| April 24, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Cboe Global Markets Launches 1-Day Volatility Index, Designed to Measure Volatility Over Current Trading Day
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced the launch of the Cboe 1-Day Volatility Index (VIX1D). Developed by Cboe Labs, the company's in-house innovation hub, the VIX1D Index seeks to measure the expected volatility of the S&P 500 Index over the current trading day (today); in other words, single trading day volatility. Similar to the Cboe Volatility Index (VIX Index), the VIX1D Index estimates expected volatility by aggregating the weighted prices of P.M.-settled SPX (SPXW) options with one- to zero- day expirations over a wide range of strike prices.
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New Wall Street 'fear gauge' to track short-term market swings; Cboe set to launch 1-day Volatility Index in biggest change to Vix in years
Nicholas Megaw - Financial Times
The Vix - the volatility index popularly known as "Wall Street's fear gauge" - is going through its biggest shake-up in years with the creation of a new version that will track expectations of short-term market swings. The 1-day Volatility Index - or Vix1d - which will be launched by exchange group Cboe on Monday, is a response to a recent transformation in derivatives markets that had sparked concerns about the effectiveness and relevance of the original Vix.
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Options Trading Hits 50-Year Mark; Can Industry Innovation Help More Investors Grow Their Wealth?
Investor's Business Daily
Options trading in the U.S. hits a milestone this month as the Chicago Board Options Exchange (Cboe) marks its 50th anniversary on April 26. A lot has changed over the decades since that pioneering exchange introduced contracts to buy or sell 100 shares of stock at a fraction of the price of the underlying security.
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Geopolitics Risks Inflation Volatility, ECB's Panetta Warns
Andrew Langley - Bloomberg
Global political frictions could bring turmoil for economic growth and inflation, European Central Bank Executive Board member Fabio Panetta warned.
"Geopolitical shocks may trigger persistent output and inflation volatility, with multiple spillovers," Panetta said Monday in a speech, cautioning that so-called fragmentation may affect ECB monetary policy.
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A Fed Pause Is Coming. Stocks May Not Rally When It Arrives.
Jacob Sonenshine - Barron's
The long-anticipated pause in the Federal Reserve's interest-rate increases is almost here. The actual news isn't likely to bring about a surge in stock prices.
The central bank is making progress in its effort to rein in inflation by raising rates to reduce demand for goods and services. Policy makers want inflation to keep falling, but they don't want to hurt the economy too badly, and it isn't clear how much damage is still to come from the nine rates increases they have rolled out over the past year.
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Volatile markets increase appeal of ETFs with a buffer
Steve Johnson - Financial Times
Financial markets may have hit the buffers last year, but this did make one type of investment a lot more popular: buffered exchange traded funds.
Also known as defined outcome funds, these ETFs use derivatives to give their investors a degree of downside protection, or buffer, if the market falls. In return, investors give up some of their potential gains, by having them capped â and the proceeds from doing this are used to buy the downside insurance.
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Funds ignore Wall Street's resilience, most bearish since 2011
Jamie McGeever - Reuters
Hedge funds remain unconvinced by Wall Street's recovery from the March banking shock and have instead amassed their biggest bet in over a decade that the S&P 500 (.SPX) will fall.
Commodity Futures Trading Commission (CFTC) data for the week ending Tuesday, April 18 show that funds and speculative accounts increased their net short position in S&P 500 index futures by 36,645 contracts to just over 680,000 contracts.
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| | | | | | Exchanges | | | MIAX Exchange Group, Options and Equities Markets, launched a new email address domain name and website on April 22. The new website, MiaxGlobal.com, can be viewed here. Any related email addresses have been updated to include the new domain @miaxglobal.com. ~SAED
OCC Readies for 41st Options Industry Conference, 50th Anniversary
Anna Lyudvig - Traders Magazine
The 41st annual Options Industry Conference will take place on April 26-28, 2023 at the Grand Hyatt, Nashville, TN. The premier event focuses on the key topics facing the options industry, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe. "We hope that the Options Industry Conference will serve as a forum for the industry to connect, learn and engage on the topics impacting the options market today," said Dan Busby, COO, OCC.
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CME Group Completes Key Milestones in Conversion of Eurodollar Futures, Options and Cleared Swaps to SOFR-Based Derivatives
CME Group
CME Group, the world's leading derivatives marketplace, today announced that it successfully converted 7.5 million contracts of Eurodollar futures and options open interest and $4 trillion in cleared USD LIBOR swaps to corresponding SOFR derivatives in April.
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CBOE Origin Remembrances: Ed Tilly
Lawrence G. McMillan - Option Strategist
Ed Tilly is the current Chairman and Chief Executive Officer of CBOE Global Markets, after having taken over from Bill Brodsky as CEO in 2013 and Chairman in 2017. Ed began his career as a stock clerk on the CBOE trading floor in 1987, then became a member as a market-maker in 1989, before electing to move into CBOE's "front office" full time in 2006. I spoke with Ed recently to get some of his thoughts on his career at CBOE.
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****** Lary McMillan, I am going to have to get into the option strategy business if you are going to start to do career retrospectives. :-)~JJL
CME plays down rival to LME nickel market; Chief executive Terry Duffy says UK group has 'a lot of issues'
Nikou Asgari - Financial Times
CME Group, the world's largest derivatives exchange, said it is not planning to launch a nickel contract to rival the London Metal Exchange, despite its chief describing the LME as having "a lot of issues". "I'm not working on listing a nickel contract," Terry Duffy, chair and chief executive of the Chicago-based group, told the Financial Times, adding "never say never" but that launching an alternative would be difficult.
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***** Terry Duffy doing his very best Sean Connery/James Bond impersonation, "Never say never."~JJL
Gemini's Plan for Derivatives Exchange Adds to Crypto's Flight From the US; Crypto company Gemini to set up a non-US derivatives exchange; Tightening US SEC digital-asset clampdown rattled many firms
Suvashree Ghosh - Bloomberg
Crypto businesses in the US are pursuing targeted international expansion amid a deepening regulatory crackdown at home. The latest moves came from billionaire twins Tyler and Cameron Winklevoss' Gemini Trust Co. The exchange last week unveiled plans to target growth in Asia and to establish a non-US crypto derivatives platform.
/jlne.ws/43RTSz7
The Startup That Lets Hedge Funds Bet Millions on Real-Life Events; Kalshi raised a bet limit to $7 million to woo pro traders; Firm also bolstering bid for approval on US election betting
Lydia Beyoud - Bloomberg
With its bid to let Americans wager on elections put on ice by federal watchdogs, Kalshi Inc. is now shopping a plan to let hedge funds easily wager millions of dollars on more real-life events. The upstart New York-based derivatives exchange has been quietly laying the groundwork with trading firms and desks for months.
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| | | | | | Regulation & Enforcement | | | Brokers Should Take Care Before Recommending Risky Products, SEC Staff Says; SEC issues new guidance for investment advice obligations; Money managers, brokers can still suggest crypto, derivatives
Lydia Beyoud - Bloomberg
A top US financial regulator said money managers and brokers should consider whether there are alternatives to complex or risky products like digital assets or derivatives before recommending them to retail clients. That doesn't mean they can't suggest those products or others that the SEC considers risky for retail traders - like inverse or leveraged exchange-traded funds.
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Doctor in $150 Million Covid Relief Scam Blew It on Bad Trades, US Says
Joe Schneider - Bloomberg
A California doctor accused of scamming Covid relief programs of more than $150 million lost most of the money with bad options trades, according to the US Justice Department. Dr. Anthony Hao Dinh, 63, engaged in high-risk options trading with the proceeds of his alleged fraud, and he lost more than $100 million in less than a year and a half - from November 2020 to February 2022, an FBI agent said in an affidavit seeking an arrest warrant. The April 10 complaint was unsealed Thursday by a magistrate judge in Los Angeles federal court.
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Regulators get tough on crypto funds after FTX collapse
Scott Chipolina - Financial Times
Providers of crypto exchange traded funds are struggling to establish their products as viable investments, according to regulatory experts, as a crackdown on digital assets continues.
Crypto markets endured a year of acute turbulence in 2022 when the price of popular digital assets, such as bitcoin and ethereum, plummeted from record highs. These sudden falls plunged several once-prominent firms â including lending platform Celsius Network and crypto hedge fund Three Arrows Capital â into bankruptcy.
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| | | | | | Strategy | | | Funds add to bullish bets in CBOT corn, meal before late week sell-off
Karen Braun - Reuters
Speculators have recently restored some of the Chicago grain and oilseed optimism that they sharply reduced in early March, though heavy price pressure late last week may have once again sent some longs toward the exit.
In the week ended April 18, money managers increased their net long position in CBOT corn futures and options to 49,434 contracts from 27,112 a week earlier, marking their most bullish corn view since Feb. 28.
/jlne.ws/3LqQeVy
The VIX Turns 30
Cboe (Video)
Joel Hawthorne @louiswinthrop talks about the most active index & equity #options, the 30th anniversary of the $VIX Index, today's launch of the 1-Day Volatility Index and upcoming economic data releases in today's #Vol411. $SPX #VIX1D #Cboe50
/jlne.ws/3oKbzQM
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| | | Jeff Bergstrom
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