| July 01, 2021 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | ****SR: Cboe Global Markets has completed its acquisition of Chi-X Asia Pacific Holdings, which it first announced in March. The acquisition will give Cboe an entry into Japan and Australia and "establish a significant presence in the Asia Pacific region for the first time," according to the Cboe press release. Chi-X Australia is the main competitor with ASX Ltd. in equity trading. Chi-X Japan, a PTS, offers two lit markets, Chi-Alpha and Chi-Select, and two dark markets, Chi-Match and Kai-X. This follows Cboe's acquisition of BIDS Trading, a registered broker-dealer and operator of the BIDS Alternative Trading System, in January of this year. Cboe will integrate Chi-X Asia Pacific into its existing global business operations and technology platforms, beginning with Chi-X Asia Pacific and BIDS and then migrating Chi-X Australia and Chi-X Japan. See the press release below under "Exchanges."
****SC: In news related to today's Chi-X Asia Pacific Holdings announcement, Cboe also said it plans to broaden investor access to its proprietary products - including U.S. index options products based on the S&P 500 Index and Cboe Volatility Index - to tap global investor demand. Pending regulatory approval, it plans to extend trading hours for SPX and VIX options to nearly 24 hours a day beginning November 21. More details are in the release.
| | | | | | Lead Stories | | | Bitcoin Options Open Interest Hits 2021 Low as Frenzy Cools, or Maybe It's Soccer
"Soccer tournaments are continuing worldwide and drawing more attention away from retail crypto trading," one trader said.
Omkar Godbole - Coindesk
The bitcoin options-trading boom that saw traders make ambitious bullish bets early this year has cooled in the wake of the recent price sell-off and subsequent consolidation.
"After the large June expiry, open interest has dropped to levels last seen at the end of 2020," Luuk Strijers, chief commercial officer at Deribit, the world's largest options exchange by open interest and trading volume, said. "Open interest and volume have declined in both the dollar and bitcoin terms in recent weeks due to overall bearish sentiment caused by China's regulatory crackdown and other factors."
/bit.ly/368lXW0
Who gets the $12.6M in restitution from the Robinhood settlement
Ethan Wolff-Mann - Yahoo Finance
On Wednesday, Robinhood reached a settlement with FINRA over a multitude of issues, agreeing to pay a fine of $57 million and restitution to customers of $12.6 million. In the 122-page settlement document against Robinhood, FINRA explains that the company "has paid or intends to pay...a total of $8,853,506.68" to customers who lost money because of misrepresentations about options spread transactions and outages between January 2018 and December 2020.
/jlne.ws/3dyfckm
Why Meme Stock Analysts Are Throwing in the Towel on AMC, GameStop, and Others
Connor Smith - Barron's
Michael Pachter can hardly leave the house without being asked about GameStop. The Wedbush Securities analyst has covered the videogame retailer for nearly two decades. Now, he says everyone from waiters to the woman giving him a Covid-19 shot wants to talk about GameStop. "It's the only stock any of them has ever heard of," he says.
/jlne.ws/3jyZ9qo
Why 'Big Short' Investor Michael Burry Sees a Crash Coming for Meme Stocks
Connor Smith - Barron's
Long before retail investors on Reddit flooded online forums theorizing about GameStop, investor Michael Burry spotted an out-of-favor stock that was misunderstood. Now, Burry says he sees shades of 1999 and 2007âperiods of other market frothiness.
"I don't know when meme stocks such as this will crash, but we probably do not have to wait too long, as I believe the retail crowd is fully invested in this theme, and Wall Street has jumped on the coattails," Burry told Barron's via email. "We're running out of new money available to jump on the bandwagon."
/jlne.ws/3yf1DhK
Record Skew Index shows nagging investor nerves on US stocks rally
Robin Wigglesworth and Michael Mackenzie - Financial Times
Mounting investor nerves over the strength of the US stock market rally has sparked a dash to buy insurance against spikes of turbulence, lifting a popular financial fear gauge to a record high.
The S&P 500 index of blue-chip US equities has climbed more than 16 per cent in 2021, extending its gains since last year's coronavirus nadir to 92 per cent and solidifying the bull market recovery as one of the strongest on record.
/jlne.ws/3ydjXI5
Stock Markets Cruise to Records in First Half, but Investors Grow Uneasy
Akane Otani - WSJ
Stocks closed out the first half of the year with double-digit percentage gains, powered by an economic recovery that many investors believe is still gathering pace.
The S&P 500 is up 14% this year, closing June at a record, while the Dow Jones Industrial Average has climbed 13%. This quarter will mark both indexes' fifth consecutive quarter of gains, their longest such streak since a nine-quarter stretch that lasted through 2017.
/jlne.ws/3htmrv8
Volatility Set for Revival as Stimulus Peaks, Virus Flares
Joanna Ossinger - Bloomberg
The outbreak of a more contagious Covid-19 strain and the prospect of less supportive U.S. monetary policy are pointing to the risk of a choppier path ahead for the equity bull market.
Strategists are warning on volatility but still expect more gains for stocks over 2021, arguing vaccines will help economies reopen. That mix would mark a shift from the first half, when the Cboe Volatility Index, or VIX, fell to pre-pandemic lows as the S&P 500 jumped 14% on a tide of liquidity.
/yhoo.it/3xal63e
| | | | | | Exchanges | | | Cboe Global Markets Completes Acquisition of Chi-X Asia Pacific
Cboe
Transaction is another step in Cboe's strategy to build one of the world's largest global derivatives and securities trading networks; With a presence in Asia Pacific, Cboe expects to expand its global equities and market data businesses, broaden distribution of its proprietary products, as well as bring other new trading solutions and services to the region; Chi-X Asia Pacific planned to be fully integrated into Cboe's existing global business operations and technology platforms
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced it has completed its acquisition of Chi-X Asia Pacific Holdings, Ltd. (Chi-X Asia Pacific), an alternative market operator and provider of innovative market solutions. Through ownership of Chi-X Asia Pacific, Cboe gains entrance into two of the world's largest securities markets - Japan and Australia - to establish a significant presence in the Asia Pacific region for the first time.
/bit.ly/2SGAe9v
Top 10 Volume Day at MGEX
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), reports that Tuesday, June 29th was the 8th best day in the history of the Exchange with a total of 27,816 contracts traded.
/bit.ly/36hhLUh
ICE Announces Record Growth in North American Environmental Products as the Market Prices Climate Risk
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced record growth in ICE's North American environmental complex as increasing numbers of participants use these markets to price and manage climate risk.
The North American environmental complex is made up of futures and options on California Carbon Allowances (CCAs), California Carbon Offsets (CCOs), Regional Greenhouse Gas Initiative Allowances (RGGI), Low Carbon Fuel Standard (LCFS) Credits, and Renewable Energy Certificates (RECs). Average Daily Volume (ADV) has grown 20% on average every year since 2017, while open interest hit a record high of more than 1.1 million contracts on June 25.
/bwnews.pr/3dz2jGQ
Trading Overview in June 2021 & First Half of 2021 (January to June)
JPX
Japan Exchange Group released Trading Overview in June 2021 & First Half of 2021 (January to June).
Cash Equity Market - In the first half of 2021, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 3.1959 trillion; In the first half of 2021, the daily average trading value for ETFs was JPY 259.3 billion; In June 2021, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.7687 trillion; In June 2021, the daily average trading value for the ETF market was JPY 214.7 billion.
Derivatives Market - In the first half of 2021, total derivatives trading volume was 167,537,350 contracts.; In the first half of 2021, total derivatives trading value was JPY 1,479 trillion.
/jlne.ws/2UYcE91
BNP Paribas signs 10-year agreement with FIS on derivatives clearing; All post-trade derivatives operations at BNP Paribas including reconciliation and post-trade processing will be managed by FIS under 10-year agreement.
Annabel Smith - The Trade
French investment bank BNP Paribas has partnered with FIS to transition its derivatives post-trade operations onto the firm's cleared derivatives technology platform. Through a 10-year agreement, markets technology provider FIS will manage all of the bank's post-trade operations including processing and reconciliation.
/jlne.ws/3AmdHQq
| | | | | | Regulation & Enforcement | | | Robinhood asks judge to toss payment for order flow lawsuit
Jody Godoy - Reuters
Robinhood Markets asked a federal judge in Oakland to end a lawsuit alleging the online trading platform committed securities fraud by getting paid to send customer orders to other broker-dealers.
The motions filed on Tuesday urged U.S. District Judge Yvonne Gonzalez Rogers to dismiss or deny class action status to the lawsuit, which alleges the company failed to alert customers that broker-dealers paid Robinhood to execute their trades.
/jlne.ws/3jAz8Hs
FINRA Requests Comment on Effective Methods to Educate Newer Investors
FINRA
Over the past 18 months, U.S. securities markets have experienced dramatic volatility. At the same time, individual investors entered the markets in unprecedented numbersâoften through self-directed accounts at online brokersâdrawn in part by reduced barriers to entry, such as low- and no-commission trading and the ability to purchase fractional shares. Increased retail market participation can benefit individuals by potentially encouraging higher levels of savings and wealth accumulationâand it can benefit the markets in the form of greater liquidity.
/jlne.ws/3Af3rcu
| | | | | | Moves | | | Changes to the Exchange Councils of the Frankfurt Stock Exchange and Eurex
Eurex
The Exchange Council of Eurex Deutschland has elected Robbert Booij, Chief Executive Officer Europe, ABN Amro Clearing Bank N.V., as its Chairman. Georg Stocker, Chief Executive Officer of DekaBank Deutsche Girozentrale, has been elected Deputy Chairman of the Exchange Council of the Frankfurt Stock Exchange (FWB).
Previously, at their regular meetings, both Exchange Councils elected new members to their bodies. Nicolo Salsano, Chairman of the Management Board of HSBC Trinkaus & Burkhardt AG, is a new member of the FWB Exchange Council. Jan Kupfer, Member of the Management Board of UniCredit Bank AG, is a new member of the Exchange Council of Eurex Deutschland.
/bit.ly/3xdD98q
| | | | | | Strategy | | | Opinion: This worrisome indicator is a canary in the coal mine for stock-market tops
Lawrence G. McMillan - MarketWatch
The broad stock market continues to be led by Nasdaq. Both the Nasdaq Composite Index and the NASDAQ-100 have repeatedly made new all-time highs: seven times in the last eight trading days. This action has "dragged" the S&P 500 along to new all-time highs as well.
The good news is that Nasdaq is leading the way, but the bad news is that breadth has been poor on this rally - and that often leads to trouble down the road.
/jlne.ws/3yilT2f
| | | | | | Miscellaneous | | | Meet the Man Who Started the $11 Trillion Index Revolution
Sam Potter - Bloomberg
The unsung hero of modern investing spends his days on the sunny vineyards of Sonoma, California -- a world away from Wall Street.
John "Mac" McQuown never helmed a big bank, crafted policy from Washington D.C., nor enjoyed name recognition like his kindred spirit Jack Bogle.
But exactly 50 years ago to this day, McQuown and his team of legendary academics created the first-ever index fund -- an innovation that would take a sledgehammer to the money-management establishment and evolve into a more than $11 trillion industry.
/jlne.ws/3dBfp6F
When the U.S. Gave Up Gold
Jeffrey E. Garten - WSJ
Fifty years ago next month, at a secret weekend meeting at Camp David, President Richard Nixon and his top economic advisors decided to take the U.S. off the gold standard. The dramatic move, announced by the president upon his return to the White House on August 15, 1971, suspended the most fundamental rules of the international monetary system, affecting the prices of all products, commodities and services in world commerce. No policy choice since World War II has done more to shape global exchange, with repercussions still visible in today's economic and geopolitical rivalries.
/jlne.ws/3yg7ung
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