| January 31, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Futures Discovery: Fundamentals of Margin Calls
JohnLothianNews.com
In episode 5 of Futures Discovery, we're peeling back the layers of the ever-important world of margin calls-a topic that can shape the flow of your futures trading journey. In this episode, we're not just scratching the surface; we're delving deep into the fundamentals of margin calls. It's not just about numbers on a screen; it's about deadlines, volatility, and potential lifelines.
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Long Put, Buying Put Options - Term of the Week
JohnLothianNews.com
This video explores the basics of a long put option contract.
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| | | | | | Lead Stories | | | Ether options trading volume hits all-time high as price sits around $2,300
Brian McGleenon - The Block
Ether options trading volume across major cryptocurrency derivatives exchanges has hit an all-time high, according to The Block's Data Dashboard.
The metrics from crypto derivatives exchanges indicate that the total trading volume for ether options has surged to nearly $20 billion in January, and there is still one day remaining in the month. Around $15 billion of this trading volume comes from activity on the Deribit derivatives exchange.
/jlne.ws/48YDBKW
How the Launch of Spot ETFs Could Dampen Bitcoin's Volatility; The approval of a wave of bitcoin exchange-traded funds will lead to a more mature market structure, say Vivek Chauhan and David Lawant, of FalconX.
David Lawant, Vivek Chauhan - CoinDesk
One of the critical ingredients for Bitcoin's success has been the emergence of new trading infrastructure and investment wrappers that open access to new investors. This trend is now in overdrive with the recent launch of spot BTC ETFs.
Beyond the circles of liquidity providers and trading desks, we haven't quite appreciated how these monumental changes will change the Bitcoin market structure.
We can expect reduced inherent volatility as this market structure matures. Here, we will explore how a couple of important shifts associated with the launching spot ETFs are poised to facilitate this change.
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Is $203 Trillion In Derivatives Held By Goldman Sachs, JPMorgan And Other Top Banks Causing an 'Everything Bubble?'
Caleb Naysmith - Benzinga
The scale of derivatives held by major banks like JPMorgan Chase & Co., Citibank and Goldman Sachs, amounting to $203 trillion, has raised concerns about the potential risks these positions might pose to the global economy. The third-quarter Quarterly Report on Bank Trading and Derivatives Activities, published by the Office of the Comptroller of Currency, provides a comprehensive dive into this issue. This figure surpasses the world's gross domestic product (GDP) by roughly double, highlighting the enormity of the market. JPMorgan Chase, in particular, is noted for its substantial exposure to derivatives risk, topping the list with roughly $58 trillion in derivatives. The mounting scale of derivatives owned by banks raises several questions and concerns among regulators and investors.
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Fed Meeting Today: Stocks Lower After Fed Leaves Rates Unchanged
WSJ
This Fed day is about future Fed days.
Stocks were extending their declines after Fed Chair Jerome Powell said during a press conference that "we still have a ways to go" on achieving a soft landing of the economy. The comments came after central bank officials left rates unchanged as expected, and signaled rate cuts are possible but not imminent.
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Investors are too overconfident that inflation is dead after a 'miraculous' drop, investment chief says
Aruni Soni - Markets Insider
We're not done fighting inflation â and that's something investors are missing, according to PGIM investment chief Greg Peters.
If inflation isn't fully tamed, that could cause a lot more volatility in the markets as traders recalibrate their expectations of when the Fed will cut rates â something that has already caused a hiccup in markets this year.
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US bitcoin ETFs raise questions over broader financial system risks
Elizabeth Howcroft and Hannah Lang - Reuters
The launch of U.S. exchange-traded funds (ETFs) tracking bitcoin deepens ties between the volatile world of cryptocurrencies and the traditional financial system, potentially creating unforeseen new risks, some experts say.
The Securities and Exchange Commission (SEC) this month approved 11 spot bitcoin ETFs from issuers including BlackRock (BLK.N), opens new tab and Invesco/Galaxy Digital, in a watershed moment for a crypto industry dogged by bankruptcies and crime.
/jlne.ws/4bjUPDV
China Stocks Sink to Five-Year Low as Traders Unwind Rescue Bets
Bloomberg News
A selloff in Chinese stocks deepened, with a key index falling to a five-year low and wiping out all the gains that it made last week on optimism over stronger support measures by the authorities.
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| | | | | | Exchanges | | | CME to Launch FX Spot+ After Restructuring FX Business; FX Forwards Move Toward Clearing Mandate
Shanny Basar - MarketsMedia
In December last year CME Group said it is launching an all-to-all spot foreign exchange market to connect cash market participants with the exchange's FX futures liquidity. CME FX Spot+ is expected to be made available for client testing during the second half of this year. Paul Houston, global head of FX Products at CME Group, told Markets Media: "FX futures and options and the EBS platforms are all on Globex, which is the CME Group technology infrastructure. The collective strength of the businesses can offer more to customers, enable us to be more streamlined and innovate across cash and derivatives FX."
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German derivatives exchange Eurex to appoint ABN Amro's Booij as chief; Dutch banker set to be named head of Europe's largest futures marketplace
Costas Mourselas and Nikou Asgari - Financial Times
Eurex, Europe's largest derivatives exchange, will name Dutch banker Robbert Booij as its new chief executive, according to two people with knowledge of the matter. Booij is currently chief executive for Europe at ABN Amro Clearing Bank, a division of the Dutch bank that connects trading firms and hedge funds with exchanges such as Eurex. An announcement could come as soon as Wednesday, the people said.
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Xetra ETF statistics 2023: Bond ETFs and active ETFs in an upward trend.
Deutsche Boerse Group
Invested assets in the ETF segment on Xetra rise by 26 percent to a new record of 1.29 trillion Euro. Continued high listing activity expands product range by 123 to 2,125 ETFs. Xetra remains Europe's largest ETF exchange in terms of product number and trading volume. The market for exchange traded funds (ETFs) on Xetra continued to record high investor interest last year: with an increase of 26 percent to 1.29 trillion. Euro, ETF fund assets reached a new high (2022: 1.02 trillion euros). During the same period, the product range on Xetra increased by 123 ETFs to a new record of 2,125 ETFs (2022: 2,002 ETFs). The ETF trading volume declined across Europe last year against the background of overall lower market volatility and amounted to 169.5 billion euros for Xetra (2022: 232.8 billion euros). Xetra was once again the ETF trading venue with the highest turnover among all European stock exchanges.
/jlne.ws/48UkmlD
Sucden Group Selects ICE to Support OTC Derivatives Pricing, Trading and Risk Management
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that Sucden Group (Sucden), a leading soft commodities trading firm, has selected ICE's Portfolio Analytics platform to support pricing, trading and risk management of derivatives products. As Sucden continues to expand its global trading and investment activities, it will use ICE Portfolio Analytics to support its real-time pricing, trading and risk management of derivatives. ICE Portfolio Analytics offers streaming market data and analytics, which include access to pricing and analytics solutions for vanilla and exotic OTC products across asset classes, giving Sucden the ability to price and monitor their exposure on an intraday basis.
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| | | | | | Regulation & Enforcement | | | Joint industry response to European Commission's Call for Feedback on BMR
FIA
FIA has submitted a joint response with GFMA and ISDA to the European Commission's Call for Feedback on the review of the scope and regime for non-EU benchmarks. The response sets out the associations' comments on the EC's proposal, along with potential draft amendments where possible, and some additional revisions that are considered to support the EC's aims.
In summary, the associations welcome the EC's recognition of the problems caused by the current drafting of the Benchmarks Regulation (BMR) and the careful thought and consideration that has been given to addressing them. They strongly support the aim of establishing a third-country regime that is sustainable in the long term once the current transitional regime expires, and overall consider that the proposal will result in a more proportionate regime for users and administrators of benchmarks that still provides vital protections.
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| | | | | | Strategy | | | If Trump Wins, the Market Could Skyrocket. Be Ready for Anything. The derivatives market is pricing the November election as a tumultuous market event. This trade wins if stocks move sharply up or down.
Steven M. Sears - Barron's
Investors should prepare for Donald Trump to be elected president in November. The anger of the electorate that propelled his 2016 victory has increased since he narrowly lost to Joe Biden in 2020.
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Opinion: 'The cautionary signals are off the charts.' Ominous warnings point to a market correction - particularly in tech
Michael Brush - MarketWatch
Investors and traders take warning. The market looks vulnerable to a pullback. That's the message from corporate insiders' trading activity. So far this year they're buying less and selling more of their own company shares â particularly in tech.
"The cautionary signals are off the charts," says Richard Cuneo, who tracks insider activity at Vickers Insider Weekly published by Argus Research Group.
/jlne.ws/42k3lP4
Fast exact joint S&P 500/VIX smile calibration in discrete and continuous time; An arbitrage-free model for exotic options that captures smiles and futures is presented
Florian Bourgey and Julien Guyon - Risk.net
Florian Bourgey and Julien Guyon introduce a novel discrete-time-continuous-time exact calibration method. They build an S&P 500/VIX jointly calibrated discrete-time model, which they later extend to continuous time by martingale interpolation. The benefit of this technique is that both steps can be made much faster than the known methods that calibrate a continuous-time model directly
/jlne.ws/3vXJvgF
| | | | | | Events | | | OptionMetrics Sponsoring 2024 Asset Management Derivatives Forum in February
Press Release - BusinessWire
OptionMetrics, an options database and analytics provider for institutional investors and academic researchers worldwide, is sponsoring and exhibiting at the Asset Management Derivatives Forum 2024 in Dana Point, California, February 7-9. The conference attracts senior market professionals to discuss the latest in the global derivatives industry. OptionMetrics will showcase its historical equity and futures options and implied volatility data.
/jlne.ws/3OoAG5T
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