| October 01, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Options Discovery Episode 34: Retail Options Trend
JohnLothianNews.com
Today, we're diving into the dynamic world of retail options trading, a trend that is reshaping the landscape of trading and investment strategies. Retail options trading has seen a significant uptick in participation since the second quarter of 2020. Retail traders accounted for 26% of notional value traded on C1 during that period, up from 16% in the first quarter of 2020. This trend has continued with retail participation climbing to 31% in the fourth quarter of 2023. The findings of the Retail Trading and Options Study reveal valuable insights into the activity and motivations of American retail traders.
Watch the video »
| | | | | | Lead Stories | | | India tightens derivatives trading rules after retail options frenzy; Regulator aims to clamp down on country's retail trading mania
Chris Kay - Financial Times
India's capital markets regulator has raised the barriers on derivatives trading to curb the frenzy among millions of young retail investors who have piled into high-risk options and short-term bets on the country's booming stock market.
The Securities and Exchange Board of India on Tuesday imposed tough measures including raising the minimum contract size on index derivatives by about three times to at least Rs1.5mn ($18,000). It also reduced the amount of tradable weekly options contracts to one per exchange from November.
/jlne.ws/3Y5ei6E
Investors Hot on India Shrug Off Adani Short Seller Attack; Indian shares are surging despite Hindenburg's report accusing the conglomerate of fraud.
Abhishek Vishnoi, Ashutosh Joshi, and Anup Roy - Bloomberg
When New York short seller Hindenburg Research LLC accused the Adani Group of stock manipulation and accounting fraud last year, the Indian conglomerate's shares plummeted-raising concerns about whether the country's markets deserved their reputation as the next big thing. This summer, Hindenburg fired off another salvo, alleging that Madhabi Puri Buch, chair of the Indian market regulator, had a conflict of interest and had blocked a thorough probe into Adani.
/jlne.ws/4erlWhs
Stock Market Is "On Edge" as Middle East Tensions Jolts Traders; Volatility spikes, Big Tech shares lead selloff in S&P 500; Escalation won't 'derail the bull market": Pictet's Paolini
Esha Dey, Natalia Kniazhevich, and Alexandra Semenova - Bloomberg
One day after hitting an all-time high, US stocks are in retreat Tuesday and volatility is rising on reports that Iran is preparing to launch a ballistic missile attack against Israel within the next 12 hours.
The S&P 500 Index fell as much as 1.4%, its worst intraday decline in three weeks, with the information technology sector dragging down the index, which has since regained some of that decline. Apple Inc., Nvidia Corp and Microsoft Corp. were by far the biggest weights on the benchmark. Meanwhile, the Cboe Volatility Index, also known as the VIX, jumped sharply to the highest level in nearly a month.
/jlne.ws/4eGnpAV
An unpredictable America looks more and more like an emerging market; Stock markets are roaring but political volatility and social tensions make some investors see the US as a risk to be hedged against
Rana Foroohar - Financial Times
Last week, as the UN General Assembly met in New York, I moderated an event with a group of well-known economists and foreign affairs experts on the effects of the US election on the future of multilateralism. Everyone agreed that Donald Trump would be a disaster for global co-operation, and that Kamala Harris was a bit of an unknown quantity. The most interesting takeaway, however, was that participants were less interested in how America would engage with the world than where the world would go with or without the US. While it sometimes seems that policymakers and business leaders are breathlessly waiting, plans on hold, to see what happens in November, it's perhaps truer to say that they are making peace with a world in which the US is not an anchor for stability, but rather a risk to be hedged against.
/jlne.ws/3zH7Ucq
US Funding-Market Volatility Fuels Spike in Key SOFR Benchmark; Secured Overnight Financing Rate jumped to 4.96% on Monday; That widened gap relative to fed funds rate to 13 basis points
Alex Harris - Bloomberg
A key rate underlying the US financial system jumped sharply at the end of September, an indication that volatility surrounding the end of the quarter has returned. The Secured Overnight Financing Rate - an important one-day lending benchmark linked to activity in the repurchase agreement market - rose to 4.96% as of Sept. 30, according to the latest Federal Reserve Bank of New York data published Tuesday.
/jlne.ws/4evKK87
Investors turn to volatility trades to profit from tight US election; Traders opt for complex derivative bets instead of predicting who will win, as November vote takes centre stage in markets
Nicholas Megaw - Financial Times
Investors are seeking to profit from the uncertainty over the outcome of the US presidential race by turning to complex derivatives trades, which they believe can benefit from stock market moves regardless of who wins.
With fewer than 30 trading days to go, the election remains extremely close, risking a repeat of 2020's disputed result.
A growing number of investors are seeking to tap into this potential market turbulence by betting on volatility rising sharply in the coming weeks.
/jlne.ws/3N7N8G3
| | | | | | Exchanges | | | MEMX Options Market Share Climbs to Over 3% in First Year of Operations; Options Exchange Enters Its Second Year with Positive Momentum
MEMX
MEMX, a technology-driven exchange operator founded by members to benefit all investors, reached over 3% total options market share and 6.1% regular electronic options market share in September 2024, coinciding with the one-year anniversary of the exchange.
Underscoring the strength of the offering, MEMX Option's market share more than doubled since May of 2024 in the continuous trading single-leg equity and ETF options category in which the exchange operates.
/jlne.ws/3ZO8IHc
Cboe Global Markets Announces Date of Third-Quarter 2024 Earnings Release and Conference Call
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, will announce its financial results for the third quarter of 2024 before the market opens on Friday, November 1, 2024. A conference call with remarks by the company's senior management will begin at 7:30 a.m. CT (8:30 a.m. ET).
/jlne.ws/3Y4nkkh
CME Group to Launch Yen- and U.S. Dollar-denominated Micro Nikkei Futures on October 28
CME Group
CME Group, the world's leading derivatives marketplace, today announced it will expand its suite of Nikkei 225 futures contracts with the addition of yen- and U.S. dollar-denominated Micro Nikkei futures on October 28, pending regulatory review. Sized at 50 yen and $0.50, respectively, these new micro-sized contracts will allow traders to capture Japanese benchmark trading opportunities with greater precision and will add to CME Group's existing suite of standard and E-mini Nikkei contracts.
/jlne.ws/3XR8pZF
| | | | | | Regulation & Enforcement | | | Japan Crypto Review May Open Door to Lower Taxes, Dedicated ETFs; Officials may weigh whether to put crypto under investment law; Industry seeks to slash the levy on digital-asset gains to 20%
Takashi Nakamichi - Bloomberg
Japan is set to begin a review of the nation's cryptocurrency rules, opening up the possibility of lower taxes on digital assets and potentially paving the way for the roll out of domestic funds investing in tokens. The Financial Services Agency in coming months will assess whether the current approach of regulating crypto under the payments act is adequate, an official at the agency said, asking not be identified in line with the institution's rules. The FSA will examine whether the act offers adequate investor protection since tokens are used mostly for investing rather than payments, the official said. That may lead to changes to the act, or the reclassification of crypto as financial instruments that fall under Japan's investment law, the official said.
/jlne.ws/3zFapvR
Short-Seller Andrew Left Previews Defense in Skirmish Over 3,000 Extra Words; Left request to file expanded defense rejected by judge; Short seller is accused of fraud in parallel SEC, DOJ cases
Erik Larson - Bloomberg
Short seller Andrew Left is gearing up to seek dismissal of a US Securities and Exchange Commission lawsuit over his trading activities, with his lawyer characterizing the civil case as a substandard "novelty." US authorities in July accused Left and his Citron Research firm of committing fraud through stock trades, social media posts and research reports - the culmination of a yearslong crackdown against traders who promote their bearish bets. The SEC case is running parallel to a US Justice Department criminal prosecution.
/jlne.ws/3TSfGHv
| | | | | | Strategy | | | This hedge-fund manager says it's a 'max-long' moment for stocks; Investor says cocktail of China and Fed easing should lift stocks
Steve Goldstein - MarketWatch
Famed hedge-fund manager David Tepper made waves last week by not just saying how much he liked assets tied to China - "everything," he kept repeating - but also how aggressively he was taking the position. He said the new size of his China position was twice the previous one, and without precisely nailing that down, suggested it now was more than 20% of his fund.
/jlne.ws/47ODtxz
| | | | | | Miscellaneous | | | Welcome to Shocktober for Stocks. Here's Why Investors Are Spooked.
Paul R. La Monica - Barron's
September, historically the worst month of the year for stocks, turned out to be nothing for investors to worry about. After a bumpy start last month, stocks surged to near-record highs thanks to the Federal Reserve's big rate cut and stimulus from China.
/jlne.ws/3NaGtLa
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