| October 15, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
Volatility Insight of the Week: MXN/USD Volatility (MPVL) is rising as we approach the U.S. presidential election, with similar volatility trends observed in 2020. For more information, please visit Volatility Insight of the Week: MXN/USD Volatility (MPVL) is rising as we approach the U.S. presidential election, with similar volatility trends observed in 2020. For more information, please visit here.
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Acuiti's whitepaper, produced in collaboration with EP3 by Connamara Technologies, explores how emerging and frontier market exchanges can leverage the global boom in listed derivatives trading. In the first half of 2024, derivatives trading surged, reaching nearly 100 billion contracts-a 76% increase from the same period in 2023, it shared on LinkedIn. This growth presents a significant opportunity for emerging exchanges, which often provide unique access to asset classes and attract international trading firms seeking diverse exposures.
The study revealed that 91% of Tier 2 and 3 exchanges surveyed experienced growth in participants over the past decade, with technology investment playing a crucial role in their success. However, many emerging market exchanges undervalue the importance of technology, despite 61% of successful Tier 2 and 3 exchanges identifying it as essential for attracting international flows. Investing in technology offers several benefits, including reducing outages and enabling new product launches, both of which are critical for long-term growth.
Additionally, the report highlights the importance of simplifying the onboarding process for international firms. Emerging exchanges must address challenges such as regulatory complexity and product awareness to attract global participants. By adopting technology that meets international standards and streamlining onboarding processes, these exchanges can better position themselves to capitalize on the growing interest in derivatives trading.
Cboe's Matthew Scharpf recently released a song titled "I am Home (only Flyers understand)" on all major streaming platforms, he shared on LinkedIn. The song, inspired by his charity performances during the Covid lockdown, is about a University of Dayton graduate returning and feeling like they never left, capturing the special nature of the UD community. Scharpf collaborated with talented musicians, including fellow Flyers Joe Dapier, Lou Leone, Chris Neville, Rob and Jim Bonaccorsi, Grammy nominee Frank Catalano, and Grace Toriello. His dream is for the UD Arena crowd to sing the chorus during a basketball game timeout.
| | | | | | Lead Stories | | | How Bitcoin options trading will transform the crypto market
Rob Nelson - MSN
The rise of bitcoin options trading has opened new doors for investors, adding a level of flexibility and strategy that goes beyond simply buying and holding digital assets.
Roundtable anchor, Rob Nelson, alongside Paul Giordano, V.P. of Digital Asset Management at Marathon Digital, discussed the increasing integration of bitcoin into the traditional financial (TradFi) landscape, particularly through the growth of derivatives like options.
/jlne.ws/4dIQ1Ik
SEC Extends Review for Ethereum ETF Options
TradingView
The Securities and Exchange Commission has extended its review period for a proposed rule change that would allow options trading on Ethereum exchange-traded funds, according to an Oct. 11 notice.
The original 45-day review period was set to expire Oct. 19. However, the SEC has now designated Dec. 3 as the new deadline for a decision, according to the filing.
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Jane Street interns make more than Keir Starmer and Jay Powell
Robin Wigglesworth - Financial Times
Alphaville was moseying around Jane Street's website today, as you do, and took a look at some of its current job openings. There are a lot of them, highlighting just how quickly the firm is growing at the moment - even after doubling in size since 2021. There are 58 positions open in New York alone, for everything from Linux engineers and options traders to an interior designer. Many of the roles list a base salary range of $250,000 to $300,000, with the important caveat that this "is only one part of Jane Street total compensation, which includes an annual discretionary bonus".
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Bearish Rate Bets Hand Win to Brazil's Battered Hedge Funds; Legacy, Ace, and Kapitalo posted strong advances in September; Hedge funds beat benchmark for only the third time this year
Felipe Saturnino - Bloomberg
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Uncertainty around the elusive 'neutral' interest rate could pose a real risk for markets; Nobody can say for sure where the 'neutral' rate for the U.S. economy lies. As the Fed starts cutting, that's making some on Wall Street nervous about a potential reacceleration of inflation.
Joseph Adinolfi - MaarketWatch
The so-called neutral rate of interest - or "r star," as economists call it - is the standard against which the Federal Reserve's interest-rate policy is judged as either "tight" or "loose."
But a longstanding complication regarding this critical measure has been cropping up again lately in commentary shared by economists and market strategists. Because the neutral rate is a theoretical concept, nobody can say for certain exactly where it lies.
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| | | | | | Exchanges | | | ICE Reports Record Trading Activity Across Total Futures and Options with Record Volumes Across Global Energy Markets
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today 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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Vunani Fund Managers Debuts First AMETF on the Johannesburg Stock Exchange
JSE
Trading under the alpha code, VUNGLE, the AMETF aims to provide investors with long term capital growth by investing in global equity and equity-related securities, particularly within developed markets. It is a feeder structure into the Irish-domiciled UCITS fund, the Vunani Global Equity Fund, benchmarked against the MSCI World Net Total Return Index.
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EEX to launch Baltic-Finnish gas markets on 27 May 2025
EEX
The European Energy Exchange (EEX) will add natural gas products for Baltic-Finnish markets to its platform, currently operated by GET Baltic within EEX Group, from 27 May 2025. The product portfolio will comprise products for the gas spot (Within-Day, Day, Weekend) and derivatives (Month, Quarter, Season, Year) products for Lithuania, common market area of Latvia-Estonia and Finland. In addition, EEX will enable location spread trading between these markets and selected European gas markets, which are already available at EEX. EEX will also extend its objective and transaction-based indices to the new market areas, such as EEX EGSI and EEX EOD. GET Baltic's products for this region will not be available for trading from this date onwards.
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| | | | | | Regulation & Enforcement | | | Isda calls for delay to India IM; Rules for third-party custodians still to be finalised less than one month before initial margin rules go live
Chris Davis - Risk.net
The International Swaps and Derivatives Association has called on the Reserve Bank of India to postpone the impending deadline for Indian in-scope entities to begin posting initial margin for non-cleared derivatives, citing unresolved challenges around custodial arrangements. The RBI's framework for initial margin, published in May, is set to come into force on November 8. However, with less than a month to go before the deadline, the market is still waiting on the central bank to publish a
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| | | | | | Strategy | | | Some Hedge Funds Are Missing a Trick - Volume Alpha; Execution matters as much as picking the right stocks. Machine learning can help.
Jonathan Levin - Bloomberg Opinion
Machine learning is ubiquitous in financial markets, and we tend to associate it with the sexy parts of hedge fund investing: what to buy, what to sell and how to pick a bottom or a top. But if you run a multibillion-dollar quantitative investment strategy with high turnover, the operative question is frequently, "How do I avoid shooting myself in the foot with poor trade execution?" In that sense, predicting volume can be just as important as predicting prices. If you place a buy order on a low-volume trading day and it causes the share price to skyrocket, it might not matter how clever your investment thesis was.
/jlne.ws/3YnxOvf
Wall Street's most frustrating 'pain trade' looks set to continue; Stocks poised to keep on rallying as the buy side gives chase, analysts at Nomura and Goldman Sachs say
Joseph Adinolfi - MarketWatch
For Wall Street's professional money managers, the biggest "pain trade" right now is the ongoing rally in stocks following a massively successful two-year bull run.
And there are plenty of reasons to expect that they will continue to climb as buy-side investors give chase, eager to catch up to benchmarks like the S&P 500 SPX, which, as of Tuesday morning in New York, has risen nearly 23% since the start of 2024, according to FactSet data.
/jlne.ws/4eJfX7R
Profiting from Increased Market Volatility
Kai Zeng - tastytrade
Strategies to boost profits while reducing risk in times of wildly varying stock prices
Recently, we've observed a surge in market volatility. The rapid increase in prices presents excellent opportunities for options sellers, who can pursue either of two goal-to collect more premium or to maintain the same premium while reducing risk.
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| | | Jeff Bergstrom
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