonably offer and still turn a profit.
SllX 7y ago
Probably price insulation. In San Francisco, depending on where you go right now, tomatoes might be $20 a case or they might be $40 a case. Why is any place selling them for $40 a case? I honestly couldn’t tell you other than there was probably a problem somewhere with the tomato crop. But if you’re able to get them for $20 a case right now, it’s because that store was able to get them for a good price, and that means somewhere upstream in the supply chain, a futures contract was exchanged which made that possible by locking in the purchase price in advance for this batch of tomatoes. This is often the case with avocados which might sell for $0.50 a piece in one place or up to $3 a piece in another. Anything can affect the price, up to and including cartels in Mexico demanding protection money from Avocado farmers recently, but pests, weather, soil problems, or whatever might limit the supply and lead to price increases. Walmart, being Walmart which isn’t unlike being Costco or any other major supermarket of sorts where people buy food, would want to limit their exposure to shocks in the market regardless of what’s causing the shocks. So they would need to employ futures traders in order to accomplish this. Even if they lose money on some contracts, they’re probably making money on enough of them to keep their prices low when you go there to buy tomatoes, avocados, lettuce, spinach, meat, poultry, or whatever. Nobody is happy when the price of tomatoes suddenly doubles almost overnight, and especially not the customer.
- chrissnell 7y ago
  Awesome answer. Thank you for being so thorough and plain-spoken. This is a rare skill.
  - p_l 7y ago
    Technically that's the original use case of futures contracts - you pay now, and lock the price. You might lose some (due to prices falling down, supply not fulfilling the contract) or win some (due to issues in supply, prices going up, etc.). On the other hand, the supplier gets money now, not some time in the future (like after harvest) and this provides a different kind of cash flow that doesn't invoke debt (usually). And then there's trading on the contracts all around, trying to get best prices :)
- appleiigs 7y ago
paggle 7y ago
The core reason futures exist is to allow you to maintain more stable pricing of the products you sell, in the face of price instability in the products you buy. Let’s say you’re Pizza Hut and you want to run a Super Bowl ad advertising $5 pizzas for a month. But then a tomato sauce recipe goes viral in China and the price of tomatoes goes up 2x. Now your promotion might be costing you a lot more than you had planned. With futures you can buy the tomatoes today, to be delivered later, the farmer can get his money now and you van lock in your price now, insulated against increases in prices (with the farmer insulated against decreases).
mrlala 7y ago
Off topic on topic but futures trading is pretty much the most useful actual trading out there. One can argue people are gambling (otherwise known as "investing") almost 99% of the time with trading.. but futures can actually be used for mutual gain. You are a corn grower and want to lock in a price 6 months from now. You are someone who buys a lot of corn and want to lock in the price 6 months from now. Futures allow you in essence to meet up in a highly liquid exchange where you can lock in those prices for the buyer/seller. Win-win for both, because they get the price security they desired. Of course the vast majority of futures is speculative, which provides liquidity for the hedgers..
gpresot 7y ago
Locking the costs at a fixed amount for a fixed amount of time. This certainty allows retailers to plan promotions, discounts levels, special offers without impacting profitability. It also simplifies accounting and budgeting. Making a profit from the hedge is not really a priority (it is difficult enough for professional trading firms with full research departments at their disposal). Also, retailers (and other producers, like coffee roasters) MUST buy their raw materials quite regularly, so the profit potential of hedging tends to average out.
TuringNYC 7y ago
Actually, many large companies employ traders in their Treasury Group, under the CFO function. As other comments state, this is to hedge risk. Specifically, most big multinational companies have to hedge FX risk constantly. Depending on your industry, you may have specific risks (e.g. I once had a client who was a clothing manufacturer and they had a cotton futures trader on site.)
kirykl 7y ago
Walmart has its own fleet of trucks, possibly to hedge against oil price fluctuations
apaprocki 7y ago
Generally speaking most people have no idea how integrated companies are into the "global economy" in a general sense. Just pick any random international company and they have multiple jurisdictions, currencies, currency risk, commodity risk, investor relation, internal portfolios and cash management, funds. All of this for one company, now imagine all companies and all the people, data, and connectivity required to manage it.
audiometry 7y ago
They probably use heating oil futures to hedge their transport fleet fuel supply costs.

whatok 7y ago

The physical device (B-Unit) is typically used for remote access without the keyboard. Subsequent logins post initial setup are either through the keyboard biometrics or the B-Unit and most are using the keyboard. Normal login process is username/password + keyboard or B-Unit. They also have a standalone USB fingerprint scanner.

Grazester 7y ago
I came in here to explain this. I worked IT at a company closely affiliated with Bloomberg L.P. Basically everyone had a Bloomberg terminal and B-Unit. It is how we communicated with a lot of people at Bloomberg. In our stock room we had nearly every type of terminal dating back to maybe the 80's. Eventually we sent them back.
Whinner 7y ago
I remember the first time I saw a trader holding up his b-unit to the monitor, I thought it was some hazing ritual they were putting me through. Until that point I had only done small shop IT. It blew my mind when I realized not only was this trader really screaming at me for real, I couldn't believe that it did eventually work. Bloomberg support is amazing. Whenever I had to call them as an IT guy for a trading firm, the calls were over in about 3-5 minutes.
mrlala 7y ago
My most pleasant surprise was that the B-Unit for detecting the flashes worked over remote desktop. I figured however it was detecting the frequency would not translate, but it works perfect fine even over a so-so quality remote desktop connection. Sort of makes you wonder how sophisticated it really is... And this is not just once- I used it repeatedly over many years.
- whatok 7y ago
  Yes, I primarily use mine over remote desktop for the direct line to BBG and in-house programs need more power than a laptop provides. Definitely have had to adjust contrast settings more than I would like but nature of the beast I guess.

danielmg 7y ago

The bootlock thing is easy to overcome. I had to fix a neighbour who got scammed. It is a password on the Windows registry not actually the boot but it needs to open the registry to boot. Windows backs up the registry. Just boot from a WindowsPE or live Linux USB and delete the live versions and replace with the backups. Reboot and lock is gone.

xerox13ster 7y ago
While true, he was paranoid enough after having been gotten that he wanted his entire machine blown away and restored what he needed from backups. It still to this day boggles my mind that he fell for it in the first place, when he handles such sensitive information.
- exikyut 7y ago
  People are specialists in their own fields, at the cost of larger values of "everything else" than we expect. I've found that the mental model of focus is the epitome of unintuitivity (why does googling this this word only return 72 results?!). Kind of skirts at the edges of the uncanny valley, almost....

dzdt 7y ago

The primary purpose of the fingerprint scanner is to prevent password sharing. Bloomberg terminal access costs about 20,000 per seat per year. Bloomberg cares deeply that every individual who uses the system is paying for an account; shops that use Bloomberg would obviously rather share an account if they can get away with it. The fingerprint scanner makes it really hard to share an account.

kenneth 7y ago
I would hire a "fingerprint guy" who's entire job was to run around the office unlocking terminals. Pay him minimum wage and it's still cheaper than a couple extra terminals
- mehhh 7y ago
  With concurrent access restrictions, this is not likely to get you far.
- eigenvalue 7y ago
  Bloomberg sales and support is very hands on. If you work at a place that has a lot of terminals, there is usually someone from Bloomberg corporate walking around interacting with people, trying to make sure they are getting value/use from the terminals. If they noticed anything like this happening, you can be sure that the company would receive a nasty lawyer letter since they would be in violation of the user agreement that strictly forbids this.
  - raldi 7y ago
    You might think Bloomberg would be less-than-strict about enforcing this (who wants to sue their customer?) until you realize that “we’ll forgive the breach of contract if you buy accounts for everyone we caught cheating” is a very lucrative sales tool.
  - iveusedit 7y ago
    IME with a small sample of Bloomberg sales reps, they're glad to look the other way from a little funny business. They want to sheer the sheep, not skin them.