| September 05, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | FIA announced today that its longtime chief commercial officer, Emma Davey, will step down at the end of the year. Since taking on her position in 2016 following the merger of FIA and the London-based Futures and Options Association (FOA), Emma has overseen the expansion of FIA's conferences and events business while leading the organization's marketing, branding, communications and membership strategy. Emma was critical to FIA's global growth, as well as its increased charitable efforts, including her stewardship of the Futures for Kids charity. ~JJL
In August 2024, CME Group achieved its second-highest average daily volume (ADV) ever, with 31.7 million contracts, reflecting a 31% increase compared to August 2023. This surge was driven by record-setting performances across multiple asset classes. Interest rate contracts led the way with a record ADV of 18.3 million contracts, including an all-time high in U.S. Treasury futures and options at 11.5 million contracts. Specific Treasury records included 2-year (1.6 million contracts), 5-year (2.8 million contracts), and 30-year (708,000 contracts) futures.
SOFR futures and options also saw significant growth, with volume rising 48% to 6.3 million contracts. Equity index contracts reached a record August ADV of 7.5 million contracts, while agricultural contracts hit a record August ADV of 1.6 million, and foreign exchange contracts set a record with 1 million contracts. Notably, metals contracts saw a 43% increase, with metals options up 119% and Micro Gold futures advancing 170%.
Internationally, CME Group reported a record ADV of 8.9 million contracts, including 6.5 million in EMEA (Europe, the Middle East, and Africa) and strong growth in Asia (up 37%) and Latin America (up 18%). Micro products also performed exceptionally well, with Micro E-mini Equity Index futures and options representing 41% of overall Equity Index ADV, and Micro Ether futures reaching a record ADV of 53,000 contracts. Additionally, Micro Bitcoin futures saw a 585% increase, reaching 48,000 contracts.The company's BrokerTec U.S. Treasury notional volume peaked at $249 billion on August 5, and FX Link reached a record single-day volume of $13.5 billion.
Intercontinental Exchange (ICE) reported a 29% year-over-year (y/y) increase in total average daily volume (ADV) and a 16% rise in open interest (OI) for August 2024. Key highlights include a 23% y/y increase in energy ADV, with oil ADV up 21% and WTI futures reaching record open interest of 810,000 lots. Gasoil saw a 5% ADV increase and a 50% OI surge, hitting a record 1.2 million lots. Natural gas ADV grew 23%, with a record 22.4 million lots in futures OI. Environmentals ADV jumped 51%, and financials ADV rose 47%, driven by interest rates ADV, which was up 55%. NYSE cash equities and equity options ADV increased 11% and 27%, respectively.
In August 2024, the Options Clearing Corporation (OCC) reported a total contract volume of 1.067 billion, marking a 4.3% increase compared to August 2023. Equity options saw a 7.4% rise to 556.4 million contracts, while index options grew by 10% to 98 million contracts. In contrast, ETF options experienced a slight decline of 1.2%, totaling 406 million contracts. Futures contracts showed the most significant growth, surging 26.4% to nearly 7 million contracts. Year-to-date average daily volume for 2024 also increased by 6.8% to 47.6 million contracts, reflecting overall growth in trading activity. ~JJL
| | | | | | Lead Stories | | | CBOE Starts Platform for Traders Seeking to Tap Private Markets; CBOE Private Markets registered an alternative trading system; London-based Globacap to provide technology for new venture
Miles Weiss - Bloomberg
CBOE Global Markets Inc. is partnering with a London-based tech firm to create a US trading platform for shares of closely held companies, a traditionally illiquid market that investors have increasingly sought to access.
CBOE Private Markets registered with the Financial Industry Regulatory Authority as a broker-dealer, according to a filing in August - an essential step in setting up a so-called alternative trading system. The new venue will compete with a platform that Nasdaq Inc. spun out in 2021.
/jlne.ws/3XdLJCv
What investors are getting wrong about the VIX right now
Jared Blikre - Yahoo Finance
Thursday marks the one-month anniversary of the Aug. 5 "yen shock" - a mini-market panic that quickly spread throughout global markets after beginning in Japan the Monday following the July jobs report. The Nikkei stock index (^N225) hemorrhaged 12% that Monday - its biggest one-day drop since 1987 - while the S&P 500 (^GSPC) plummeted 3%. The VIX Volatility Index (^VIX) spiked to 65, the third-highest level on record.
/jlne.ws/4gfm45g
Investors Are In a Love-Hate Relationship With the Stock Market; It is hard to allocate assets when everything has done great yet nothing seems worth buying
Jon Sindreu - The Wall Street Journal
Investors can't seem to decide whether they love or hate this market. That isn't necessarily a bad thing. The S&P 500 has so far been pummeled this week, with Tuesday's 2.1% fall being followed by flat Wednesday trading. The malaise has spread beyond the U.S.: Japan's Nikkei 225, the Stoxx Europe 600 and the MSCI Emerging Markets Index all tumbled after the U.S. decline.
/jlne.ws/3X8qIsS
Ether CME Futures Volume Shrinks as ETH ETFs Disappoint, Crypto Market Ducks Risk
Omkar Godbole - CoinDesk
Exchange-traded funds (ETFs) tied to the ether {{ETH}} price debuted in the U.S. late July, opening doors for investors seeking exposure to the cryptocurrency while bypassing the hassle of storing it. Since then, activity in ether derivatives listed on the Chicago Mercantile Exchange (CME) has cooled, according to CCData, a digital assets data provider based in London. Trading volume in ether futures declined 28.7% to $14.8 billion in August, the lowest since December 2023. Volume in ether options fell 37% to $567 million.
/jlne.ws/3ASG25q
Hedge Funds Help Companies Hedge Deal-contingent hedges, T+1 pains, taxi insurance, cell phones, leveraged ETFs and Nanjing-style salted ducks.
Matt Levine Matt - Bloomberg Opinion
Deal-contingent hedges
This is cool: A growing number of hedge funds are helping banks recycle the risks stemming from deal contingent trades, a risky type of derivative that banks sell to corporates and private equity firms looking to hedge financial market moves ahead of the completion of major mergers and acquisitions. At least four hedge funds are active in helping banks offset deal contingent risks, according to industry experts, compared with just one a few years ago. That is helping create a secondary market for the risks stemming from these complex trades and enabling banks to underwrite more - and larger - deal contingent transactions than ever before.
/jlne.ws/3XlLPZ0
Prepare for Volatility, Expect Year-End Rally: Oden
Bloomberg (Video)
Racquel Oden, Head of Wealth and Personal Banking at HSBC, is telling clients to brace for volatility and stay invested in the market. She also predicts at least 75 bps of rate cuts by the end of the year. She speaks to Bloomberg's Sonali Basak, Matt Miller and Katie Greifeld on "Open Interest."
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Opinion: Bulls need a lot of help but the stock market isn't willing to give it
S&P 500 is facing resistance to move higher; 5,370 is the number to watch
Lawrence G. McMillan - MarketWatch
The S&P 500 Index, finally broke out of the trading range that it had been in for nearly three weeks. To the surprise of many, that breakout came on the downside. This leaves a heavy resistance area between 5,560 and 5,650 (red box on the accompanying SPX chart). It's interesting to note that the resistance area is just below the all-time high (5,670). All of this represents a formidable impediment to making new all-time highs. It can still be done, of course, but it's going to be harder than first thought.
/jlne.ws/47cIm3n
| | | | | | Exchanges | | | CME Group to Launch Options on Bloomberg Commodity Index Futures on September 23
CME Group
CME Group, the world's leading derivatives marketplace, today announced that it will launch options on Bloomberg Commodity Index (BCOM) futures on September 23, pending regulatory review. The company also announced that it has extended its license with Bloomberg for commodity index products through 2027.
Options on BCOM futures will provide market participants a new way to access broad market exposure with additional flexibility to express a range of views on commodity market movements.
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FIA outlines how successful derivatives markets will attract investor interest and support the enhancement of the CMU
FIA
FIA, the leading global trade organisation for the futures, options and centrally cleared derivatives markets, has published a paper outlining its views on how to support the progress of the European Union's Capital Markets Union (CMU). FIA's paper - Capital Markets Union at a Critical Juncture - sets out the role that derivatives play in effective capital markets. Specifically, FIA believes that centrally cleared derivatives are a key ingredient to building a strong CMU.
/jlne.ws/3MvsG1F
***** The opposite of cleared derivatives is not uncleared derivatives, but rather chaotic derivatives.~JJL
The Balance: Erin Banks
Cboe
The field of Human Resources encompasses diverse specialties like recruiting, learning and development, performance management, compensation and more, but its essence is all about supporting an organization's people, inside and outside of work.
Erin Banks, Vice President, Talent Management, always had a passion for helping people attain and maximize their strengths. Growing up, Erin was a competitive athlete, even reaching the Junior Olympics in swimming. Outside of the pool, she was obsessed with learning new skills.
/jlne.ws/3XHJEAp
Cboe Global Markets to Present at the Barclays Global Financial Services Conference on
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, announced today that Fredric Tomczyk, Chief Executive Officer, Jill Griebenow, Executive Vice President and Chief Financial Officer, and David Howson, Executive Vice President and Global President, will present at the Barclays Global Financial Services Conference in New York City on Monday, September 9 at 10:30 a.m. ET.
The live webcast and replay of the presentation will be accessible at ir.cboe.com, under Events and Presentations. The archived webcast is expected to be available within an hour of the presentation.
/jlne.ws/4gbuKJH
CME Group Chairman and Chief Executive Officer Terry Duffy to Present at Barclays Global Financial Services Conference
CME Group
CME Group, the world's leading derivatives marketplace, today announced that Chairman and Chief Executive Officer Terry Duffy will participate in a fireside chat at the 22nd Annual Barclays Global Financial Services Conference in New York on Monday, September 9, at 2:45 p.m. Eastern Time.
The presentations will be broadcast live over the Internet and can be accessed on the Investor Relations section of the company's website. Please allow extra time prior to the presentation to visit the site and download the streaming media software required to listen to the Internet broadcast. An audio Webcast will be available for replay at the same address approximately 24 hours following the conclusion of the conference.
/jlne.ws/4euQrD5
| | | | | | Regulation & Enforcement | | | CFTC Staff Issues No-Action Letter Related to Reporting and Recordkeeping Requirements for Fully Collateralized Binary Options
CFTC
The Commodity Futures Trading Commission today announced the Division of Market Oversight and the Division of Clearing and Risk have taken a no-action position regarding swap data reporting and recordkeeping regulations in response to a request from LedgerX LLC d/b/a MIAX Derivatives Exchange LLC (MIAXdx), a designated contract market and derivatives clearing organization.
/jlne.ws/47b0U41
CFTC Issues Order Against Uniswap Labs for Offering Illegal Digital Asset Derivatives Trading
CFTC
The Commodity Futures Trading Commission, as part of its continuing enforcement focus in the digital asset decentralized finance (DeFi) space, today issued an order filing and settling charges against Universal Navigation Inc. d/b/a Uniswap Labs, a Delaware company based in New York. The order finds Uniswap Labs illegally offered leveraged or margined retail commodity transactions in digital assets via a decentralized digital asset trading protocol. The order requires Uniswap Labs to pay a $175,000 civil monetary penalty and to cease and desist from violating the Commodity Exchange Act (CEA), as charged.
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| | | | | | Miscellaneous | | | How Hedge Funds Discover the Next Superstar Trader; How to distinguish between skill and luck.
Tracy Alloway and Joe Weisenthal - Bloomberg
One of the problems in investing or trading is that - to use a common disclaimer - past results are no guarantee of future success. Someone can have a great track record in their stock picks, but maybe they just got lucky. Or maybe they were particularly well-dialed into one market regime that inevitably shifts. Or maybe they're actually just better than other traders. For multi-strategy hedge funds or "pod shops," there's an ongoing battle to hire or train the next great portfolio manager. But how can managers tell who is actually good and who isn't? On this episode of the podcast, we speak with Joe Peta, who was previously the head of performance analytics at Point72 Asset Management and has had a long career in the trading world. He's also an avid fan of sports gambling, and the author of the recent book, Moneyball for the Money Set, which attempts to take some of the talent analytical principles that originated in Major League Baseball and apply them to evaluating portfolio managers. He talks us through the traditional approach funds use to find or create superstars, and how these approaches can be improved upon using more rigorous, quantitative methods.
/jlne.ws/3Tdui3W
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