| October 18, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Cboe to offer single stock options from next month after backing from major participants; Firms including ABN AMRO Clearing, All Options, Barak Market Making B.V, Goldman Sachs, Morgan Stanley, Susquehanna International Securities, and Interactive Brokers, have confirmed their support for CEDX's expansion into equity options.
Claudia Preece - The Trade
Cboe Europe Derivatives (CEDX) has confirmed that it is set to offer single stock options from next month, with equity options available from 6 November, having secured backing from a broad range of participants. Following regulatory approvals, the available products are set to be expanded by the end of Q1 2024, and plans are in place to begin Cboe's Liquidity Provider Programme for all equity options after the March 2024 expiry period.
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Volatility Skew and Options: An Overview
OIC
The concept of volatility skew is not new to options, but it arguably became more pronounced and evident following Black Monday on Oct. 19, 1987, when the Dow Jones Industrial Average lost more than 22% in one trading session.
But what exactly is skew? Skew is the difference between the implied volatility levels of out-of-the-money (OTM), at-the-money (ATM) and in-the-money (ITM) options. Specifically, it measures the implied volatility level for each option strike price with the same expiration month, and the resultant line drawn among these points is referred to as the "skew curve" or "volatility surface."
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Tesla stock options priced for smaller-than-usual move after earnings
Tomi Kilgore - MarketWatch
Traders in Tesla Inc. stock options have prepared for less volatility than usual following the release of the electric-vehicle maker's third-quarter results after Wednesday's closing bell.
An options strategy known as a straddle is priced for the stock to move $13.66 â 5.6% at current stock prices â in either direction on Thursday, according to data provided by Matt Amberson, principal at Option Research & Technology Services.
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Carl Icahn Criticizes Short Sellers at Investor Conference
Yiqin Shen and Crystal Tse - Bloomberg
Carl Icahn criticized short sellers on Tuesday, months after his firm became the target of one. "I think there's a place for short sellers without question but to go out and spread rumors that are basically untrue or close to untrue, there's no place for that," Icahn said at the 13D Monitor Active-Passive Investor Summit. "I think it is unconscionable, and I'm very much against that."
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ETFs viewed as large opportunity by 74% of US asset managers, poll says
Will Schmitt - Financial Times
Exchange traded funds, already thrashing mutual funds in the battle for new investor dollars, are beginning to challenge another bastion of the asset management industry, a survey of US asset managers suggests.
For the first time ETFs have edged out separately managed accounts for institutional clients as representing the largest opportunity among investment vehicles in the monthly survey of product trends by specialist consultancy Cerulli Associates.
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China Is Becoming a Data Black Hole, Short Seller Aandahl Says
Ishika Mookerjee - Bloomberg
China's restrictions on overseas access to data are driving investors away, according to short seller Blue Orca Capital LLC, whose founder says the curbs undermine the investment case for the world's second-largest stock market.
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A Bitcoin ETF Looks Inevitable. Here's the Playbook
Jack Denton - Barron's
was up slightly in the face of macroeconomic headwinds Wednesday, outperforming other risk-sensitive assets on hopes that regulators will approve spot Bitcoin exchange-traded funds.
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There's less to oil-price spike than meets the eye amid Israel-Hamas war worries
www.marketwatch.com
Spiking oil prices can stir investor unease, but global financial markets have largely brushed off war worries, despite the tragic and growing toll of the Israel-Hamas war on human lives.
For that matter, the move in crude oil itself has been relatively muted despite day-to-day volatility, analysts said. Oil futures spiked Wednesday, rising more than 3% at their session peak to trade at their highest since the Oct. 7 Hamas attack on southern Israel. But both Brent crude, the global benchmark, and West Texas Intermediate crude remain under their 2023 closing highs, set in late September.
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| | | | | | Exchanges | | | A New Options Trading Floor Could Be Coming to Miami
Alexander Osipovich - WSJ
Old-fashioned trading floors have been dying off for decades as markets have gone electronic. Now, one company wants to launch a new floor for options trading in Miami.
The company, Miami International Holdings, also known as MIAX, plans to launch the floor in the second half of 2024, subject to approval by the Securities and Exchange Commission. MIAX unveiled its plans Tuesday morning after the SEC posted its application to launch its latest exchange, to be called MIAX Sapphire, which would include a physical trading floor as well as electronic trading systems.
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Miami International Holdings Announces SEC Publishes Notice of Form 1 Application for New Miami-Based MIAX Sapphire Options Exchange
MIAX
Miami International Holdings, Inc. (MIH), owner of Miami International Securities Exchange, LLC (MIAX ), MIAX PEARL, LLC (MIAX Pearl ), MIAX Emerald, LLC (MIAX Emerald ), MIAX Sapphire, LLC (MIAX SapphireTM), Minneapolis Grain Exchange, LLC (MGEXTM), LedgerX LLC (LedgerX), The Bermuda Stock Exchange (BSX), and Dorman Trading, LLC (Dorman Trading), today announced that a notice of its Form 1 application for its newest options exchange has been published by the Securities and Exchange Commission (SEC). MIH filed the Form 1 application to register MIAX Sapphire as a national securities exchange operating both an electronic exchange and physical trading floor for U.S. options.
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Cboe Europe Derivatives Secures Support of Key Participants for Single Stock Options Launch
Cboe
Cboe Global Markets Inc. (Cboe: CBOE) today announced it has secured commitment from of a broad range of participants to support the launch of single stock options on Cboe Europe Derivatives (CEDX), Cboe Europe B.V.'s pan-European equity derivatives exchange. CEDX expects to begin offering equity options from 6 November and plans to broaden its universe of available products by the end of Q1 2024, subject to regulatory approvals.
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New and approved: OCC lines up for future investment
OCC
Earlier this year, OCC received regulatory approval to update our clearing membership criteria allowing banks to apply for membership. OCC's Oberon Knapp, Head of Securities Lending, and Sheila Zak, Executive Director of Member Services, spoke with Securities Finance Times reporter Carmella Haswell about the changes and other enhancements in the works. The article appeared in SFT's magazine for The Risk Management Association's 38th annual Securities Finance & Collateral Management Conference.
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| | | | | | Regulation & Enforcement | | | US SEC proposes banning volume-based trading discounts for stock brokerages
Douglas Gillison - Reuters
Wall Street's top regulator on Wednesday proposed new regulations it said should level the playing field among broker-dealers operating on U.S. stock exchanges by ending pricing schemes that tend to favor bigger players.
At a public meeting in Washington, a divided five-member U.S. Securities and Exchange Commission voted 3-2 to propose banning stock exchanges from offering lower transaction prices and rebates to brokerages with higher trading volumes, something officials said creates unfair competitive advantages for larger firms.
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US Regulator Pledges Harsher Punishment for Wall Street Misdeeds; Top CFTC enforcement attorney lays out policy shift for agency; There will be higher fines and admissions of wrongdoing
Austin Weinstein - Bloomberg
Wall Street firms will soon face stiffer penalties for running afoul of US derivatives rules and more often admit their misconduct when settling with the Commodity Futures Trading Commission. When US regulators, including the CFTC, agree to resolve cases, financial companies are often allowed to pay fines while not admitting to the government's allegations. But the commission's top enforcement attorney, Ian McGinley, said Tuesday that the watchdog will start taking a tougher stance in negotiations.
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Hidden in Plain Sight?
ISDA
More than a decade after the introduction of rules requiring the reporting of all derivatives to trade repositories, some regulators have started to ask questions once again about the level of transparency in the derivatives markets. The trigger has been the sudden emergence of several recent bouts of market turbulence that seemed to have occurred without warning - precisely the type of events the reporting of data was meant to prevent. But, as a recent ISDA paper on transparency points out, a significant amount of information does currently exist that, with sufficient data cleansing and analysis, could help regulators spot warning signals.
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Misaligned T+1 timelines 'a big problem' for global securities industry, says panel; Views come as UK expected to reveal shorter timeframe for T+1 switch than European counterparts.
Chris Lemmon - The Trade
Inconsistent settlement cycles around the world are expected to cause increased disruption to the global securities market, with a panel at InvestOps Europe bemoaning the lack of urgency in certain markets to align to a T+1 cycle. The discussion began with an overview of the settlement landscape around the world, which included the expectation that the UK's Treasury taskforce on T+1 will move forward its timeline and publish its final recommendations, rather than simply initial findings, by the end of this year - potentially pointing to an accelerated timeline for T+1 in the UK.
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SEC Charges Illinois Resident with Insider Trading
SEC
The Securities and Exchange Commission today announced charges against Brian Marc Rubin of Deerfield, Illinois, for insider trading in stock options of Array BioPharma Inc. in advance of an announcement that Pfizer, Inc. was acquiring Array via a tender offer. The SEC's complaint, filed in federal court in Illinois, alleges that Rubin unlawfully traded Array stock options based on material, nonpublic information about the acquisition that he learned about and then misappropriated from his spouse, who worked at Array. The SEC's complaint further alleges that Rubin traded the Array stock options prior to the announcement of the acquisition, and as a result made illegal profits of $90,458.
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| | | | | | Strategy | | | Trend Lines
Cboe (Video)
In #Vol411, Joe Tigay @JoeTigay gives us a market update, lets us know that earnings for $NFLX and $TSLA are coming up and more.
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| | | | | | Miscellaneous | | | Leaders in Trading 2023: Meet the nominees for... Outstanding Exchange Group; Learn more about the four firms shortlisted for The TRADE's 2023 Editors' Choice Award for Outstanding Exchange Group: including Cboe Global Markets, the London Stock Exchange Group, Nasdaq and SIX Swiss Exchange.
Editors - The Trade
First up in our introduction to the distinguished nominees for Leaders in Trading 2023 Editors' Choice Awards, we bring you the shortlist for Outstanding Exchange Group - one of The TRADE's highly coveted and legacy awards for the exchange community.
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The TRADE announces the Rising Stars of Trading and Execution 2023; Running for its ninth year, the Rising Stars initiative recognises the budding buy-side talents of the institutional trading space.
Editors - The Trade
For the first time, The TRADE is announcing the 2023 Rising Stars of Trading and Execution ahead of the gala awards ceremony, Leaders in Trading on 8 November. Now in its ninth year, the Rising Stars awards scheme, in partnership with Instinet, is designed to recognise the very best up-and-coming buy-side trading professionals, and to shine a spotlight on those who have the potential to be the future leaders of the buy-side community.
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