| September 18, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | The Hazlet, NJ-headquartered Velocity Clearing announced last week that it has opened a new office in Chicago to expand its execution, clearing, and custody operations, particularly in the options markets. To celebrate, the firm will ring the closing bell at Cboe Global Markets on September 23. Options trading is a key growth area for the firm and in a press release President Brian Schaeffer emphasized the need for a Chicago presence to meet growing demand. Velocity Clearing already has offices in New York, New Jersey, Florida, and Texas, and is a member of major exchanges and clearing organizations. ~JJL
| | | | | | Lead Stories | | | Fed Meeting Today: Fed Announces Half-Point Interest Rate Cut; The Federal Reserve lowers rates by 50 basis points, sending stocks higher
The Wall Street Journal
U.S. stocks climbed after the Federal Reserve voted to cut interest rates by 0.5 percentage point, opting for a more aggressive reduction than investors had been expecting just a week ago.
Though traders had anticipated a rate cut, they had been left guessing about the size of the move. A week ago, traders were fairly confident that the Fed would cut by the traditional 0.25 percentage point. That consensus vanished in recent days, with many expecting a larger cut, but there was still a large amount of uncertainty heading into the Fed's decision.
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Miami International Holdings Announces Index Licensing Agreement with Bloomberg
MIAX
Miami International Holdings, Inc. (MIH), a technology-driven leader in building and operating regulated financial markets across multiple asset classes, today announced it has entered into a licensing agreement with Bloomberg Index Services Limited (Bloomberg Indices) to develop a suite of index futures, options on futures, and cash options products based on Bloomberg Indices' portfolio of benchmarks. MIH will initially offer a number of equity index products which will be exclusively listed and traded on MIH's exchanges, subject to regulatory approval.
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Hedge Fund Titans Breed a $14 Billion Pack of Startup Cubs; The hedge-fund startups have a lot of investor cash, but no guarantee of replicating their parent firms' success.
Nishant Kumar - Bloomberg
Once, it was Julian Robertson, the founder of Tiger Management, who got to play godfather to a generation of hedge fund stars. Now, it's Ken Griffin's Citadel and Izzy Englander's Millennium Management who are taking up that role - whether they want to or not. With the multistrategy hedge fund titans closed to outside cash amid a dearth of talent able to manage their money, Citadel and Millennium traders are seizing the chance to go it alone. And investors are backing them with an avalanche of assets.
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| | | | | | Exchanges | | | Switzerland's SIX explores launching crypto exchange; Stock exchange operator says digital coins becoming 'recognised asset class'
Nikou Asgari - Financial Times
The Swiss stock exchange is exploring the creation of a venue in Europe for trading cryptocurrencies, in a bid to muscle in on a market dominated by long-standing digital assets firms such as Binance, OKX and Coinbase. The group is considering using its reputation and Switzerland's advanced crypto laws as a hook for large traditional investors who are growing interested in trading digital assets.
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OCC's Business Continuity Management System Achieves Certification to ISO 22031
OCC
OCC is pleased to announce that on Monday, September 2, our organization achieved certification to ISO 22031 for our Business Continuity Management System (BCMS). This certification is issued by BSI, the business improvement and standards company.
ISO 22031 provides an internationally recognized framework for organizations to plan, establish, implement, operate, monitor, review, maintain and continually improve a documented BCMS to protect against, reduce the likelihood of and ensure recovery from disruptive incidents. Achieving this certification will help enhance OCC's organizational resilience, improve risk management processes, ensure a systematic response to crises, and increase trust among stakeholders.
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CME Group SOFR Futures Reach New Volume and Open Interest Records
CME Group
CME Group, the world's leading derivatives marketplace, today announced that its deeply liquid SOFR futures reached a new, all-time record average daily volume (ADV) of 5.4 million contracts in September and an open interest record of 13,159,646 contracts on September 17.
Additionally, SOFR futures now have a record 1,144 large open interest holders (LOIH), based on the CFTC's latest Commitments of Traders report.
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ADM Investor Services Singapore Becomes Abaxx Exchange's Third Clearing and Trading Member
Abaxx
ADM Investor Services Singapore ("ADMIS Singapore"), an affiliate of ADM Investor Services Inc. ("ADMIS Inc"), and Abaxx Technologies Inc. (CBOE:ABXX)(OTCQX:ABXXF) ("Abaxx"), today announced that ADMIS Singapore has become the third approved clearing and trading member of Abaxx's indirectly held, majority-owned Singapore-based exchange ("Abaxx Exchange") and clearinghouse ("Abaxx Clearing"), introducing centrally cleared, physically-deliverable futures contracts, and licensed respectively as a Recognised Market Operator ("RMO") and Approved Clearing House ("ACH") with the Monetary Authority of Singapore ("MAS").
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| | | | | | Regulation & Enforcement | | | Cboe Exchange fines Susquehanna Securities for alleged rule violations
Maria Nikolova - FX News Group
Susquehanna Securities, LLC has agreed to pay a fine of $12,000 due to alleged violations of Cboe Exchange rules.
During all relevant periods herein and during in or about December 2023, (the "Review Period"), the firm failed to report 24 transactions executed on the floor within 90 seconds of execution.
These acts and practices constitute violations of Exchange Rule 6.1 by the firm, in that the firm failed to timely report transactions executed on the floor.
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CFTC Is Scrutinizing Offshore Betting Platforms With US Traders; Agency chairman vows to take action against any violators; CFTC grappling with popularity of election derivatives markets
Lydia Beyoud - Bloomberg
A top financial regulator is closely monitoring offshore, unregulated companies that allow Americans to trade on US election outcomes. "We are observing any activity that's occurring offshore and providing exposure to US customers," Rostin Behnam, chairman of the US Commodity Futures Trading Commission, said Tuesday at a conference hosted by Georgetown University's Psaros Center for Financial Markets and Policy. Behnam was asked what the agency intended to do about Polymarket, a crypto-betting platform with about $1 billion in trading volume tied to dozens of US election outcomes. "If anyone, Polymarket or otherwise, conducts themselves in a way that breaks the law, we will use our civil enforcement authority to make sure that conduct stops," Behnam said.
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| | | | | | Strategy | | | Wall Street Wants You to Be Manic. Be Focused Instead.
Steven M. Sears - Barron's
Wall Street wants you to be a short-term event addict. If you are overly focused on daily happenings, you will often be confused, make suboptimal decisions, and likely lose lots of money because you don't understand how to focus upon, much less find, the path that leads to consistent returns.
By obsessing over event outcomes-like this week's Federal Reserve interest-rate decision -you are essentially wagering on costly flip-of-the-coin trades. The Street's sophisticated practitioners, though they rarely mention this in public, consider market events to be notoriously hard to predict. But they're all too happy to profit from amateur investors.
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How some hedge funds would trade a rate cutting cycle
Nell Mackenzie - Reuters
While many investors hope falling interest rates will usher in a soft economic landing, others forecast a calm before the storm. Here are hypothetical trading ideas shared by three hedge funds on what is next for the U.S. and global economies at the start of a U.S. easing cycle. They said regulations prevented them from revealing their actual trading positions or making recommendations.
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ETF-Volatility Race Heats Up on 200% Leveraged MicroStrategy Bet; MSTU fund tracks 200% leverage to the Bitcoin-proxy stock; ETF upstages 175% MicroStrategy fund that debuted in August
Emily Graffeo and Vildana Hajric - Bloomberg
An ETF that just last month was dubbed the most volatile to ever hit Wall Street has already been upstaged, after the debut of a competing product that adds even more leverage.
The T-REX 2X Long MSTR Daily Target ETF (ticker MSTU) began trading Wednesday, promising to provide two times the daily performance of MicroStrategy Inc. shares, or 200% leverage in industry parlance. The fund, issued by REX Shares and Tuttle Capital Management, gives even more leverage on MicroStrategy than the ETF known as MSTX. The latter, from Defiance, launched in mid-August and was deemed the most volatile ETF in the US by Bloomberg Intelligence at the time.
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These ETFs Can Guard Against Downturns. It's What They Do Otherwise That Hurts.
Debbie Carlson - Barron's
Investors were reminded how volatile equity markets can get in early August when the S&P 500 index swooned following a weak jobs report that sparked recession worries, with technology companies leading the downside.
The broader market soon rebounded, along with bullish sentiment, but there's plenty of uncertainty to keep autumn volatile. Potential tinderboxes include the impact of the Federal Reserve's rate cuts, wars in Russia and the Middle East, and the coming U.S. presidential election, to name a few. Indeed, the markets were off to a rough start in September until last week's rally.
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| | | | | | Miscellaneous | | | Why you should take more risks, with Nate Silver
Financial Times (Audio)
Every career involves choices; every choice involves risk. But being able to size up those risks, and think coolly about which are worth taking, can make the process of choosing between options much easier. The problem? Most of us aren't actually very good at evaluating risk. In this episode, Isabel Berwick speaks to statistician, writer and sometime poker player Nate Silver to find out how we can take better risks in our careers. Silver, founder of analysis website FiveThirtyEight and author of the new book On the Edge: The Art of Risking Everything' explains why fear plays an outsize risk in our decision making, how to recover when a bet doesn't pan out and why your 60s might not be the time to avoid risk.
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