| June 30, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
|
| | | | Observations & Insight | | | EDITOR'S Note: JLN Options will not be published on Monday, July 3 and Tuesday, July 4 in observance of the Independence Day holiday. Enjoy your weekend! We'll be back on July 5.
| | | | | | Lead Stories | | | Day Trader Rush for Options Propelling Unusual VIX-Stock Swings
Lu Wang - Bloomberg
It's practically a law of markets: when stock prices rise, stock volatility falls. But lately the relationship has been breaking down, and the sleuths are out trying to explain why.
A suspect emerging in the case, according to Citadel Securities, is day traders, who plowed into equity options in the middle of the month. That's right around the time when the S&P 500 and the Cboe Volatility Index were staging unusually strong lockstep moves. So it appears the options-trading spree was big enough to move the volatility gauge or VIX, which uses such contracts to measure the expected price swings ahead for the S&P 500.
/jlne.ws/46ylYAz
Crypto Traders Brace For $7 Billion Bitcoin, Ether Options Expiries
Nina Bambysheva - Forbes
An unusually large expiration of bitcoin and ether options on Friday is likely to increase crypto volatility after bitcoin has spent a week hovering above $30,000. The cryptocurrency has spent the past 12 months below that mark.
A total of 158,774 June, Q2, and H1 bitcoin contracts worth $4.8 billion and 1.23 million ether options of $2.3 billion will expire on Panama-based Deribit exchange, which hosts over 85% of the global trading in these instruments. Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at a certain price within a specific amount of time.
/jlne.ws/44l663b
Singapore Bids Libor Farewell With Surge in SORA Derivatives; Outstanding SORA index swaps jumped to nearly $2 trillion: LCH; Swaps pegged to new rate have risen over 60% from June 2022
Ameya Karve - Bloomberg
Singapore's financial markets have rapidly switched to a new lending benchmark as the city-state joins the world in saying goodbye to the discredited London interbank offered rate. The outstanding value of index swaps pegged to the Singapore Overnight Rate Average - or SORA - climbed to almost $2 trillion at the end of May, more than 60% higher than in June 2022, data from clearing-house LCH Ltd. show. For loans, the total outstanding climbed to S$171 billion ($126 billion) in December, according to the local banking association.
/jlne.ws/3DcYTpX
BlackRock launches its first 'buffer' ETFs for stock-market investors worried about a potential fall
Christine Idzelis - MarketWatch
BlackRock is launching its first "buffer" exchange-traded funds, which are designed to give investors some downside protection in the U.S. stock market as well as potential gains with a cap.
The iShares Large Cap Moderate Buffer ETF IVVM and iShares Large Cap Deep Buffer ETF IVVB can help investors "stay invested during times of market volatility," Rachel Aguirre, head of U.S. iShares product at BlackRock, said by phone. The new ETFs are expected to begin trading on Friday, according to the firm.
/jlne.ws/46ymmz1
Fed's Preferred Gauge Shows Lowest Annual Inflation Since April 2021
Jack Denton - Barron's
The Federal Reserve's preferred measure of inflation came in lower than expected in May, a reassuring sign that the era of red-hot prices is endingâbut likely not fast enough to stop the central bank from continuing to raise interest rates.
The core personal-consumption expenditures price index, also known as the core PCE deflator, rose 0.3% month over month in May, down from 0.4% in April and below expectations of 0.4% among economists surveyed by FactSet. Core PCE rose 4.6% year over year, down from 4.7% in April and also below estimates.
/jlne.ws/46xIwSi
Banks Brace for More Turmoil Heading Into the Third Quarter
Gina Heeb - WSJ
Bank stocks have steadied after a monthslong spiral set off by the failure of three banks. Second-quarter earnings will test whether that moment of relative calm can last.
Investors dumped banks after the collapse of Silicon Valley Bank and Signature Bank in March sparked a crisis of confidence in the system, and short sellers seized on the volatility. The dramatic selloffs continued after First Republic crumbled less than two months later, fueling contagion fears.
/jlne.ws/3ptXJmA
| | | | | | Exchanges | | | Cboe filing shows plans for Fidelity spot bitcoin ETF
Nathan Crooks and Sarah Wynn - The Block
A 19b-4 filing posted by Cboe on its website Thursday shows plans for a Fidelity spot bitcoin ETF.
Called Wise Origin Bitcoin Trust, FD Funds Management LLC is the sponsor of the Trust. Fidelity Digital Assets Services will be responsible for custody of the trust's bitcoin, according to the filing.
/jlne.ws/3NS2P5t
Fidelity spot bitcoin ETF application refiled with U.S. SEC
Reuters
Asset manager Fidelity is once again seeking to list and trade shares of its Wise Origin Bitcoin Trust spot bitcoin exchange-traded fund, according to a filing by listing exchange Cboe Global Markets (CBOE.Z) with the U.S. Securities and Exchange Commission.
Fidelity is one of several big asset managers that have applied to list bitcoin ETFs recent weeks. BlackRock (BLK.N), WisdomTree (WT.N), Invesco (IVZ.N) and VanEck also submitted paperwork for spot bitcoin ETFs on Cboe BZX, Nasdaq (NDAQ.O) and NYSE Arca, which is owned by Intercontinental Exchange Inc (ICE.N).
/jlne.ws/3pmrcPr
SEC Pushes Back Against Fidelity, BlackRock (BLK) Spot Bitcoin ETF Filings
Katherine Doherty and Lydia Beyoud - Bloomberg
The US Securities and Exchange Commission is pushing back against a wave of filings by asset managers to launch the first US exchange-traded fund that invests directly in Bitcoin, saying the applications lack clarity and further information is needed before they're considered for approval.
The agency told exchanges including Nasdaq and Cboe Global Markets, which filed the applications on behalf of BlackRock and Fidelity Investments, that their filings are insufficient, according to people familiar with the matter. A Cboe spokesperson confirmed that it will refile on the behalf of Fidelity. Nasdaq is working to answer questions and give updates for its next iteration of the filing.
/jlne.ws/44tF35l
CME Group to Launch Ether/Bitcoin Ratio Futures on July 31
CME Group
CME Group, the world's leading derivatives marketplace, today announced plans to launch Ether/Bitcoin Ratio futures on July 31, pending regulatory review.
/jlne.ws/46rwQAi
| | | | | | Regulation & Enforcement | | | SEC spells out bitcoin ETF concerns to asset managers
Carolina Mandl - Reuters
The U.S. Securities and Exchange Commission (SEC) has said recent applications by asset managers to launch spot bitcoin exchange-traded funds (ETFs) were not sufficiently clear and comprehensive, a source familiar with the matter said.
The SEC has communicated its concerns to the exchanges Nasdaq (NDAQ.O) and Cboe Global Markets (CBOE.Z) which filed the applications on behalf of asset managers including BlackRock (BLK.N) and Fidelity, the source added on Friday.
/jlne.ws/3JFXMme
Statement of Commissioner Caroline D. Pham on Enforcing Federal Position Limits
CFTC
I support the Commission's Order instituting proceedings, making findings, and imposing remedial sanctions against Challenger Life Company Limited, for exceeding the CFTC's established Federal spot-month speculative position limit for the New York Mercantile Exchange's (NYMEX) April 2022 Platinum futures contract, and for exceeding the NYMEX delivery limit for the April 2022 and May 2022 Platinum futures contracts. It is the first CFTC enforcement action under the CFTC's 2021 final rule that implemented new Dodd-Frank Act authority to establish Federal speculative position limits for 16 additional agricultural, metals, and energy commodities and certain derivatives contracts related thereto ("2021 Final Rule").
/jlne.ws/3CQPXGf
CFTC Division of Enforcement Creates Two New Task Forces; One Team Will Address Cybersecurity and Emerging Technology, Another to Combat Environmental Fraud
CFTC
The Commodity Futures Trading Commission's Division of Enforcement today announced it has established two new task forces. The Cybersecurity and Emerging Technologies Task Force will address cybersecurity issues and other concerns related to emerging technologies (including artificial intelligence). The Environmental Fraud Task Force will combat environmental fraud and misconduct in derivatives and relevant spot markets. The task forces are comprised of attorneys and investigators across different offices within the Enforcement Division, who will prosecute cases, serve as subject matter experts, and coordinate efforts with the CFTC's other divisions and offices.
/jlne.ws/3NQFrFs
| | | | | | Strategy | | | The Stock Market Rally Is Getting Scary. What to Buy Instead of Holding Cash.
Jacob Sonenshine - Barron's
The stock market has gotten more expensive, in a rally that has expanded to include stocks beyond Big Tech.
That has left many stocks looking less attractive, forcing some investors to cash out while they wait to grab shares at better prices. There is, however, a basket of equities that does look attractive.
/jlne.ws/3XvbC0r
How hedge funds plan to trade the second half of 2023
Nell Mackenzie, Carolina Mandl and Summer Zhen - Reuters
For hedge funds, the second half of 2023 is all about pouncing on the ways in which inflation, aggressive rate hikes and decarbonisation are shaping the economy. Major central banks have collectively raised rates by more than 3,750 basis points since September 2021, and while the pace has eased, the world economy has yet to feel the full effect.
/jlne.ws/3JG3vIG
The Lowest Lows
Cbeo (News)
In #Vol411, Dan Deming @Djd551 lets us know that the $VIX Index is around the 13.10 level today, the $SPX Index is around the 4448 level today, low volatility is pulling down #VIX #futures and more.
/jlne.ws/439mgep
| | | | | | Miscellaneous | | | Libor Is Over. We Still Need More Benchmarks to Replace It.
J. Christopher Giancarlo and Bruce Tuckman - Barron's
Today marks the end of the London interbank offered rate. Libor, as it's better known, has been the world's dominant interest rate benchmark over the last 40 years. Libor's demise happens to coincide with a challenging environment for U.S. regional and smaller banks and is an opportunity to reflect on what should come next. We believe that regulators should not insist on replacing the one-size-fits-all Libor regime with another one-size-fits-all benchmark.
/jlne.ws/3NU4oQ9
| | | | | | | | | JLN Options is sponsored by: | | | | | | | | | | | | | | | | | | | |
|
|
| | | |
| | | | 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
Editor-in-Chief
| | | Jeff Bergstrom
Editor
| | | Asma Awass
Intern |
|
|
Disclaimer: All John Lothian Newsletters, JohnLothianNews.com, MarketsWiki.com and MarketsReformWiki.com are products of John Lothian News, a division of John J. Lothian & Company, Inc. The opinions expressed in all John J. Lothian & Company, Inc. publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers. Futures and options trading involve risk. Past results are no indication of future performance. Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any website or newsletter content.
© 2023 John J. Lothian & Company, Inc. All Rights Reserved. |
|
|
