| October 11, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Cboe will transition the EDGA Equities Exchange to a maker-taker model starting November 1, 2024, moving away from its previous inverted venue structure. This change includes implementing a high rebate, tier-free pricing model, which aims to better serve the market and address customer needs for simpler pricing options. The decision comes in response to the declining market share of inverted venues and extensive customer feedback indicating a demand for a no-tier pricing model. Cboe believes that these adjustments will attract a broader range of market participants, improve fill rates, stabilize quotes, and streamline workflows on EDGA. The North American Equities Execution Consulting team will analyze the market post-transition and share findings in the coming months.
Acuiti and the Singapore Exchange (SGX Group) have launched the SGX Global Market Sentiment Index, a quarterly barometer that gauges sentiment across the global derivatives market. Based on a poll of senior executives from hedge funds, asset managers, proprietary trading firms, and the sell-side, the inaugural report found that 68% of respondents were optimistic about the next three months, an increase from 65% in the previous quarter. While sentiment among sell-side and proprietary trading firms improved, concerns over volatility affected confidence among asset managers; overall, 2024 is projected to be a record year for volumes in the global derivatives market.
Architect Financial Technologies announced that its subsidiary, Architect Securities LLC, has received regulatory approval from FINRA to operate as an Introducing Broker Dealer. This approval will enable the company to expand its technologically advanced brokerage services to include equities, ETFs, ADRs, options, and U.S. government securities. Former FTX US President Brett Harrison, now CEO of Architect, emphasized that the new trading platform responds to the growing demand for derivatives and innovative products like private market ETFs and options on digital asset ETFs. Architect had previously launched a CFTC-regulated Introducing Brokerage in May, allowing clients to trade commodity and index futures and options.
I am working on setting up an interview with Matrix Executions after its recent big announcement last week. Matrix Executions announced it is set to launch its new electronic alternative trading system (ATS) for U.S. listed options, called Matrix QRX ATS, aimed at institutional investors. The platform enhances price improvement and liquidity by allowing algorithmic strategies to access liquidity providers through blind indications of interest (IOIs), ensuring anonymity in order flow. CEO Jordan Naylor emphasized that the ATS will transform the trading experience by focusing on price discovery, liquidity, and trading cost mitigation, ultimately improving market efficiency for clients. ~JJL
| | | | | | Lead Stories | | | $1.1 Billion Bitcoin Options Expiry Points at BTC Price Volatility Ahead
Bhushan Akolkar - Coinspeaker
On Friday, $1.1 billion in Bitcoin options are set to expire which could trigger a short-term price impact pushing BTC price under $60,000 earlier today. In comparison to the last week, there's a significant surge in the number of Bitcoin contracts set to expire today.
As per the data on the crypto derivatives platform Deribit, a total of 18,271 Bitcoin options contracts will expire today along with a put-to-call ratio of 0.90 and a maximum pain point of $62,000. The max point is an indicator that frequently influences market dynamics.
/jlne.ws/3NtJR3T
The Rise of the Quick-Buck ETF; On this episode of Trillions, we discuss tempting but risky derivatives-enhanced exchange-traded funds that are all the rage.
Joel Weber and Eric Balchunas - Bloomberg
Derivatives-enhanced exchange-traded funds have become a hit with retail investors. There's been more than 160 such launches so far this year, with monikers such as "laddered buffer" and "covered call," and they've attracted $50 billion and counting. While many of the products were designed to protect from downturns, some include options that can generate cash, which comes back to investors in the form of dividends. (Did someone say "yields"?)
/jlne.ws/4gXMOaD
Wall Street Races to Launch Latest Cohort of Crypto-Spot ETFs; Firms seek to debut exchange-traded funds tied to XRP token; Efforts come after regulatory clarity around Ripple Labs
Isabelle Lee - Bloomberg
The race to launch an exchange-traded fund tracking XRP, the seventh-largest digital token, has begun. Canary Capital Group, a new digital asset-focused investment firm founded in September, submitted paperwork with the Securities and Exchange Commission Tuesday to launch the Canary XRP ETF. It comes just a week after Bitwise Asset Management Inc. became the first firm to file for an ETF tracking the token. Canary, founded by former Valkyrie Funds co-founder Steven McClurg, said in a statement that it was encouraged by "signs of a more progressive regulatory environment coupled with growing demand from investors."
/jlne.ws/4dIXh6M
Oil's 'War Premium' Is Back. Can Prices Top $100?; As violence escalates in the Middle East, traders are scooping up oil-sensitive stocks and options. It's a risky strategy.
Avi Salzman - Barron's
In the span of two weeks, oil investors went from being as pessimistic as they've been in more than a decade to placing a surge of bullish bets on $100 prices. As Israel's war with Iran escalates, oil's war premium is back and could stick around for months.
/jlne.ws/4dJeptn
Here's the next data point to watch as Wall Street eyes a 'no landing' scenario for the US economy
Kelly Cloonan - Business Insider
America's spending habits are the next data point to monitor as Wall Street investors see rising odds of a "no landing" scenario for the US economy.
Bank of America analysts expect September retail sales data, set for release on October 17, to show a 0.8% surge. Consensus estimates expect just 0.2% growth, according to economists polled by Bloomberg.
/jlne.ws/4f2eoSa
| | | | | | Exchanges | | | Cboe Shifts EDGA Equities Exchange to Maker-Taker Model
Cboe - Traders Magazine
Valued Customers,
As you know, beginning November 1, Cboe will transition the EDGA Equities Exchange from an inverted venue to a maker-taker venue. I am excited to share that in addition to this change, we will also be implementing a high rebate, tier-free pricing model.
I wanted to share more about our decision to implement these changes ahead of their implementation next month. First and foremost, across the industry, the market share for inverted markets has shrunk dramatically in recent years. We determined we could better serve the market by providing another maker-taker venue and focusing our inverted strategy on just one exchange, BYX Equities.
/jlne.ws/4dHhYAk
Acuiti and SGX Group launch global derivatives market sentiment index
Acuiti
London - 9 October 2024: Acuiti and Singapore Exchange (SGX Group) today released the SGX Global Market Sentiment Index, a barometer of sentiment from across the global derivatives market. The Sentiment Index is based on a quarterly poll of Acuiti's Expert Networks, comprising senior, derivatives-focused executives from hedge funds, asset managers, proprietary trading firms and the sell-side.
/jlne.ws/4eUVJYo
EEX Press Release - EEX to launch new futures for dry and LNG freight markets
EEX
The European Energy Exchange (EEX) will introduce a new suite of freight futures and options contracts for the dry and LNG freight markets from 25 November 2024. The products comprise the new Baltic Supramax 11TC Freight Month Future, Baltic Supramax and Capsize Month Options for various routes in addition to the EEX Baltic LNG 174 Freight Month Futures for three intercontinental routes.
/jlne.ws/40jQzBx
| | | | | | Regulation & Enforcement | | | SEC Says Cumberland DRW Acted as Unregistered Crypto Dealer; Cumberland runs one of the largest trading desks in crypto; Firm is also a market maker for several Bitcoin ETF products
Nicola M. White and Muyao Shen - Bloomberg
The US Securities and Exchange Commission has accused the cryptocurrency arm of Chicago-based proprietary trading giant DRW Holdings LLC of operating as an unregistered securities dealer in more than $2 billion of digital assets. In its latest attempt to crack down on the crypto industry, the market regulator said Cumberland DRW bypassed registration rules designed to protect investors and brought in millions in the process. Since at least March 2018 through the present, Cumberland bought and sold crypto assets 24 hours a day, seven days a week, the SEC said in a lawsuit filed in federal court in Illinois.
/jlne.ws/4822be0
| | | | | | Technology | | | BMLL Wins 'Best Data Science Solution Provider' At The Hedgeweek US Awards 2024
Mondovisione
We are delighted to announce that BMLL has won "Best Data Science Solution Provider" at the HedgeWeek US Awards 2024. These awards recognise excellence among fund managers and service providers in the US across a wide range of categories. BMLL was awarded for providing harmonised, Level 3, Level 2 and Level 1 historical data and analytics to hedge funds, helping them improve predictability, quality and speed of alpha through a scalable, managed data and analytics service.
/jlne.ws/3Nom5GO
| | | | | | Moves | | | David Martin appointed as Chief Executive Officer of G. H. Financials Limited
G. H. Financials
G. H. Financials (GHF), a global independent clearing firm for exchange-traded derivatives, announces the appointment of David Martin as Chief Executive Officer of G. H. Financials Limited, effective 14th October, who will relocate to London. Martin joins GHF following 27 years with J.P. Morgan where he was most recently Asia Pacific Head of Futures and Derivatives Clearing. He has been with the bank since 1997, holding various senior roles within the futures and options business before relocating to Singapore in 2014 to manage the derivatives clearing business in the region. Martin is also highly involved in the industry beyond his role at the bank, where he has chaired the FIA Asia Regional Advisory Board, contributing his extensive experience to regulatory and market discussions in the region.
/jlne.ws/403qQgi
| | | | | | Strategy | | | Ride the Russell 2000 to 3,000 With These 3 Unusually Active Options
Will Ashworth - Barchart
Last November, I recommended three unusually active options for the iShares Russell 2000 ETF (IWM). At the time, the Russell 2000 was trading around 1,793. I suggested that investors ride it to 2,000.
The index hit 2,000 a few days before Christmas. It has added nearly 9% in 2024, which isn't terrible, but compared to the S&P 500's almost 22% gains year-to-date, the Russell 2000's 2024 returns are relatively mediocre.
/jlne.ws/484id78
The Stock Market Enters Another Earnings Season. It's Time to Look Beyond Big Tech.
Paul R. La Monica - Barron's
The market has been focusing a lot on the Federal Reserve's interest-rate cut, job-market data, China stimulus, oil prices, and other macroeconomic news for the past month or so. But it's now back to basics for stockpickers.
/jlne.ws/3U54Iym
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