| July 14, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Day Traders Chasing Market Rally Are Major Force in Bullish US Stock Options
Elena Popina - Bloomberg
Devil-may-care day traders have become the dominant force in the market for bullish US stock options, as the professional investing class dials back bets after months spent chasing
this year's tech driven melt-up.
Retail investors â those making bite-sized trades of 1 to 10 contacts at a time â almost doubled their activity in single-stock options last quarter from the period before, according to an analysis of Options Clearing Corp. data by Barclays Plc.
/jlne.ws/472b5Yj
European Gas Prices Have Biggest Weekly Loss of the Year
Priscila Azevedo Rocha - Bloomberg
European natural gas prices posted their biggest weekly drop this year as above-average inventories and lackluster demand outweighed concerns about heat waves across the Mediterranean.
Benchmark front-month contracts settled 2.4% lower after jumping earlier in the day, and ended the week 22% lower. This was the asset's biggest loss since December.
/jlne.ws/3pOfgWJ
Don't celebrate the death of inflation yet, Bridgewater's co-chief investor warns
Theron Mohamed - Business Insider
"Inflation has come down but it is still too high, and it is probably going to level out where it is," Bob Prince of Bridgewater Associates told the Financial Times. "We're likely to be stuck around this level of inflation."
Over the last 12 months, price growth has slowed from a 40-year high of 9.1% to a two-year low of 3%, which isn't far off the Federal Reserve's 2% target. The US central bank has raised interest rates from almost zero to north of 5% since last spring to achieve that result.
/jlne.ws/44nR64r
| | | | | | Exchanges | | | Trading VIX vs. VSTOXX around US debt ceiling negotiations
Eurex
Typically, expected volatility expressed by the Volatility Index (VIX) and VSTOXX (V2X) moves in sync as macroeconomic factors similarly impact the US and European economies. However, at times, there are more region-specific events in the US or European markets. It was a while ago, but leading up to the referendum, Brexit was a good example where VSTOXX was elevated versus VIX. The surprise outcome narrowed the spread as VIX moved up to close the gap with VSTOXX.
/jlne.ws/3rv7Msf
SGX Group reports market statistics for June 2023
SGX Group
Singapore Exchange (SGX Group) today released its market statistics for June 2023. Heightened risk-management activity lifted foreign exchange (FX) volume to new records, while commodities volume in the first half of the year surged over the same period in 2022.
Total derivatives traded volume across multiple asset classes climbed 4% month-on-month (m-o-m) in June to 21.3 million contracts, the highest in three months. On SGX Equity Derivatives, equity index futures traded volume gained 2% m-o-m to 13.6 million contracts. The SGX FTSE China A50 Index Futures remained the world's most liquid international futures contract for Chinese equities, with volume steady m-o-m at 7.4 million contracts.
/jlne.ws/3JQ7qmj
2022 Annual Markets Review In Central Counterparty Clearing July 2023
CCP12
The Global Association Of Central Counterparties. Message From The Chairman 2022 Marked Another Year Of Extraordinary Market Volatility. In Particular, The Historic And Tragic Russia-Ukraine War Dramatically Impacted Energy Prices, Especially In Europe, And Inflationary Pressures Drove Interest Rates Significantly Higher Around The Globe.
/jlne.ws/3NNZkfb
| | | | | | Regulation & Enforcement | | | SEC Moves to Tighten Cash Requirements for Brokerage Firms
Kenneth Corbin - Barron's
The Securities and Exchange Commission is proposing to adjust the rules governing how broker-dealers ensure they have enough cash on hand to cover clients' holdings in the event the firm fails.
In a unanimous vote, all five of the agency's commissioners advanced a rule-making proposal that would require broker-dealers to calculate each day how much cash they have in a reserve bank account, an increase from the current weekly calculation schedule.
/jlne.ws/46MASn3
| | | | | | Strategy | | | Carry Traders Fret That Good Times May Be Closer to an End
Malavika Kaur Makol, and Nurin Sofia - Bloomberg
Global carry traders are facing a growing sense of anxiety toward anything that threatens to derail one of 2023's hottest investments.
From the risk of a hawkish Bank of Japan policy shift that may revalue popular funding currency the yen, to a signal in bond markets that the Federal Reserve will hike the US economy into recession, concern is growing among investors that the beneficial low-volatility FX environment may be on its last legs. A return of large swings is often fatal to the strategy of borrowing where interest rates are low and investing in higher-yield, often emerging market currencies.
/jlne.ws/3rsKKCh
How to Trade Low Volatility with Iron Condors
Kai Zeng - tastylive
The world of options is complex and constantly changing, offering traders a variety of strategies and techniques. One of the most popular strategies, the iron condor, is favored in high implied volatility environments. However, with the current market exhibiting its lowest level of implied volatility since the onset of the COVID pandemic, options traders who rely on volatility-selling strategies, such as the iron condor, are facing challenges.
/jlne.ws/3ObTANw
Breakout Week for the Russell
Cboe
In the #RUTreport, @AngieMiles delves into large put and calendar spreads that crossed the tape, P/C ratios, #earnings, and the lack of a summer slump in $RUT #options #trading.
/jlne.ws/44Io5QO
| | | | | | Miscellaneous | | | Maybe the 1970s Inflation Thesis Was Wrong
Tracy Alloway, and Joe Weisenthal - Bloomberg
Whenever something unusual happens in the global economy, you can be sure that two things will follow: a host of commentators will start talking about how extreme the current situation is, while simultaneously reaching for the nearest historic parallel to shore up their preferred forecast.
/jlne.ws/3XQ9Kj0
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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
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| | | Jeff Bergstrom
Editor
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