| September 12, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | The Spikes futures funeral has been put on hold as MIAX has filed a petition to the Washington, DC Court of Appeals asking them to review the matter. This starts a new 60-day clock that will keep Spikes futures trading through January 1, 2024.
What strikes me about this conflict is that the Cboe is trying to eliminate the competition using the courts, while also not being very vocal in public about their case. That speaks to a losing hand, a shark that is all teeth and no bite. The industry always wants competition. So does the SEC, as evidenced from its statement when it issued the Spikes futures Exemptive Order in November of 2020, saying:
"The Commission believes that permitting the Product to trade as a futures contract, as opposed to as a security future, should foster competition as it could serve as an alternative to the only comparable incumbent volatility product in the market. Facilitating greater competition among these types of products should provide market participants with access to a wider range of financial instruments to trade on and hedge against volatility in the markets, particularly the S&P 500. In addition, the introduction of an additional volatility product in the market should lower transaction costs for market participants. Further, because SPY options are traded on 16 different national securities exchanges, the Commission would expect there to be a large number of market participants able to act as market makers in the Product. Moreover, the fact that SPY options are multi-listed should provide resiliency by reducing the likelihood that a disruption on one or more options exchanges could lead to a disruption in trading in the Product." ~JJL
| | | | | | Lead Stories | | | Amateurs Pile Into 24-Hour Options: 'It's Just Gambling'; Rookie speculators try to strike it big on short-term investments that often act like lottery tickets
Gunjan Banerji - The Wall Street Journal
Lucas Sommer woke up around the time the stock market opened and, still bleary-eyed, opened his Robinhood app. He had a hunch it would be a good day for stocks, so he scooped up some options contracts that would profit if the tech-heavy Nasdaq Composite Index rose that day. By the time he was toweling off from a shower, though, the market had ticked down and his options had taken a big hit. "That's a $1,000 shower," he recalled thinking. Soon after, the options he bought for $3,000 were worth $80.
/jlne.ws/3ZgiAXL
US Economy Will Avoid Recession, Riddled With Green Flags: Fundstrat
Jennifer Sor - Business Insider
The US economy is actually showing signs of entering an expansion, not a recession, according to Fundstrat's head of research Tom Lee.
Lee, who is one of the most bullish Wall Street commentators, pointed to a handful of positive indicators in the economy that suggest inflation is coming under the Fed's control and the US may not slip into a hard landing after all.
/jlne.ws/45TvNsb
JPMorgan's Dimon Warns of Recession and Rate Hikes, Quotes Buffett
Theron Mohamed - Business Insider
Jamie Dimon has sounded the alarm on a slew of headwinds buffeting the global economy, and cautioned that a recession and further interest-rate hikes could deal heavy blows to some consumers and businesses.
The billionaire banker and JPMorgan CEO also championed prudent risk management, and warned that more lenders could run into problems like Silicon Valley Bank did this spring. He quoted Warren Buffett, a longtime business associate, to make both points.
/jlne.ws/3Px97rX
Hedge Fund Boss Slams Hydrogen Bets as 'Complete Waste of Time'; Argonaut's Barry Norris says he's shorting hydrogen stocks; Impax CEO says 10-15 years out, hydrogen looks a lot better
Sheryl Tian Tong Lee - Bloomberg
Hydrogen is a losing bet for investors interested in making money in the foreseeable future, according to Barry Norris, the founder and chief investment officer of UK hedge fund Argonaut Capital Partners. "It's a complete waste of time, unfortunately," London-based Norris said in an interview. The Argonaut CIO said he's "skeptical that the business models of a lot of these companies will work."
/jlne.ws/45LZZWd
US energy producers reduce hedging to capture upside from higher prices
Will Acworth - FIA
US oil and gas producers are reducing the amount of protection they are buying against the risk of falling prices, according to an analysis of public disclosures by Wood Mackenzie, the consulting firm.
Hedge coverage ratios, which measure the percent of future production that is protected through the use of derivatives, have fallen to the lowest level in at least five years, the consulting firm said. Although hedging strategies vary considerably across the industry, one general factor is that these companies expect prices to continue rising, reducing the need for this type of protection.
/jlne.ws/3EIh5rT
Crypto Volatility Picks Up on Looming Sales From FTX's $3.4 Billion Token Hoard; FTX will seek approval for disposals at Sept. 13 court hearing; September on average was worst month for crypto in past decade
Sidhartha Shukla and Akshay Chinchalkar - Bloomberg
Volatility picked up in digital-asset markets as traders evaluated the prospect of crypto disposals by the defunct FTX exchange through its bankruptcy process. FTX's administrators have recovered about $7 billion in assets, including $3.4 billion of crypto. A court hearing is due on Wednesday to consider a plan to begin sales of tokens to help repay creditors, according to recent filings.
/jlne.ws/3LgtRBR
YieldMax⢠Launches Option Income Strategy ETF on JPMorgan Chase
Bloomberg
YieldMax⢠announced the launch today of the following ETF:
o YieldMax⢠JPM Option Income Strategy ETF (NYSE Arca: JPMO)
JPMO seeks to generate monthly income via a synthetic covered call strategy on
JPMorgan Chase & Co. (JPM). The ETF is actively managed by ZEGA Financial.
JPMO does not invest directly in JPM.
/jlne.ws/3ZdX7ia
| | | | | | Exchanges | | | Building out Eurex's home of the euro yield curve ambition
Risk.net (Sponsored by Eurex)
If you were to pick the key characteristics market participants look for in a superlative trading platform, three would probably stand out: liquidity, choice and margin efficiency.
While they are of timeless value, they are especially relevant now as traders, hedgers and risk managers prepare for what is coming in light of recent key market and regulatory developments in Europe and a higher interest rate regime.
/jlne.ws/3sSVScp
A closer look at how industry expert Tony Huck's new venture is set to facilitate more seamless trading operations; TRADE CYCLE will focus on streamlining areas including: data and trading analytics, execution, connectivity and clearing, among others, The TRADE understands.
Claudia Preece - The Trade
Electronic trading expert Tony Huck launched TRADE CYCLE last week in a bid to enhance the trading operations of institutional clients within the US equities, options, and futures markets through promoting more mutually beneficial communications.
/jlne.ws/3EBoHfP
CME Group And DTCC Receive Regulatory Approval For Enhanced Treasury Cross-Margining Arrangement Launching January 2024
CME Group
CME Group, the world's leading derivatives marketplace, and The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced their enhanced cross-margining arrangement has received Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) approvals. The arrangement will enable capital efficiencies for clearing members that trade and clear both U.S. Treasury securities and CME Group Interest Rate futures and is expected to launch in January 2024.
/jlne.ws/44IQdTm
Eurex's Partnership Program for short-term interest rate derivatives gains traction with key stakeholders
Eurex
The extension of Eurex's Partnership Program to the short-term interest rate (STIR) derivatives segment has garnered substantial interest. As of publication of this release, 18 participants from the U.S., the U.K., and Continental Europe have registered for the program. The STIR Partnership Program is planned to go live in the last week of October in conjunction with the product re-launch.
/jlne.ws/3RpU7xg
| | | | | | Regulation & Enforcement | | | FIA signs letter to SEC on negative impacts of Safeguarding Advisory Client Assets proposal
FIA
FIA has joined with a diverse set of trade associations - 26 in total - in sending a letter to US Securities and Exchange Commission Chair Gary Gensler urging the SEC not to adopt the Safeguarding Advisory Client proposed rule in its current form.
"We support the Commission's goal of ensuring high levels of investor protection, including the safety of client assets from potential misuse or loss. However, in its current form, the proposal is in conflict with that goal as it will result in a myriad of negative impacts on investors including their access to various assets and markets with well-established rules and procedures," the associations wrote in the letter. "As such, we strongly urge the Commission not to adopt the proposal in its current form."
/jlne.ws/3LlJ4S7
| | | | | | Strategy | | | CPI Data Coming Tomorrow
Cbooe (Video)
In #Vol411, Tim Biggam @Delta_Desk shares that consumer price index (#CPI) data will be released tomorrow before market open, the $VIX term structure is still in contango and more.
/jlne.ws/3PhKvSB
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