| March 03, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Clueless Wall Street Is Racing to Size Up Zero-Day Options Boom; BofA pushes back on JPMorgan's "Volmageddon 2.0" warning; Peter Tchir pens a story on 0DTE's life and picks a theme song
Lu Wang - Bloomberg
It's a time-honored tale. A new force enters the market - quantitative easing, leveraged ETFs, high-frequency trading - and a cottage industry on Wall Street is born devoted to exposing the risks it supposedly poses for investors. Now it's happening again with a new breed of high-octane stock options known as zero-day-to-expiration, or 0DTE, which allows investors to buy and sell with contracts that have a shelf life of less than 24 hours. Everyone from amateur sleuths on Reddit to highly paid Wall Street technicians have joined the fray, dispensing daily theories about how big a threat these quick-trigger instruments pose.
/jlne.ws/3J9gsuv
Citadel Securities Eyes OTC Options to Boost Market-Making Clout
Miles Weiss - Bloomberg Law
Citadel Securities, a pillar of billionaire Ken Griffin's market-making and hedge fund empire, is seeking a foothold in a corner of the options world traditionally dominated by global banks. A unit of the firm is applying to become an over-the-counter derivatives dealer under a 1998 Securities and Exchange Commission rule intended to help broker-dealers compete with banks and foreign firms, filings show.
/jlne.ws/3SQUAHQ
6 reasons why the stock market is poised to see its strongest rally of 2023 over the next 2 months, according to Fundstrat
Matthew Fox - Business Insider
He highlighted that the sell-off in stocks that started during the second half of February is following a historical playbook that typically leads to strong gains in March and April, and per usual, investors are not prepared for the potential upside ahead.
"This is a scenario that many investors are hesitant to embrace because of the understandable lack of clarity on inflation trajectory, Fed policy path, earnings risk and general heightened concerns about recession," Lee said in a Friday note.
But there are plenty of reasons why investors should drop their tendency to lean bearish amid all of the uncertainty, according to Lee.
/jlne.ws/3IN0lRZ
Inflation has yet to peak in most G-10 countries and 'we are waiting for a proper market reality check': BofA
Vivien Lou Chen - MarketWatch
"The inflation genie is still out of the bottle."
Those are the words of strategists Claudio Piron and Athanasios Vamvakidis at BofA Securities, who said on Friday that inflation has yet to peak in most Group-of-10 countries and that "we are waiting for a proper market reality check."
/jlne.ws/3ZyEAMy
Are Investors Getting Tired of Buying the Dip?
Gunjan Banerji - WSJ
Investors are pulling money from domestic equity funds at a pace not seen in almost seven years.
Domestic equity funds, which invest the majority of their assets in U.S. securities, have recorded nine consecutive weeks of outflows, the longest stretch since June 2016, according to a Journal analysis of Refinitiv Lipper data.
/jlne.ws/3SLB0wi
| | | | | | Exchanges | | | Intercontinental Exchange Reports February 2023 Statistics
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology and market infrastructure, today reported February 2023 trading volume and related revenue statistics, which can be viewed on the company's investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet. February highlights include: Record commodity futures and options open interest (OI) of 50.7M contracts on February 22; Energy OI up 6% y/y, including record OI of 46.8M contracts on February 22; Total Natural Gas OI up 14% y/y North American natural gas ADV up 4% y/y; OI up 18% y/y, including record U.S. basis futures OI of 10.1M contracts
/jlne.ws/3ZlJ0XE
| | | | | | Regulation & Enforcement | | | SEC Chair Gensler Says Crypto Exchanges May Not Be 'Qualified Custodians'
Christy Goldsmith Romero - Coindesk
U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler pushed back on the idea that crypto exchanges could be safe qualified custodians for investment advisers.
Speaking at an Investor Advisory Committee meeting Thursday, Gensler said a recently proposed rule directing investment advisers to look to qualified custodians for storage of assets - including cryptocurrencies - makes "important enhancements" to existing protection rules. He also said crypto exchanges should not be considered safe under those guidelines.
/jlne.ws/3ybrg5e
| | | | | | Strategy | | | A Window Is Opening for Stocks to Rally. Here's How Long It Will Last and Why.
Angela Palumbo - Barron's
Momentum on Wall Street has slowed from the beginning of the year, with a strong start to 2023 turning into multiple weeks of volatile trading as jobs and inflation data have come in hotter than expected.
The Dow Jones Industrial Average this year has fallen 3.8% from its closing high on Jan. 13, according to Dow Jones Market Data. The S&P 500 and Nasdaq Composite both hit 2023 highs on Feb. 2. The S&P has fallen 4.8% since then, while the Nasdaq has declined 6.1%.
/jlne.ws/3EUUTM2
Huge June Call Spread
Cboe (Video)
Dan Deming @djd551 on some big $VIX #options trades and the state of implied & realized #volatility in today's #Vol411.
/jlne.ws/3Jep0AE
| | | | | | Miscellaneous | | | How the World's Wealthiest Invest Their Money: Knight Frank Survey
Pete Syme - Business Insider
Have you ever wondered how the world's wealthiest people invest their millions?
On March 1, Knight Frank published 2023's "Wealth Report," which details the finances of ultra-high net worth individuals or UHNWIs.
/jlne.ws/3ZlBmwn
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