| February 10, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | FOMO Options Bets Sweep Market During Stock Rally; Activity tied to Apple, Meta Platforms and Tesla shares has touched some of the highest levels in history recently
Eric Wallerstein and Gunjan Banerji - Then Wall Street Journal
Options traders are riding this year's stock-market rally en masse, favoring bets on technology stocks to capture quick gains. More than 40 million call-option contracts changed hands in a single day in early February-the highest level on record and nearly topping 2022's daily average volume for puts and calls combined. That propelled overall activity above 68 million contracts, also a record, according to Cboe Global Markets data.
/jlne.ws/3IbszH0
Traders Eye Hedges During Stocks' Rally
Eric Wallerstein - WSJ
Investors' newfound optimism is restoring demand for insurance after it was mostly shunned last year.
The Nations SkewDex, which tracks the cost of protective put options on the SPDR S&P 500 exchange-traded fund that would pay out in the event of a large market decline, on Jan. 5 dropped to nearly 51, its lowest since level 2018. It recently bounced back above 56, though is still near its lowest levels since the Covid-19 pandemic sent volatility soaring.
/jlne.ws/3XhmeOx
FIA-SIFMA flash poll measures derivatives markets sentiment; Responses point to optimism about business outlook, pessimism on regulatory environment
Jeff Reeves - FIA
FIA and SIFMA's Asset Management Group conducted a joint poll of their members during January to capture buyside and sellside views on liquidity, regulation, margin, blockchain and other topics relevant to derivatives markets. The poll garnered more than 100 responses from a curated list of asset managers and brokers actively engaged in the trading and clearing of futures, options and swaps.
/jlne.ws/3Inljbr
****** It is hard not to be optimistic when looking at the ever-present smile on Walt Lukken's face that accompanied the poll.~JJL
Ransomware attack on ION Trading shows markets' vulnerability to hackers
Carter Pape - American Banker
In a rare case of a ransomware attack bringing down a segment of the financial services industry, a major derivatives software provider fell victim to a Russia-linked ransomware group last week, and its trading systems only came back online after the threat actor said the company paid the ransom. Ransomware group LockBit's attack against ION Group's Cleared Derivatives division affected global markets, prompting statements from the Futures Industry Association, a trade organization for futures, options and centrally cleared derivatives markets, and the Commodity Futures Trading Commission in the U.S.
/jlne.ws/3JWLuXh
ION Reboards Clients after Ransomware Attack: Report; The ransomware attack started on January 31st, ION disclosed recently.; The hack was claimed by LockBit, a ransomware gang with ties to Russia.
Solomon Oladipupo - Finance Magnates
ION, the electronic trading solutions provider recently hit by a ransomware attack, overnight started readmitting its clients to its cleared derivatives platform, a source told Reuters on Tuesday. The revelation comes one week after ION admitted that the platform was targeted. The firm described the attack as "a cybersecurity event."
/jlne.ws/3jI1KB5
Recession alarm bells are ringing, but (much) less loudly than before
Reuters
The rapid reopening of China's economy, plunging European gas prices and cooling U.S. inflation suggest a global recession may not be as deep and protracted as feared just weeks ago.
Yes, warning signals are still flashing as last year's surge in inflation and interest rates bites, but a strong rally in world markets suggest optimism is returning.
/jlne.ws/3HUsypy
| | | | | | Exchanges | | | Extending a successful product suite: Eurex Micro-DAX Options now available
Eurex
Eurex introduced the Micro-Futures Product Suite in April 2019 to cater to investors' demand for smaller-sized futures. Since then, over 10 million contracts have been traded by 90 active members. In particular, the Eurex Micro-DAX Futures developed positively, with volume increasing 150% YoY to over 30,000 contracts traded daily in 2022. The strong volume and liquidity increase reflects the market demand for micro derivatives.
/jlne.ws/3DTvxgQ
CME Has Record ADV in 'Age of Uncertainty'
Shanny Basar - Markets Media
CME Group reported a 19% increase in average daily volume in 2022 to a record 23.3 million contracts, which the derivatives exchange operator said was due to global market participants navigating economic and geopolitical uncertainty. Terry Duffy, chairman and chief executive of CME Group, said on the earnings call on 8 February: "Our 2022 performance was driven by new records in financial products, options on futures, and volume from outside the United States."
/jlne.ws/3XlKM99
We had the biggest year in the history of our company, says CME Group's Terry Duffy
CNBC Television - YouTube
CME Group CEO Terry Duffy joins 'Closing Bell' to discuss the company's latest earnings beat, how the company is bracing for future Fed rate hikes and the massive uptake in options.
/jlne.ws/3IdcgcM
| | | | | | Regulation & Enforcement | | | FIA responds to IOSCO consultation on carbon markets
FIA
FIA has responded to an International Organization of Securities Commissions (IOSCO) public consultation on recommendations for establishing sound Compliance Carbon Markets (CCMs) and on key considerations for enhancing the resilience and integrity of Voluntary Carbon Markets (VCMs).
FIA's response highlights that commodity markets, as well as related futures, options and centrally cleared derivatives markets, are playing -- and will continue to play -- a critical role in helping the global economy navigate and manage the risks associated with climate change, and the energy transition.
/jlne.ws/3jGKlJ2
Barclays Sued by Investors for VXX Blunder That Halted Sales (1)
Robert Burnson - Bloomberg
Barclays Plc was sued by investors over its sudden halting of the sales of securities last year after a reported paperwork blunder.
Investors say the bank's failure to more quickly disclose that it had exceeded the number of VIX Short-Term Futures ETN (VXX) that it had permission to sell violated federal securities law.
/jlne.ws/3ROrUym
The S.E.C. Charges Kraken Over Staking, Worrying Crypto Executives
Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni - NY Times
The S.E.C.'s decision to charge the crypto exchange Kraken with securities violations over a popular way for the industry to make money sent more chills down the spines of executives across the sector. At 7:40 a.m. Eastern, the price of Bitcoin traded at $21,757, down nearly 3.9 percent in the past 24 hours.
Crypto companies â and skeptics of the agency's approach to regulation â now worry what new limits the agency will seek to impose on the industry.
/jlne.ws/3E2blcH
The Skinny on SEC Comment Letters
Editorial Board - Traders Magazine
As traders, technologists and compliance officers wait to see if and how a quartet of important SEC equities market rule-change proposals move forward, for now a source of additional insight is the public comment letters.
The comments are important for at least two reasons: they provide a window into the industry's thinking on a given SEC proposal, and they can offer some clues as to where revisions will be forthcoming. If a number of large and influential firms cite similar concerns about a rule change, it's reasonable to believe the SEC is more likely to give attention to that aspect when considering revisions.
/jlne.ws/3IfRycr
| | | | | | Strategy | | | Opinion: Bulls may be losing enthusiasm for stocks, but these 3 potential takeover plays could land in the money
Lawrence G. McMillan - MarketWatch
The U.S. stock market, as measured by the S&P 500 Index SPX, 0.12%, had finally broken out over triple resistance at 4100, on Feb. 1. But the S&P 500 has had trouble adding to that breakout. Instead, the market has pulled back and retested what is now support at 4100 numerous times this week. So far, that support has held, but some overbought conditions and even sell signals have had time to manifest themselves while SPX stalls in this area.
/jlne.ws/40J71c6
Huge MRUT Call to Put Ratio
Cboe (Video)
@AngieMiles gives a rundown of key Russell 2000 Index #optionstrading activity in the #RUTreport
/jlne.ws/3DXV7kG
| | | | | | Miscellaneous | | | ION Trading Andrea Pignataro Left Reeling by Russian Hack
Donal Griffin,
Mark Burton and Isis Almeida - Bloomberg
A cyberattack that wreaked havoc across derivatives firms last week has left Andrea Pignataro, the Italian tycoon who heads the software company at the heart of the storm, grappling with something he has avoided for decades: publicity.
The former Salomon Brothers bond trader who helped set up ION Trading in the mid-1990s has largely shunned the limelight, rarely speaking at events and never once giving an interview to the English-language media. While ION staff worked around the clock to resolve the cyberattack and reassure clients as their systems were being held to ransom by Russian hackers Pignataro, 52, remained out of sight.
/jlne.ws/3XhhRmB
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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
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
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