| May 01, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Yesterday Henry Schwartz of Cboe Global Markets led off the program at the Options Industry Conference in Asheville, NC with his "State of the Markets" presentation, giving a well-attended session an update on mind-boggling statistics about the options markets.
I tweeted one of his slides showing volume by exchange group and exchanges.
The Options Industry Conference published a short video on LinkedIn showing some of the highlights of day one of the conference with a music soundtrack.
JLN had interviewed Schwartz earlier in the day for our JLN Industry Leader video series. We also interviewed David Dooman (Dash), Kevin Darby (CQG), Meaghan Dugan (NYSE), Steve Sosnick (Interactive Brokers), Frank Bednarz (Chicago Trading Company), JJ Kinahan (IG North America) and Mike Dennis (ABN AMRO Clearing USA).
Another first time Option Industry Conference attendee (first time caller, long-time listener) is Alex Lamb of Scila AB. Alex was a participant in The Path to Electronic Trading video series with two parts to his interview: Part One, Part Two.
Alex attended the 9:00 session this morning featuring Steve Crutchfield, head of business development at Chicago Trading Company, leading a discussion on the rise of options volume with panelists Chris Larkin, managing director, head of trading and investing at E*TRADE from Morgan Stanley, Joe Mazzola, director, trading & education at Charles Schwab, and Greg Stevens, vice president at Fidelity Investments. Alex said he took his notes on his phone, put them into ChatGPT and it produced an excellent report on the session he could send on to his colleagues. There is another great use of this AI technology.
Right now there is a panel going on led by moderator JJ Kinahan, CEO of IG North America, with panelists Johnathan Hampton, director of new sales and partnerships at Exegy, Jessica Inskip, director of education and product at OptionsPlay, and Steve Quirk, chief brokerage officer at Robinhood. The session is titled "Engaging Today's Investor: Are We Evolving With Them?" ~JJL
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Deutsche Borse executive Thomas Book discusses three-year plan, megatrends, digital assets and more at FIA Conference
JohnLothianNews.com
Thomas Book, a member of Deutsche Börse's executive board responsible for trading and clearing, spoke with JLN at the FIA Boca Futures Industry Conference in March about Deutsche Börse's goals for 2026, how it plans to differentiate itself in the digital asset market, and more, as part of JLN's Industry Leaders series sponsored by Wedbush.
Watch the video »
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ICE Senior VP Trabue Bland Discusses Global Market Shifts and New Futures Strategies at FIA Conference
JohnLothianNews.com
There is a renewed focus on pricing carbon and hedging environmental risk, said Trabue Bland, senior vice president of futures exchanges at Intercontinental Exchange, during an interview with John Lothian News at the FIA International Futures Industry Conference in Boca Raton, Florida, in March. He was featured as part of the JLN Industry Leader video series sponsored by Wedbush.
Watch the video »
| | | | | | Lead Stories | | | Bank of America Sounds Warning on Options-ETF Boom as Day Traders Plunge In; Yield-seeking investors push covered-call ETFs to $69 billion; Strategy is "as unprofitable as ever," according to BofA
Emily Graffeo and Denitsa Tsekova - Bloomberg
Over the last two years, Wall Street has convinced cautious equity investors to send billions of dollars into exchange-traded funds that use options to goose yields. A vocal chorus of analysts has been warning against this booming trade, to no avail. Assets in the derivatives-powered ETFs have quadrupled to $69 billion. Now Bank of America Corp. is joining the ranks of skeptics, saying such products often fare worse than simpler alternatives. After crunching performance data, the US bank finds that a vanilla bet on dividend-focused ETFs probably serves most investors better.
/jlne.ws/4doMXSz
CFTC announces changes to large trading reporting for futures and options; New rules will require firms to report position information for the largest futures and options traders to the Commodity Futures Trading Commission (CFTC) with an appendix specifying the substituted applicable data elements.
Wesley Bray - The Trade
The CFTC has approved updates to its large trading reporting regulations for futures and options. The updated regulations call for future commission merchants, clearing members, foreign brokers and reporting firms to report position information for the largest futures and options traders to the Commission. The finalised rules substitute the data elements listed in the CFTC's regulations with an appendix specifying applicable data elements.
/jlne.ws/3QoLuli
CFTC Approves Final Rules on Large Trader Reporting for Futures and Options
CFTC
The Commodity Futures Trading Commission today announced approval of final rules to amend its large trading reporting regulations for futures and options. These regulations require futures commission merchants, clearing members, foreign brokers, and certain reporting markets (reporting firms) to report to the Commission position information for the largest futures and options traders. The final rules replace the data elements currently enumerated in the CFTC's regulations with an appendix specifying applicable data elements. The final rules also provide for the publication of a separate Part 17 Guidebook specifying the form and manner for reporting. In addition, the final rules remove the outdated 80-character data submission standard in the CFTC's regulations. That standard will be replaced by a FIXML standard, as set out in the Part 17 Guidebook.
/jlne.ws/3JGUWgd
Mining ETFs Win in Turbulent April With Double-Digit Gains
Benzinga via Markets Insider
Wall Street is on track for its worst month in 2024 as growing inflation fears and escalating geopolitical tensions weigh on investors' sentiment. With just a day left in the month, the S&P 500 dropped 2.7%, potentially its sharpest decline since September 2023. The Nasdaq Composite experienced a 2.4% decrease, setting it on course for its worst performance since October 2023. Meanwhile, the Dow Jones Industrial Average declined 3.8%, marking its most significant monthly drop since February 2023, per Dow Jones Market Data.
/jlne.ws/4bg9rDu
| | | | | | Exchanges | | | OCC Announces Director Elections at Annual Stockholder Meeting
OCC
OCC, the world's largest equity derivatives clearing organization, today announced the election of two Class II Member Directors and a Class III Public Director, as well as the appointment of five Exchange Directors, to its Board of Directors. In addition, OCC announced the election of Andrej Bolkovic, OCC Chief Executive Officer, as the Management Director. The vote took place during OCC's annual stockholder meeting on April 19, 2024. Maria Chiodi, Managing Director in the General Counsel department at Credit Suisse Securities (USA) LLC. Ms. Chiodi joined the OCC Board of Directors in 2019. Faris Matalka, Managing Director at Charles Schwab. Mr. Matalka joined the OCC Board of Directors in 2022. The following Director was unanimously elected as a Class III Public Director for the term ending in 2027: Dr. Thomas R. Cardello, Founding Member, Venice Financial Management, LLC. Dr. Cardello joined the OCC Board of Directors in 2015. Dr. Cardello will continue to Chair the Technology Committee.
/jlne.ws/4a9d3q8
FMX-owner BGC's profit jumps on rates, energy trading
Niket Nishant and Laura Matthews - Reuters
BGC Group's first-quarter profit nearly doubled, it said on Tuesday, as investors looking to navigate the uncertainty around monetary policy pushed trading volumes higher in the brokerage's rates and energy businesses. The strong report comes less than a week after the company's FMX exchange, which is looking to take on derivatives trading giant CME Group, secured a minority investment from 10 financial market giants including Bank of America, Goldman Sachs and JPMorgan Chase.
/jlne.ws/3QmvEYI
CME Group Reaches New Milestones in Aluminum Futures as New Clients Double
CME Group
CME Group, the world's leading derivatives marketplace, today announced that the number of market participants trading Aluminum futures has doubled since last year, reaching 406 unique accounts in April, while ADV was up 70% year-over-year, and average daily open interest increased 11%.
/jlne.ws/3WoTZkq
| | | | | | Regulation & Enforcement | | | Statement of Commissioner Kristin N. Johnson In Support of Final Rule Adopting Amendments to Large Trader Position Reporting Requirements
CFTC
Today, the Commodity Futures Trading Commission (Commission or CFTC) adopts amendments to large trader reports. Ensuring the integrity and transparency of these reports fosters sound derivatives markets by providing the Commission with critical information concerning the largest positional exposures in futures and options markets. I support adopting the final rule, which amends certain provisions of the Large Trader Reporting Requirements for futures and options under Commission Regulation 17.00 (a) and (g) (Final Rule).
/jlne.ws/4b9vnAe
| | | | | | Strategy | | | This Options-Backed Strategy Can Help You Dodge the Stock Market's Hazards; Harness some of the world's most powerful financial forces by combining compounding and dividends with conservative options strategies.
Steven M. Sears - Barron's
There are certain financial facts made truer by time. Never let transitory market drama make you forget that.
Compound interest, which some have called the eighth wonder of the world, helps portfolios to exponentially increase in value. Dividends, which account for about 40% of historical stock returns, are a humble miracle worker that injects some certainty into an uncertain process.
/jlne.ws/4a1GJFv
3 Questions in 3 Minutes: WisdomTree U.S. High Yield Corporate Bond Fund (WHFY) | Kevin Flanagan
Cbeo (Video)
/jlne.ws/3UnvEIX
| | | | | | Education | | | Should You Invest in Volatility ETFs?; Everything you need to know about volatility exchange-traded funds.
ETF.com
After a tranquil start to the year, stock market volatility picked up in April, with the S&P 500 falling more than 5% from its highs as worries about inflation and interest rates intensified.
The most famous gauge of U.S. stock market volatility, the Cboe Volatility IndexâVIX for shortâshot as high as 19, a significant jump from the sub-13 level it was trading at before the market's pullback. It's since fallen back to less than 15.
/jlne.ws/4bh4sSV
| | | | | | Miscellaneous | | | Why the US dollar is the world's problem (podcast)
Financial Times Unhedged Podcast - FT Trading Room
The American economy is strong - and the dollar is extremely expensive. Today on the show, we talk about how the strong dollar affects the rest of the world, pressuring importers, benefitting manufacturers, and causing capital to flow into the United States. Also we go long McDonald's and long the British pub.
/jlne.ws/3UloZPx
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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| | | Jeff Bergstrom
Editor
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