| April 06, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Cboe is getting some love today, first for awarding five scholarships in a surprise ceremony disguised as a final round of interviews for its Cboe Empowers Scholarship program and second for putting up some darn good volume numbers across the global organization of the popular ADV and the less popular ADNV.
The sneaky Cboe invited the five winners of the Cboe Empowers Scholarship program to its new global headquarters in the Old Post Office building. The students were prepared for a final interview, but instead they were whisked off into a large conference room where Cboe Chairman, President (until May 12), and CEO Ed Tilly congratulated them on their progress to date before the big reveal. There were no more interviews. The five students were being awarded a Cboe Empowers Scholarship right there instead. They even got to ring the Cboe opening bell.
These kids are going to college with their costs paid by the Cboe. This is a start for the program. The Cboe said it hopes to expand the program and I wholly expect them to do that. This is the type of community engagement that is in the DNA of the Cboe and its management and has been passed down through successive regimes. Ed Tilly and his team are the latest personification of this, and if they can make this work, perhaps the best representation of these values yet.
Cboe Global Markets' first quarter 2022 total volume across all four Cboe options exchanges was 830.3 million options contracts, which set a record for the second consecutive quarter. The average daily volume, the popular ADV number, hit an all-time high of 13.4 million contracts traded per day. That was the big news - the small news was that the Cboe launched Nanos on March 14 with nearly 72000 contracts traded in the first two weeks.
Over in Europe, Cboe BIDS Europe, Cboe's European block trading platform, reported average daily notional value, the much less popular ADNV, traded EUR669 million, beating the previous record of EUR608 million ADNV traded in January 2022. Cboe also has something called the Cboe Europe Periodic Auctions, which reported ADNV traded of EUR2.1 billion, beating the previous record of EUR2 billion ADNV traded in February 2022.
And Cboe European Derivatives traded 2464 contracts, a record, up from 1623 contracts in February. Cboe's global FX spot ADNF was $44.4 billion in March 2022, the second highest month on record behind March 2020. The Cboe SEF set a new monthly record ADNV in Non-Deliverable Forwards (NDFs) with $957 million traded in March 2022.
Cboe was not the only equity options exchange with some big numbers, MIAX also set some records. Total U.S. multi-listed options market share for the MIAX Exchange Group reached 13.8%, up 10 basis points year-over-year (YoY) and representing a 0.8% increase. The MIAX Exchange Group collectively executed 121.8 million multi-listed options contracts during the month, representing a 4.2% increase YoY and an average daily volume (ADV) of 5,295,073 contracts. ~JJL
| | | | | | Lead Stories | | | Goldman Plans to Expand OTC Crypto Options Trading to Ether; Client interest in Ether rises ahead of software update; Ether prices have outperformed Bitcoin since mid-March
Yueqi Yang and Jialiang David Pan - Bloomberg
Goldman Sachs Group Inc. is planning to offer over-the-counter Ether options trading and has seen growing interest from clients in the second-largest digital currency, said Andrei Kazantsev, global head of crypto trading at the bank. The Wall Street giant is planning to launch cash-settled Ether options "in due course," he said Tuesday during a Goldman client webinar. Last month, Goldman traded its first over-the-counter Bitcoin options.
/jlne.ws/3Ji7sQC
Watch VIX and Volatility Levels Are Too Low, Says Wu Silverman
Bloomberg (Video)
Amy Wu Silverman, RBC Capital Markets Managing Director & Equity Derivatives Strategist, talks about volatility levels, the bond markets and how some of her clients are hedging. She's on "Bloomberg Markets: The Close."
/jlne.ws/3r8BpMK
Commodities Volatility Is Here to Stay, Cargill's Gregory Broussard Says
Kim Chipman - Bloomberg
Wild swings in commodities from wheat to crude oil are here to stay with global supply chains getting reassessed in the wake of Russia's invasion of Ukraine.
That's according to Gregory Broussard, global head of financial trading for agriculture giant Cargill Inc.'s risk management unit.
/jlne.ws/3r7CAw2
CME Group sees volumes jump on the back of UMR fears; The derivatives exchange has seen trading activity in blocks and EFRPs across its listed FX products grow by more than 280% this year.
Wesley Bray - The Trade
CME Group's listed FX products have seen trading activity in blocks and exchange for related positions (EFRPs) up more than 280% for the year-to-date compared to the same period last year. The activity has been a significant contributor to the total average daily volume (ADV) of $110.9 billion during March, which also saw FX options volumes in contract terms increasing to 21.7% in 2022 compared to March 2021.
/jlne.ws/3v1c48G
Why the stock market could be in for a 'rough ride' as Fed prepares to shrink balance sheet
William Watts - MarketWatch
Tough talk Tuesday on the Federal Reserve's balance sheet from a key policy maker could signal rough sledding ahead for equity investors, a Wall Street economist warns.
"Fedspeak has become increasingly more hawkish with a noted dove hinting that balance-sheet reduction could begin as soon as next month," said Joe LaVorgna, chief economist for the Americas at Natixis CIB. "This led to a bearish steepening in rates, but thus far stock market investors are unperturbed," at least for now, he said.
/jlne.ws/38yvytS
| | | | | | Exchanges | | | Cboe Global Markets Reports Trading Volume for March 2022
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today reported March monthly trading volume statistics across its global business lines and provided guidance for selected revenue per contract/net revenue capture metrics for the first quarter of 2022.
/bit.ly/3JcvbSg
March 2022 figures at Eurex
Eurex
Equity index derivatives showing strongest growth among listed derivatives (up 36 percent)
Notional outstanding in long-dated OTC interest rate swaps up 34 percent
Total traded derivatives contracts at Eurex grew by 26 percent in March, from 195.0 million to 246.2 million compared to the same month last year. Equity index derivatives was again the standout sector with 36 percent year-on-year growth, from 93.8 million traded contracts to 127.9 million, while interest rate derivatives grew by 23 percent, from 66.1 million traded contracts to 81.3 million. Total contracts traded in equity derivatives grew by 6 percent.
/bit.ly/3LQ82qJ
| | | | | | Regulation & Enforcement | | | U.S. SEC unveils rules to better oversee security-based swap execution
Katanga Johnson - Reuters
A U.S. markets regulator on Wednesday voted to propose new rules that would require platforms that execute trades of security-based swaps to register with the agency in a bid to increase the transparency of the over-the-counter derivatives market.
The proposals from the U.S. Securities and Exchange Commission (SEC) would fulfill a mandate under the Dodd-Frank Financial Reform Law, passed in the aftermath of the 2007-09 global financial crisis, to bring clearer oversight to the opaque multitrillion-dollar derivatives market, the agency said.
/jlne.ws/37meYgi
| | | | | | Strategy | | | Yield Curve Inversion Doesn't Mean Automatic Recession
Gregory Daco - Barron's
The yield curve inversion has resurfaced as the topic du jour with many questioning whether it implies an imminent recession for the U.S. economy. While the yield curve serves as an important recessionary signal, there are four key reasons why it should be interpreted with discernment in this unusual business cycle.
The yield curve is the spread between long-term and short-term bond yields. During times of economic expansion, yields for longer-term bonds tend to be higher than yields for shorter-term bonds as investors demand extra compensation for the risk related to their longer-term investment. As a result, long-term yields will reflect short-term yields plus a premium for risk and duration.
/jlne.ws/37mfOtg
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