| March 21, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
John Lothian Interviews Derivative Path's Matt Petrik on Revolutionizing Financial Markets Amidst Regulatory Changes and Technological Innovations
JohnLothianNews.com
John Lothian recently interviewed Matt Petrik of Derivative Path, who discussed his company's foundation and evolution in response to regulations like the Volcker Rule and Dodd-Frank. Originating from a team with roots at Wells Fargo, Derivative Path has developed into a cloud-based platform that simplifies interest rate hedging, foreign exchange, and commodities trading for financial institutions, especially those with assets under $100 billion. The platform's trade blotter integrates various market operations, enhancing visibility for both firms and their clients.
Watch the video »
| | | | | | Lead Stories | | | "FOMO Insurance" Dominates Key Equity Options
Steve Sosnick - Interactive Brokers
It may seem like a quaint notion to a new generation of YOLO-inspired speculators, but options markets arose as a way to transfer and hedge risk. When we view options pricing data for some outperforming stocks, we see that FOMO is the main risk that is being hedged.
The key to the prior assertion involves understanding the concept of options "skew".[i] When we plot the implied volatilities of each options strike for a given expiration, they typically show a non-linear output. It is normal to see a curve with a low ebb at-market or slightly above-market, with higher implied volatilities prevailing for below-market options than for those of similarly above-market options. Below is a graph showing skews for S&P 500 (SPX) options for the next three monthly expiries. The skews are relatively typical for a given stock or index:
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Should Investors Buy Bitcoin ETFs? Financial Advisors Weigh In.
Steve Garmhausen - Barron's
How are financial advisors feeling about Bitcoin these days? In years past, many have expressed deep skepticism, citing price volatility, regulatory uncertainties, and even cryptocurrencies' use in criminal activities. While plenty of doubts remain, the landscape has changed. In January, the Securities and Exchange Commission approved 11 spot Bitcoin ETFs. Two of the biggest, BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund, are up more than 40% so far. So we thought it was time to check in again on advisors' views of the asset and whether they're recommending Bitcoin ETFs to clients.
/jlne.ws/4a3dz9O
Treasury volatility near four year trough
Jamie Chisholm - MarketWatch
The Federal Reserve and the market are in sync. Both think there could be three 25 basis point cuts to borrowing costs this year. It makes for calmer times.
"Considering that U.S. inflation has surprised notably on the upside this year, last night saw a remarkably relaxed Fed as Chair Powell indicated that January's higher inflation could have been seasonal, and that February's print had already seen improvements," says Jim Reid, strategist at Deutsche Bank.
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Powell's Words Are Mightier Than the Fed's Dot Plot; The central bank's projections for fewer interest rate cuts delivered on some of the hawkish hype, but the chair's dovish tone carried more weight for markets.
Jonathan Levin - Bloomberg
The Federal Reserve's dot plot was supposed to be the main event at Wednesday's central bank data dump, and â true to expectations â it revealed an upward drift in policymakers' interest rate expectations over the medium and longer-term. But the market's interest in "the dots" lasted all of 45 minutes, and ultimately it was Fed Chair Jerome Powell who stole the show by downplaying recent inflation data and suggesting that the encouraging disinflation story remains intact.
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| | | | | | Exchanges | | | E-mini S&P 500, E-mini Nasdaq-100 and E-mini Russell 2000 Options Reach Record Volumes
CME Group
CME Group, the world's leading derivatives marketplace, today announced that E-mini S&P 500, E-mini Nasdaq-100 and E-mini Russell 2000 options have reached record volumes in 2024.
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Moscow Exchange launches new derivatives on foreign assets
MOEX
On March 26, 2024, trading in settled futures contracts for shares of the global exchange-traded funds (ETFs) DJ Industrial Average ETF and iShares Russell 2000 ETF will begin on the Moscow Exchange derivatives market. New instruments will allow investors to participate in the movement of global markets, while remaining in Russian jurisdiction, to hedge their securities portfolios and gain additional diversification of their investments. Futures are aimed at a wide range of private and institutional investors.
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| | | | | | Regulation & Enforcement | | | OCC Comment on CFTC Proposed Rule 89 FR 286: Protection of Clearing Member Funds Held by Derivatives Clearing Organizations
Megan M. Cohen, General Counsel and Corporate Secretary - OCC
Comment for Proposed Rule 89 FR 286 submitted on behalf of the Options Clearing Corporation
The Options Clearing Corporation ("OCC") appreciates the opportunity to submit these comments to the Commodity Futures Trading Commission ("CFTC" or "Commission") on the above-referenced proposal ("Proposal" or "Proposed Rules") under the Commodity Exchange Act ("CEA"). In relevant part, the Proposal would require, among other things, (i) that funds of the clearing members of a derivatives clearing organization ("DCO") be segregated from the DCO's own funds and held in a depository that acknowledges, in writing, that the funds belong to clearing members, not the DCO; (ii) that clearing member funds only be invested pursuant to certain defined parameters (specifically, the restriction in existing CFTC Regulation § 1.25); and (iii) that DCOs conduct a daily calculation and reconciliation of the amount of funds owed to customers and clearing members and the amount actually held for customers and clearing members.
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Ether spot ETFs: SEC's Gensler has a legal trick up his sleeve to keep them off the market; Approval of an ether futures ETF doesn't guarantee a spot product will be approved
Chris Matthews - MarketWatch
The cryptocurrency industry has taken an extended victory lap in the 10 weeks since the Securities and Exchange Commission approved the listing of 11 bitcoin exchange-traded products, bidding up the world's most popular digital asset by 40% on the way to a series of record highs.
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Coinbase Derivatives Plans To Launch Futures Trading for Dogecoin in Letter to CFTC
Hope C - CoinMarketCap
Coinbase Derivatives, a popular cryptocurrency exchange, announced its plans to introduce futures trading for Dogecoin, Litecoin and Bitcoin Cash on April 1. On March 7, Coinbase submitted three separate letters to the Commodities Futures Trading Commission (CFTC) outlining its proposal for monthly cash-settled futures contracts for Dogecoin, Litecoin, and Bitcoin Cash. The letters, addressed to CFTC Secretary Christopher Kirkpatrick, provided detailed information regarding the contracts' sizes, settlement methods, and structure. Coinbase intends to utilize the self-certification route under CFTC Regulation 40.2(a) to list these futures contracts, allowing them to proceed without direct approval from the CFTC as long as they comply with the Commodity Exchange Act and CFTC regulations.
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| | | | | | Strategy | | | Micron
Cboe (Video)
Yesterday, the stock market hit an all time high after the FOMC rate decision, Micron $MU had 3x ADV (ahead of earnings) and $SPX traded ~3M contracts. All this and more in #Vol411 with Scott Bauer @cboesib.
/jlne.ws/3x2knWp
| | | | | | Miscellaneous | | | The Value of Investing in Yourself
Jill Griebenow - Cboe
From my days studying accounting at the University of Northern Iowa to my role as Chief Financial Officer here at Cboe, I have learned a great deal about the power of investing in yourself. This year's International Women's Day theme, "Invest in Women," couldn't be better suited to how I've modeled my personal and professional life.
Investing can take on many different forms. Of course, you can invest your money, but you can also invest your intangible resources. Investing your time, knowledge and energy in yourself or others can be just as rewarding, if not more so.
/jlne.ws/3TLZk3v
The mutual fund at 100: is it becoming obsolete? They enabled millions to invest in the stock market but newer, nimbler products are reshaping asset management
Brooke Masters, Will Schmitt, Madison Darbyshire and Harriet Agnew - Financial Times
One hundred years ago on Thursday, Edward Leffler, a former door-to-door salesman of pots and pans, revolutionised financial markets. His invention, the open-ended mutual fund, allowed retail customers to buy into a diversified portfolio of stocks and be confident that they would get a fair value when they wanted their money back. Leffler's innovation gave lower and middle class people an ownership stake in American capitalism. It also spawned financial titans like Fidelity and Vanguard and thousands of smaller competitors that together employ hundreds of thousands of people.
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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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