| September 27, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
|
| | | | Observations & Insight | | | A recent study by Elm Partners Management, titled "When a Crystal Ball Isn't Enough to Make You Rich," revealed that even with advanced knowledge of major economic events such as Federal Reserve decisions, traders struggled to consistently profit, Bloomberg reported. The study involved participants with varying levels of financial experience who were given early access to key economic news before placing their trades. The results showed that even seasoned traders only correctly predicted market directions 63% of the time, while amateur traders fared worse, often losing money due to poor leverage and trade sizing decisions. The study underscores the difficulty of beating the market, even with inside information, and highlights the efficiency of the financial markets. ~JJL
| | | | | | Lead Stories | | | Execution Prices Across Retail Option Brokers Vary Significantly
Anna Lyudvig - Traders Magazine
Wholesalers create differential option pricing by not only systematically varying execution methods, but also the pricing within each method, according to a new research paper.
The paper titled "Some Anonymous Options Trades Are More Equal than Others" compared retail option trade execution by placing simultaneous market orders across six brokers.
/jlne.ws/3Y0gTyV
Bitcoin spot ETF options could potentially impact demand for the underlying asset, analysts say
Brian McGleenon - The Block
The recent approval by the U.S. Securities and Exchange Commission (SEC) for BlackRock to list and trade options for its spot Bitcoin exchange-traded fund, the iShares Bitcoin Trust ETF (ticker: IBIT), has added a new layer of complexity to the cryptocurrency landscape, analysts say.
CryptoQuant analysts have raised a crucial question: Could this shift lead to decreased demand for physical Bitcoin as more institutional traders turn to "paper" derivatives instead of directly investing in spot bitcoin ETFs?
/jlne.ws/3XLSHir
Wall Street's ETF Assets Hit $10 Trillion Milestone; 2024 saw $691 billion in inflows so far, amid the market rally; ETF ecosystem hit the $1 trillion milestone just 14 years ago
Isabelle Lee - Bloomberg
Assets held by exchange-traded funds in the US hit $10 trillion for the first time as the investor-friendly products continue their relentless takeover of Wall Street. A combination of inflows and market gains carried total assets over the milestone this week, according to data compiled by Bloomberg Intelligence. Investors have poured $691 billion into the funds this year, as US stock gauges have notched repeated records.
/jlne.ws/4eibk4E
State Street Global Advisors gears up for new ETF disruption; Senior executive says strategy not only takes in private asset potential, but structured products and wealth management
Steve Johnson - Financial Times
State Street Global Advisors may have filed the first application to launch an exchange traded fund that would invest in illiquid, hard-to-value private assets, but Matteo Andreetto is focused on faster ETF growth elsewhere. SSGA's head of intermediary client coverage, Europe, said ETFs are poised to disrupt the lucrative structured products industry globally, while rolling out ranges of branded funds for big wealth managers is "top of my agenda".
/jlne.ws/3XZobTl
Quant Hedge Funds Trapped in Short Squeeze After China Glitch
Bloomberg
A number of quantitative hedge funds in China were hit severely on Friday as the nation's equities staged their biggest rally in years, according to people familiar with the matter. Some firms suffered heavy losses because they shorted index futures for their so-called Direct Market Access strategies, said the people, asking not to be identified discussing a private matter. Some saw their losses exacerbated by a Shanghai Stock Exchange glitch that left them unable to sell holdings to meet margin requirements, another person said.
/jlne.ws/3N2wveN
Fed's Favorite Inflation Gauge: What to Expect From August PCE
Katy Barnato - The Wall Street Journal
The Federal Reserve's preferred inflation gauge is expected to show that price pressures continued to ease gradually in August.
The personal-consumption expenditures price index, or PCE, tracks a broader range of outlays than the better-known consumer-price index. The most recent CPI suggested inflation eased in August to a three-year low, and helped tee up the Fed to go big with a 0.5-percentage-point rate cut last week.
/jlne.ws/4gF7XpT
Clock is ticking for US recession, return of Fed's QE, says black swan fund
Davide Barbuscia and Carolina Mandl - Reuters
The first interest rate cut by the Federal Reserve signals a U.S. recession is imminent and a dramatic drop in financial markets could once again force the U.S. central bank to come to the rescue by buying bonds, said tail-risk hedge fund Universa.
The Fed said last week it started cutting rates to recalibrate monetary policy and to maintain strength in the labor market. With inflation declining, and the economy still on relatively solid footing, many see the beginning of the easing cycle as a precursor to a so-called economic soft landing.
/jlne.ws/4dqwLiG
| | | | | | Exchanges | | | Cboe BIDS VWAP-X: Introducing venue-based trajectory crossing to Europe
The Trade
The TRADE speaks with Natan Tiefenbrun, Cboe's president for North American and European equities, and Stephen Berte, president of BIDS, about Cboe BIDS VWAP-X, its benefits and why Europe is ready for this type of execution mechanism.
/jlne.ws/3N07bpZ
SGX to publish detailed derivatives market reports from next week
Radi Khasawneh - FOW
Singapore Exchange (SGX) will publish its first commodity derivatives exposure reports next week, in a bid to increase market transparency in its most traded markets.
/jlne.ws/3ZETmok
BNY Approved by SEC for Crypto Custody Beyond ETFs, Gensler Says; BNY's individual wallet structure protects customers: Gensler; Up to the bank on expanding beyond Bitcoin, Ether ETF custody
Jonnelle Marte, Lydia Beyoud, and Olga Kharif - Bloomberg
The structure Bank of New York Mellon Corp. is using to offer custody services for digital assets could be used beyond the Bitcoin and Ether exchange-traded funds that the bank is considering, according to US Securities and Exchange Commission Chair Gary Gensler. Earlier this week, the bank acknowledged that it had presented a plan to the SEC's Office of Chief Accountant to custody those two assets in a way that would protect customer funds in the event of bank insolvency. The agency provided BNY with a "non-objection" to the plan, a regulatory term that gives comfort to the bank that its structure won't fall afoul of the agency's requirement that banks reflect the value of the digital assets they custody on their balance sheet. BNY previously told Bloomberg News that the SEC's non-objection was specific to the ETF use case.
/jlne.ws/4elAkI2
SGX Group wins multiple derivatives exchange awards from Asia Risk, GlobalCapital and FOW
SGX
Singapore Exchange (SGX Group) has clinched the top Asian derivatives exchange accolade at three distinguished financial-industry awards for its multi-asset service offering, reflecting growing global institutional demand for its trusted investment and risk-management solutions. SGX Group was named "Derivatives Exchange of the Year" at the Asia Risk Awards, one of the longest-running awards for the derivatives and risk-management industry. Leading publication Asia Risk cited how SGX Group's approach across equity, currency and commodity derivatives was "particularly welcomed" by both international and regional market participants as they navigated persistent uncertainty and volatility. Its continued development of market connectivity in India, as well as strengths in offering efficient access to China, were also lauded. The award was announced on 26 September in Singapore.
/jlne.ws/3NnbJXL
| | | | | | Strategy | | | Stock Market's 'Goldilocks Zone' Is in Danger of an Abrupt End; Universa's Spitznagel expects stocks, gold, crypto to fall; Sees market downturn, spike in volatility before the year end
Sonali Basak and Natalia Kniazhevich - Bloomberg
With equities hitting all-time highs and traders growing confident of an economic soft landing, the stock market appears to be in a "Goldilocks zone," according to Mark Spitznagel, founder and chief investment officer of Universa Investments.
But investors should be wary of second-order effects, such as an economic slowdown that could send the market crashing down abruptly, even as the Federal Reserve cuts interest rates, he said in an interview with Bloomberg Television Thursday. Spitznagel is anticipating a "crush" in global markets until the end of this year, which can be driven by a slowdown in economies.
/jlne.ws/3XWzH1T
Trump trades vs. Harris trades: Which stocks investors should watch
MarketWatch (Video)
As the 2024 election nears, investors are watching Trump trades and Harris trades closely. Which stocks could rise or fall depending on the outcome, and what should traders consider before making their moves? Here's what you need to know.
/jlne.ws/4gFY4s4
| | | | |  | | | | 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
| | |
|
|
| |
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. |
|
|
