| October 21, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | FIA announces 10 startups selected for 2022 Innovators Pavilion
Futures Industry Association
FIA today announced the 10 startups that have been chosen to exhibit in the 2022 Innovators Pavilion, FIA's annual showcase for fintech startups relevant to derivatives trading and clearing. The Pavilion takes place during FIA's Futures and Options Expo, which brings together traders, brokers and other market professionals from a wide range of firms in the derivatives industry. The conference will be held in Chicago, Nov. 14-15, 2022.
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***** This is a great list of innovators. I can't wait to hear them at EXPO.~JJL
| | | | | | Lead Stories | | | Cboe to launch Treasuries 'dark pool' by year-end; Exchange signs up dealer clients for new venue amid rising concerns around bond liquidity
Bernard Goyder - Risk.net
Cboe Global Markets is readying the launch of its 'dark pool' style interdealer trading venue for US Treasuries and expects the first trades to be completed by the end of this year. Cboe Fixed Income, its first cash fixed income offering, pairs dealers willing to transact anonymously at high volume with minimal information leakage. Cboe registered the on-the-run Treasury platform as a broker-dealer in July and is currently signing up dealer clients and a clearing broker.
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Here's a breakdown of the $2 trillion in U.S. equity options that are expiring on Friday
Joseph Adinolfi - MarketWatch
U.S. stocks are rallying hard on Friday thanks to suggestions the Federal Reserve is contemplating shifting back to smaller interest-rate hikes after the November meeting, according a report in the Wall Street Journal claiming and comments by San Francisco Fed president Mary Daly. But the fact that $2 trillion in U.S. equity options linked to stocks, indexes and exchange-traded funds are expiring â or have already expired â on Friday is also helping to influence trading on what's shaping up to be the best week for the S&P 500 index since at least July. Here's a breakdown of the options that are expiring, according to Rocky Fishman, the head of index volatility research at Goldman.
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Wall Street is driving explosive volatility in stocks by 'YOLO-ing' into options on the brink of expiring
Joseph Adinolfi - MarketWatch
Reddit-loving day traders are reportedly returning to their day jobs, according to the Wall Street Journal, but back in the world of high finance professional traders have adopted one of their signature trading strategies, according to one closely followed markets guru. An explosion of trading volume in options with one, or even zero, days left until they expire is helping to drive the large intraday swings in major U.S. equity indexes that are becoming increasingly common as of late, according to Charlie McElligott, a cross-asset equity derivatives strategist at Nomura.
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Stock Bears Set for Rare Loss Ahead of $2 Trillion Options Event; S&P 500 previously saw negative returns during OpEx weeks; Shift in pattern is latest example of 2022's chaotic market
Lu Wang - Bloomberg
It's a niche trade beloved by retail players and institutional pros that's paid off handsomely this year: Selling equities just before trillions of dollars worth of options expire. Yet this time round, the strategy is backfiring in the latest case of a punishing stock market that's challenging once-reliable playbooks.
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Volatility In Markets Decreases, Dow Drops Around 90 Points
Investing.com
U.S. stocks closed lower on Thursday, as the recent labor market data reinforced prospects of aggressive rate hikes from the Federal Reserve. US initial jobless claims declined by 12,000 to 214,000 in the week ending October 15th, compared to market estimates of 230,000. On the earnings front, IBM (NYSE: NYSE:IBM) reported upbeat quarterly earnings, while AT&T Inc (NYSE: T) boosted its annual profit forecast.
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First Trust launches the FT Cboe Vest Rising Dividend Achievers Target Income ETF
ETF Express
First Trust has announced the launch of its third Cboe Vest Target Income ETF designed to address the need for alternative sources of income. The firm writes that FT Cboe Vest Rising Dividend Achievers Target Income ETF (Cboe: RDVI) provides access to equities contained in the Nasdaq US Rising Dividend Achievers Index while also targeting annualised income. Rising interest rates, low real bond yields, and increasingly positive stock/bond correlations have heightened portfolio risk and created a performance drag, the firm says. RDVI seeks to provide an alternative source of consistent income through a novel Target Income Strategy developed by Cboe Vest Financial LLC ("Cboe Vest"), sub-advisor to the fund and creator of Target Outcome Investments and Target Income Strategies.
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| | | | | | Exchanges | | | Miami International Holdings Announces Acquisition of Dorman Trading, a Full-Service FCM MIAX
Miami International Holdings, Inc. (MIH), owner of Miami International Securities Exchange, LLC (MIAX ), MIAX PEARL, LLC (MIAX Pearl ), MIAX Emerald, LLC (MIAX Emerald ), Minneapolis Grain Exchange, LLC (MGEXTM), and The Bermuda Stock Exchange (BSXTM), announced today that it has completed the acquisition of Dorman Trading, LLC (Dorman Trading), a full-service Futures Commission Merchant (FCM) registered with the Commodity Futures Trading Commission (CFTC). Dorman Trading is a Chicago-based FCM providing execution and clearing services for introducing brokers, retail customers, institutional clients and professional traders.
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How SPX Options Are Taxed (video)
Cboe Global Markets
Scott Bauer breaks down SPX, XSP, Options, Taxes, and CapitalGains.
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Brokers slam CME over 'conflict of interest' in FCM plan; Clearing members question how CME could be quasi-regulator as well as direct competitor
Luke Clancy - Risk.net
Derivatives dealers have blasted CME's decision to formally apply to register as a futures broker, saying the move represents a conflict of interest for the Chicago-based exchange and clearing giant. In August, CME submitted an application with the National Futures Association, which maintains a register of approved clearing members, to become a futures commission merchant (FCM).
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BSE, NSE to conduct one-hour 'muhurat trading' on Diwali; check timings, significance, other details
MoneyControl
While the bourse will remain closed on October 24 for regular trading on account of Diwali and Laxmi pujan, they will remain open for an hour for mahurat trading, a symbolic and old ritual, that has been retained and observed for ages by the trading community.
Marking the closure of old accounting books and beginning of a new Hindu calendar year - Samvat 2079, Indian stock exchanges BSE and NSE will conduct the Diwali 'muhurat trading' on October 24 from 6:15 pm to 7:15 pm. The block deal session will take place from 5.45 pm to 6 pm and the pre-opening session will be held between 6 pm and 6.08 pm, the exchanges said in a circular.
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Hong Kong Exchanges and Clearing : HKEX 2022 Q3 Results
HKEX
HIGHLIGHTS - Nicolas Aguzin, Chief Executive Officer said: "This has been a productive quarter for HKEX with a number of potentially significant strategic initiatives announced or going live. These include the addition of ETFs in Stock Connect, the announcement of the next phase in the Connect franchise - Swap Connect, the establishment of the Hong Kong International Carbon Market Council and a number of new product launches and market enhancements. These are all further exciting building blocks, as we shape the long term sustainable and successful future of our business and our markets.
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| | | | | | Strategy | | | A legendary options trader who banked 70 consecutive months of profits above 6 figures shares the spread he would use in the current stock market environment and explains why it's optimal Laila Maidan - Business Insider
Tony Saliba is an options trader known for maintaining a winning streak by having 70 consecutive months of profits that exceeded $100,000, beginning in the summer of 1982. He began his career in 1979 on the floor of the Chicago Mercantile Exchange. Options trading grabbed the then 23-year-old's attention because it had nonlinear payout opportunities. He could create options spreads, which are contracts to buy and sell a security at different strike prices. This type of trade takes into account dynamic factors beyond just the price of a stock, including the time decay of contracts and the implied volatility of the underlying security. He could then adjust his contracts based on these multiple variables and play both the bullish and bearish markets.
/jlne.ws/3TehhVr
DeFi Options Platform Opyn's 'Crab Strategy' Generates 14% Return in Comatose Ether Market; Opyn's strategy allows investors with little knowledge of options to generate alpha in a sideways market with a single click. However, it's not without risks.
Omkar Godbole - CoinDesk
A decentralized finance (DeFi) product that launched earlier this year to help investors profit from a sideways trending market is generating desired results. The "Crab" strategy, designed by leading DeFi options platform Opyn, is built to make money during bouts of low ether (ETH) price volatility. It has earned 14% returns in U.S. dollar terms and 42% in ether terms since its version (v)2 went live in late July. Ether has dropped 20% since the end of July, however, the cryptocurrency has primarily traded between $1,100 to $1,300 in the past four weeks.
/jlne.ws/3VR6XVp
Sculpting implied volatility surfaces of illiquid assets
Risk.net (paywalled)
Valer Zetocha provides a systematic algorithm to construct a complete, fully consistent implied volatility surface for assets with sparse market option data. The central part of the algorithm is the time-translation of the stock cumulative distribution function that facilitates the generation of non-arbitrageable but market-consistent data for new, non-quoted maturities
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| | | | | | Events | | | FIA Asia Derivatives Conference 29 November 2022 - 1 December 2022 ⢠6:00 PM - 6:00 PM SGT
Futures Industry Association (FIA)
FIA looks forward to welcoming you back to the St. Regis Singapore this coming 29 November to 1 December! We are excited to bring back this event in-person after three long years apart. Asia 2022 will be the gathering point for the Asia-Pacific cleared derivatives community. Get up to speed on regional and global developments, meet with key vendors and build powerful connections. Register by 28 October for the best rates.
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| | | | | | Miscellaneous | | | This Week In Futures Options 323: The Surprising World of Meats
The Options Insider
This Week In Futures Options | Oct 21, 2022 | HOST: Mark Longo, The Options Insider Radio Network
CME/FTSE RUSSELL HOT SEAT: Carley Garner, DeCarley Trading We discuss the movers and shakers in the futures options markets including energy, ags, equities, and much more.
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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
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| | | Jeff Bergstrom
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