| May 29, 2019 | | | |  | Spencer Doar
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Wednesday Miscellany
The team at T3 Index introduced the www.spikesanalytics.com website, which provides analysis and insights on the settlement auction for SPIKES volatility options that trade on MIAX.
The annual auction for lunch with Warren Buffett is already at a record $3.5 million dollars.
Robert Mueller broke his silence today, saying that, "If we had had confidence the president clearly did not commit a crime we would have said so."
| | | | | | Lead Stories | | | Algebris launches new fund targeting jumps in volatility
Robin Wigglesworth - Financial Times (SUBSCRIPTION)
Algebris Investments, a $12bn-in-assets hedge fund based in London, has launched a new vehicle designed to profit from a growing tide of computer-driven traders targeting volatility, which some analysts argue has made markets more turbulent.
/on.ft.com/2WuiqOQ
CAT: A New Timeline, But Data Protection Must Remain a Top Priority
SIFMA
In February 2019, the SRO Operating Committee of the Consolidated Audit Trail (CAT) announced that the Financial Industry Regulatory Authority (FINRA) will be the new Plan Processor for the CAT, and they have transitioned the CAT project's implementation and maintenance activities to a new subsidiary, "FINRA CAT LLC."
As a result of this transition, certain key project dates have changed. At SIFMA's recent Operations Conference & Exhibition, the "CAT: Ready, Set, Go" panelists, including FINRA CAT's Chief Operating Officer and the SEC's Senior Policy Advisor on the CAT, confirmed the new dates.
bit.ly/2I7Qffd
****SD: Industry testing for equities and options begins on December 16.
Rising pound volatility gauges signal no-deal Brexit nerves
Saikat Chatterjee and Sujata Rao - Reuters
The pound held near four-month lows on Wednesday but with the contest to succeed Prime Minister Theresa May under way and the clock ticking on Brexit, investors are preparing for greater currency swings in coming months.
A gauge of the difference between expected swings in sterling over the next three and the next six months rose to its highest level in more than three years, with implied vol gauges signalling rising anxiety linked to Britain's Oct. 31 deadline to exit the European Union.
/reut.rs/2Wy3NtH
****SD: Live Brexit news via Bloomberg here.
The Death Spiral Of Exchange Liquidity
Tan Kiang - GlobalTrading
Few will object to the necessity of liquidity providers to create a healthy and competitive exchange. Most exchanges welcome market makers and end up creating strong and long-lasting symbiotic relationships with them. Nevertheless, providing liquidity has now become challenging in an environment of rising costs of trading.
bit.ly/2I8CIUB
****SD: From the piece - "Singapore Exchange has disallowed the use of microwaves on their sovereign territory, but until all other exchanges do so, the problem will remain. Instead of prohibiting microwaves, the exchanges should, as they did with colocation and land-grab, make their use irrelevant."
Hedge funds bang defensive drum on oil
John Kemp - Reuters
Hedge funds liquidated more of their bullish petroleum positions as concerns about the health of the global economy and oil usage outweighed European and Middle Eastern supply disruptions.
/reut.rs/2IbOHRk
Will There Be a Recession? US Yield Curve Spells Downturn: MS
Brad Olesen - Bloomberg (SUBSCRIPTION)
Make no mistake, the Treasury yield curve really is flashing recession angst -- and the trade war is merely a sideshow.
While a key slice of the curve has inverted this month for the first time since March, an "adjusted" curve that accounts for quantitative easing and tightening has been persistently inverted for the past six months, according to Morgan Stanley.
/bloom.bg/2WA6PgW
| | | | | | Exchanges and Clearing | | | CME Group to Launch Next Generation of CME SPAN Margin Methodology
CME Group
CME Group today announced it will launch the next generation of its industry-leading Standard Portfolio Analysis of Risk (SPAN) margin framework - CME SPAN 2. The new framework is slated for testing in the second half of 2019 and, pending regulatory review and approval, roll out in the first half of 2020.
bit.ly/2K8kkOi
New CCP12 Position Paper Elaborates On Best Practices To Further Bolster The Resilience Of Central Counterparties And Global Financial Markets
Press Release
The critically important role of central counterparties (CCPs) in the global financial marketplace has been subject to heightened focus since the G20 mandate to centrally clear standardized over-the-counter derivatives. This clearing mandate and other post- crisis regulatory reforms, was driven by the robust performance of CCPs during the 2008 global financial crisis. The stability of cleared derivatives markets during this time of unprecedented stress is unsurprising in light of the long history and best practices of the clearing for exchange-traded derivatives.
/tinyurl.com/y6nrqc38
Inside Volatility Trading: May 28, 2019
Cboe
In May, net leveraged money in VIX futuresÂassets predominantly managed by hedge fundsÂhit record short positions for 2019, while assets in global long VIX exchange-traded productsÂproducts predominantly owned by retail investorsÂcontinued to gather assets.
bit.ly/2Ib6F6r
Exchanges To Acquire Data Businesses
GlobalTrading
The management consultancy said in a report, Exchanges: Innovation and New Business Models to Drive Growth, that selling market data has been a key part of exchanges' business model in order to generate revenues streams that are less volatile and cyclical than transactional fees. The study continued that some exchanges now generate far more from data than they do from trading and clearing, including London Stock Exchange Group and Switzerland's SIX, if revenues from the latter's subsidiary, SIX Financial Information, are included.
bit.ly/2I9PrXa
NSE launches new brand identity for NIFTY Indices
www.exchange4media.com
bit.ly/2I5AYf6
| | | | | | Technology | | | Saxo Bank Launches Multi-Legged Options Strategies
Celeste Skinner - Finance Magnates
Saxo Bank, a multi-asset broker, announced this Wednesday that it has added multi-legged options strategies to its online trading platforms SaxoTraderGO and SaxoTraderPRO.
bit.ly/2I68Atf
| | | | | | Moves | | | A top quant resigned from Citadel just 15 months after he joined
eFinancialCareers
Where is Ryan Stever? No one knows, but one thing seems sure: Stever is not at Citadel any more. Insiders say he quit last month and Stever is no longer listed on Citadel's global directory.
/tinyurl.com/yybql7qd
| | | | | | Miscellaneous | | | Hedge Funds Pay Jefferies to Trade for Them in One-Stop Shopping
Sonali Basak - Bloomberg (SUBSCRIPTION)
More funds are turning to outside firms for trade execution; Outsourcing lets funds stick to 'No. 1 focus,' Laub says
Jefferies Financial Group Inc. is luring dozens of clients to a trading venture for hedge funds, a business that some of its largest rivals exited a decade ago.
The firm has attracted more than 60 clients for the outsourced-trading business it started last June, according to John Laub, head of prime brokerage at New York-based Jefferies. It also hired six buy-side traders for the operation at its prime brokerage.
/bloom.bg/2KbgrYZ
A `Thousand-Year' Bund Rally Takes Hold: A Story Told in Charts
Bloomberg
The global bond market rally is continuing to break records as investors ratchet back their optimism on the economic outlook amid a cocktail of geopolitical risks.
/bloom.bg/2I4CzBL
****SD: From the story: "Gyrations in bonds are a gut check for investors riding the cross-asset risk rally. A measure of implied volatility derived from one-month Treasury options is outpacing its equity companion, known as the VIX, and has risen to the highest since January." Also see the Financial Times' US Treasury rally accelerates as market jitters mount.
ECB Says Financial Risks Rising With Corporate Debt Vulnerable
Paul Gordon - Bloomberg (SUBSCRIPTION)
Risks to the euro zone's public and private finances have risen in the past six months, with indebted companies especially exposed, according to the European Central Bank.
In its semi-annual Financial Stability Review, the ECB said downside economic risks remain "prominent" and market volatility at the start of the year highlighted how a sudden rise in funding costs could hurt debt-laden companies and governments.
/bloom.bg/2WqsYhV
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