| | | | | | | February 26, 2025 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Bitcoin (BTC) Options Worth $5 Billion to Expire on Feb. 28
Markets Insider
More volatility and price declines might be in store for cryptocurrencies as $5 billion worth of Bitcoin (BTC) options contracts are set to expire this coming Friday (Feb. 28).
Bitcoin's downward trend in recent weeks could continue as traders offload billions worth of options contracts heading into month's end. The price of Bitcoin remains below the key support level of $90,000 after a steep selloff in recent days. Other crypto, such as Ethereum (ETH), have also sold off sharply.
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Bitcoin's Slide Has Traders Hedging Against a Drop to $70,000; Biggest token's four-day drop is the largest since August; Bitcoin ETFs saw outflows of more than $1 billion Tuesday
David Pan and Isabelle Lee - Bloomberg
With the so-called Trump bump fading across markets, Bitcoin options are showing that investors and traders are hedging against a decline in the cryptocurrency to levels last seen just after election day.
The open interest, or the number of outstanding contracts, for put options with a strike price of $70,000 is the second highest among all contracts expiring on Feb. 28, according to data from Deribit, the largest crypto options exchange. A total of $4.9 billion in open interest is set to expire on Friday.
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Wall Street Gamblers Get Crushed as Leveraged ETF Losses Hit 40%
Denitsa Tsekova and Isabelle Lee - Bloomberg
They were all the rage on the way up: high-risk, high-return exchange-traded funds, minted in bulk by Wall Street product managers in the euphoria of the post-election bull market. Now these speculative products are dealing their owners a gut punch after a series of disappointing economic reports and anxiety over US trade policy have put a brake on risk tolerance across the markets.
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Crypto Greed Index Flashes 'Extreme Fear' as Market Drops 10%
Shaurya Malwa - CoinDesk
Crypto traders are feeling the jitters today. The widely-watched Crypto Fear and Greed Index, a market indicator that uses social media posts, volatility, trends and prices to gauge trader sentiment, dropped to a five-month low of 25 in its latest update. That's a big fall from yesterday's figure of 49, landing it in the "extreme fear" zone, coming as overall market capitalization fell 10% in the past 24 hours as bitcoin and major tokens such as Solana (SOL) and xrp (XRP) fell more than 14%.
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Bitcoin ETFs Plunge as Investors Yank $938M in a Day
Markets Insider
Investors pulled a staggering $938 million from U.S. spot Bitcoin ETFs in a single day, marking the largest daily outflow ever for these funds. Recently, the Bitcoin market has been shaky, struggling to hold above $90,000. This has naturally led to an exodus extending over six consecutive days, culminating in a total of over $2.4 billion exiting these funds this month alone. "This month has been brutal for Bitcoin enthusiasts," commented Nate Geraci, President of ETF Store, on X. He expressed his astonishment at the traditional finance sector's apparent distaste for cryptocurrency.
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U.S. Bitcoin ETFs See Record Daily Outflow of Over $930M as Carry Trades Lose Shine to The 10-Year Treasury Note; Investors pulled out funds from bitcoin and ether spot ETFs Tuesday as dwindling basis in the CME futures dented the appeal of carry trades.
Omkar Godbole - CoinDesk
Tuesday was a rough day for the crypto market, as bitcoin (BTC) fell to three-month lows below $87,000, dragging the broader market down. More importantly, investors withdrew funds from U.S.-listed spot bitcoin exchange-traded funds (ETF) at an unprecedented rate. The 11 spot ETFs registered a cumulative net outflow of $937.78 million, the most significant single-day redemption since the funds began trading in January 2024, according to data tracked by SoSoValue.
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Bitcoin speculators send $7B to exchanges at a loss in BTC price crash; Bitcoin short-term holders entered panic mode as they crossed into aggregate loss thanks to a sub-$90,000 BTC price.
William Suberg - CoinTelegraph
Bitcoin positions held by short-term holders became unprofitable as BTC prices fell to a 15-week low, and this cohort of traders responded by moving nearly 80,000 BTC to exchanges.
The latest data from onchain analytics platform CryptoQuant hints at the reasons why traders would send a massive amount of Bitcoin to centralized exchanges, a move which is historically viewed as bearish for BTC's price action.
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Derivatives Trading: The Ultimate Tariff Hedge?; Some business owners are opting for an investment tool Warren Buffett once called 'financial instruments of mass destruction.' But lawmakers want to make it easier for entrepreneurs to access this market.
Melissa Angell - Inc.
With more of President Trump's tariffs expected to kick in, entrepreneurs are doing what they do best: protecting their bottom lines. To do so, some are wading into derivatives markets to mitigate risk, lock in pricing for key commodities, and get some protection against tariffs, looming or otherwise.
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| | | | | | Exchanges | | | CME Group Sets New Daily Volume Record of 67.1 Million Contracts, Driven by Interest Rate and U.S. Treasury Markets
CME Group
CME Group, the world's leading derivatives marketplace, today reported it reached a new, single-day volume record of 67,124,571 contracts traded on February 25. This surpasses the previous record of 66,256,756 contracts set on March 13, 2023.
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Sebi proposes fresh steps to tighten derivative market rules
Reuters via The Economic Times
India's markets regulator has proposed lowering position limits for equity stock derivatives and tightening rules for index derivatives, in a bid to further reduce the build-up of risk in these markets. The new proposals follow changes announced in October, where the Securities and Exchange Board of India (SEBI) raised the entry barrier for trading in derivatives and made it more costly to trade to protect retail investors. The fresh proposals come against the backdrop of concerns that volatility from the futures and options market is spilling over into the broader stock market, which has slipped sharply after hitting record highs in September 2024.
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HKEX Welcomes Listing Of New Flagship ETF
HKEX via Mondovisione
HKE welcomed the listing of the Invesco QQQ Trust, the world's largest Nasdaq-100 Index ETF. HKEX Head of Equities Product Development, Brian Roberts, said: "We are delighted to welcome today's listing of the Invesco QQQ ETF on HKEX, the first listing of this flagship ETF outside North America, marking a significant milestone for our market. This development not only underscores HKEX's position as Asia's premier ETF marketplace, but also reinforces Hong Kong's role as a leading international financial hub."
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| | | | | | Regulation & Enforcement | | | CFTC Offers New Incentives for Companies to Report Their Own Wrongdoing; The derivatives market regulator clarifies criteria and credit it will give to companies that voluntarily report misconduct
Mengqi Sun - The Wall Street Journal
The Commodity Futures Trading Commission said it would give companies that voluntarily report potential misconduct more lenient penalties under a new enforcement advisory. In a memo published on Tuesday, the derivatives market regulator issued new guidelines clarifying how it would give credit to a company that reports its own potential misconduct, cooperates with an agency investigation and addresses a reported issue. A company that voluntarily reports potential wrongdoing and fully cooperates can receive a discount from the CFTC cutting the cost of a penalty to less than half the initially calculated amount in some cases.
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CFTC to Curtail Fines for Alleged Wrongdoers Who Cooperate; Derivatives regulator to examine self-reporting, cooperation; Agency complying with order to roll back 'burdensome' rules
Nicola M White - Bloomberg
The US Commodity Futures Trading Commission will formally evaluate how companies or individuals accused of wrongdoing cooperate or self-report before levying fines, the latest signal the derivatives regulator is shifting its approach to enforcement.
The new advisory intends to create "meaningful incentives for firms to come forward and get cases resolved faster with reasonable penalties," CFTC Acting Chairman Caroline Pham said in a statement Tuesday.
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SEC extends key deadlines for US Treasury clearing rule
Davide Barbuscia and Douglas Gillison - Reuters
Wall Street's top regulator hit the brakes on a key reform on Tuesday, delaying by a year the rollout of new rules designed to curb systemic risk in the $28.5 trillion U.S. Treasury market by channeling more trades through clearing houses.
The U.S. Securities and Exchange Commission said in a statement late on Tuesday it had extended by 12 months compliance dates for the clearing of eligible cash transactions and repo transactions.
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Sebi proposes fresh steps to tighten derivative market rules
Reuters via The Economic Times
India's markets regulator has proposed lowering position limits for equity stock derivatives and tightening rules for index derivatives, in a bid to further reduce the build-up of risk in these markets. The new proposals follow changes announced in October, where the Securities and Exchange Board of India (SEBI) raised the entry barrier for trading in derivatives and made it more costly to trade to protect retail investors. The fresh proposals come against the backdrop of concerns that volatility from the futures and options market is spilling over into the broader stock market, which has slipped sharply after hitting record highs in September 2024.
/jlne.ws/4bjno4H
| | | | | | Strategy | | | This neat trick makes it simpler to forecast a decade of stock-market returns; Researchers suggest 10-year average return of stocks of just over 4%
Steve Goldstein - MarketWatch
A new research paper reveals a simpler, sharper way to forecast future stock market returns by ditching the need for 10 years of data and focusing on just one year's earnings.
The paper, by Thomas Phillips, who teaches quantitative portfolio management and valuation theory at New York University's engineering school, and Adam Kobor, director of investments for NYU's endowment, challenges the popular cyclically adjusted price-to-earnings, or CAPE, ratio from Robert Shiller and John Campbell, that relies on 10 years of data.
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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
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
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