| October 16, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | The Commodity Futures Trading Commission's Division of Clearing and Risk has announced the participant list and agenda for its October 16 roundtable on clearing issues. The event will focus on topics such as the custody and delivery of digital assets, the use of digital assets as margin, 24/7 trading, non-intermediated clearing with margin, and conflicts of interest in vertically integrated entities. The roundtable will feature representatives from major financial institutions, trading firms, and regulatory bodies, including ABN AMRO, Citadel, CME Group, Goldman Sachs, Fidelity Digital Assets, and JP Morgan. The session begins at 9:00 a.m. EDT at CFTC headquarters in Washington, D.C. ~JJL
| | | | | | Lead Stories | | | Hedge Fund FX Option Bets Are Soaring on Trump Tariff Risk; Investors bet greenback will rally versus yuan, euro and peso; Donald Trump aims to impose tariffs of 60% on Chinese imports
David Finnerty and Ruth Carson - Bloomberg
Hedge funds are ramping up bearish positions against currencies from the yuan to the Mexican peso to speculate that Donald Trump will win the US presidential election next month.
Dollar calls are rising in popularity in the $300 billion-plus currency options markets - positions that gain in value if the greenback rises against tariff-threatened peers, traders say. Contract volumes on the yuan and peso were the highest this month on Tuesday, surpassing those on the hotly-watched US jobs data on Oct. 4, Depository Trust & Clearing Corporation data showed.
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What 66 Economists Say About Where the Economy Is Headed, in Charts; The WSJ's latest survey shows that economists are more upbeat about economic growth and the cooling path of inflation
Harriet Torry, Peter Santilli, and Anthony DeBarros - The Wall Street Journal
Forecasters are increasingly upbeat about the economy's prospects, according to The Wall Street Journal's latest quarterly survey of business and academic economists.
The following graphics show what economists are thinking and how their predictions-and the economy-have changed over recent months and years. After looking at the charts, see whether you can guess what the economists said about the two main presidential candidates and manufacturing employment.
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Stocks Are Up Lately. It's About Much More Than Trump's Odds Versus Harris.
Paul R. La Monica - Barron's
The stock market has been hitting one record high after another. It's tempting to declare that the market is pricing in a Donald Trump win over Kamala Harris, which- at first glance -would be viewed as a more Wall Street-friendly outcome. But correlation is not causation.
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| | | | | | Exchanges | | | ICE Reports Record Futures and Options Trading
MarketsMedia
Intercontinental Exchange, a leading global provider of technology and data, announced that its total futures and options markets reached record trading activity during Q3 2024 with 517 million contracts traded during the quarter, including a record 276 million energy futures and options.
"The development of ICE's commodity and energy markets began over 20 years ago, allowing us to offer customers a truly global and interconnected platform of markets and data across asset classes, all designed with liquidity, precision and flexibility for managing and identifying risk," said Trabue Bland, SVP of Futures Markets at ICE.
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| | | | | | Regulation & Enforcement | | | Investor group warns SSGA-Apollo ETF filing 'raises red flags'; Consumer Federation of America says SEC should consider potential conflicts of interest
David Isenberg, Ignites - Financial Times
The US Securities and Exchange Commission should reject State Street Global Advisors' application for a private credit ETF because it poses liquidity, valuation and conflict-of-interest concerns, the Consumer Federation of America has warned. The fund's investment strategy "raises red flags" because it is unlikely that the fund will be able to sell certain assets within seven calendar days without significantly changing their market value, Micah Hauptman, director of investor protection at CFA, has written in a letter to the agency.
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SEC Charges So-Called Market Maker and Its Employee in Crackdown on Manipulation of Crypto Assets Offered and Sold As Securities
SEC
The Securities and Exchange Commission announced fraud charges against Belize entity Gotbit Consulting LLC a/k/a Gotbit Hedge Fund, a self-proclaimed crypto asset market maker, and its employee Fedor Kedrov for engaging in a scheme to manipulate the market for "Robo Inu," a crypto asset being offered and sold as a security to retail investors. As alleged, the scheme was intended to induce investor victims to purchase Robo Inu by creating the false appearance of an active trading market for it.
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All signs point towards Europe aligning T+1 move with UK and Switzerland; A statement from ESMA comes a day after Task Force recommendations, claiming a coordinated approach across Europe is "desirable" while stressing the urgency in avoiding prolonging the negative impacts of settlement misalignment.
Jonathan Watkins - The Trade
Europe's top markets watchdog has signalled its intentions for moving EU markets to a T+1 settlement cycle through a statement outlining both the urgency of acting and the preference for aligning with the UK and Switzerland. The European Securities and Markets Authority (ESMA) acknowledged the benefits of reducing settlement times but highlighted how harmonisation, standardisation and modernisation will be needed and will require investments.
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| | | | | | Strategy | | | Why Consider Box Spreads as an Alternative Borrowing & Lending Strategy?; Summary of Box Spreads: Borrowing and Lending via the Options Market
Dr. Wesley Gray, Executive Managing Member, Alpha Architect - Cboe
Box spreads represent an overlooked yet powerful tool in the options market, providing investors with opportunities to borrow and lend at interest rates comparable to, and sometimes better than, the rates offered in the treasury bill market. Traditionally, these spreads have been the domain of hedge funds, market makers, and proprietary trading firms, but retail investors can also benefit once they understand the mechanics.
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How this money manager's one-of-a-kind fund beats the market without Nvidia and other tech stocks; Cambria Investment's Meb Faber tells MarketWatch how he makes shareholders money by owning high-quality, dividend-paying stocks that most investors overlook.
Philip van Doorn - MarketWatch
A money manager might bash competitors or lament the state of the financial-services industry when promoting their own business, but Meb Faber, CEO and co-founder of Cambria Investment Management, had something to say during recent interview with MarketWatch that might surprise you.
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Volatility Skew Sets Up In Meta Stock. Here's How To Profit With Options.
Gavin McMaster - Investor's Business Daily
Meta Platforms (META) stock received two upgrades on Monday with analysts from Stifel and Goldman Sachs both raising their price targets on Meta stock.
There is also some volatility skew due to earnings later this month with short-term options showing higher implied volatility than long-term options.
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| | | | | | Miscellaneous | | | Investors Are Gambling on Climate-Linked Catastrophes; "These market-driven solutions don't quite cut it in the poorer parts of the world," Bloomberg's Gautam Naik, says on this week's Zero.
Akshat Rathi and Mythili Rao - Bloomberg
When Hurricane Milton made landfall in Florida last Wednesday, it was a category 3 hurricane. As the storm battered central Florida, carrying away the top of the roof of the Tropicana Field stadium in St. Petersburg, it left millions of households without power. Early estimates put the cost of loss and damages as up to $75 billion. One group of investors was watching Milton's path with particular interest: Catastrophe bond investors. The market for specialized financial instruments designed to pay out in the event of hurricanes like Milton is worth $46 billion. In 2023 cat bonds were the most profitable strategy for hedge funds.
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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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