| October 24, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Trish Foshee is retiring from The IFM, the FIA announced today in a press release. Foshee, who has been working since she was 16, has been with The IFM for the last 24 years.
She has been a stalwart proponent for education in the industry and will officially retire at the end of December. She is retiring for health and family considerations. During her tenure her major accomplishments included extending the educational reach of The IFM, building the industry data center, which was sold to FIA Tech and she also helped put the institute in a strong financial position.
Acuiti invites senior derivatives executives to a Sell-Side Derivatives Managers' Meeting on November 14, 2024, in London. This exclusive event is designed for clearing and execution leaders within the global derivatives markets, offering valuable insights into industry trends and future opportunities. The event will feature expert-led discussions and provide a platform for executives to connect and network with peers. The meeting is supported by event partners, including Broadridge, Cboe Global Markets, Cumulus9, ION Markets, and Sernova Financial. The meeting will take place at One America Square, London, starting at 2 p.m. ~JJL
| | | | | | Lead Stories | | | Institution Takes $25M Hedge Bet on Derive's Bitcoin Options Market as U.S. Election Looms; The strategy will profit most if BTC rises to $80,000 by the end of November.
Omkar Godbole - CoinDesk
As the U.S. election nears, increased betting and hedging tied to the political event, is powering notable increases in trading volumes in the crypto market. The election will have far-reaching consequences for the crypto regulatory space in the world's largest economy.
Early this week, the decentralized derivatives exchange Derive saw an institution take a multi-legged bitcoin (BTC) options strategy, betting on a continued move higher in BTC after the Nov. 5 election. The trade generated a notional trading volume of $25 million, the largest ever onchain options transaction bet tied to the U.S. election, Derive told CoinDesk in an email.
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Euro Hedges Are Most Overpriced Since 2017 Ahead of US Election; Relative premium is increasing with presidential contest tight; US race seen as most significant risk since 2017 French vote
Vassilis Karamanis - Bloomberg
The relative cost of hedging the euro in the run-up to the US presidential elections is the most elevated in seven years as polls suggest voting will go down to the wire. A key options-market measure - based on how much wider currency swings are expected to be in the future compared with now - hasn't been this high since the turbulent 2017 French elections, which some feared would scupper the common currency. A positive number for the so-called relative premium indicates hedging costs are overpriced.
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Bitcoin ETF options divide analysts - 'With all due respect...'; Here's analysts' views after SEC approved more US spot BTC ETFs options.
Benjamin Njiri - AMB Crypto
Analysts agreed U.S. BTC options could inject more liquidity into BTC markets.
But, there were divided views on volatility and price impact in the long run.
Market commentaries have piled in as the regulator approved more U.S. spot Bitcoin [BTC] ETF options.
On the 18th of October, the U.S. Securities and Exchange Commission (SEC) gave a go-ahead for the products on the NYSE (New York Stock Exchanges) and Cboe (Chicago Board Options Exchange).
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Top China Quant Offers Permanent Zero Fees After Market Losses; Shanghai Power Asset apologizes to investors upset by losses; Case adds to Chinese quants' setbacks from stocks rally
Bloomberg News
A top-performing Chinese quantitative hedge fund offered zero performance fees to keep investors from quitting after suffering record losses in recent weeks, the latest casualty of wild swings in the nation's stock market. Shanghai Power Asset Management Co. feels "deeply guilty" for investors in its options-trading products, according to a statement on its WeChat account on Wednesday. The company said it would consider a permanent exemption on performance fees if clients are willing to buy its new products.
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BlackRock launches three targeted ETFs for investors looking to diversify risks
Niket Nishant and Manya Saini - Reuters
BlackRock has launched three new exchange-traded funds (ETFs), including two that offer exposure to the largest U.S. stocks and one designed to avoid them, reflecting asset managers' efforts to provide more tailored investment options. The sustainability of the rally in mega-cap stocks has been one of the biggest talking points among investors. While advocates tout their outsized gains, critics are worried about frothy valuations and concentration risk.
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Saudi Arabian ETF Tracking Chinese Stocks Raises $1.3 Billion; ETF has raised HK$10 billion, more than any of its local peers; Fund due to be listed on the domestic exchange next week
Bloomberg News
A Saudi Arabian investment firm will soon launch the country's largest exchange traded fund to track Hong Kong-listed Chinese stocks, the latest sign of closer financial ties between China and the oil-rich kingdom. The securities arm of Bank Albilad raised HK$10 billion ($1.3 billion) for its Albilad CSOP MSCI Hong Kong China ETF as of Wednesday, according to the social media account of the fund's Chinese partner. The fund is bigger than any of its peers listed on the Saudi Arabian exchange, according to data compiled by Bloomberg. It will start trading next Wednesday.
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Why These ETFs Died During a Bull Market; On this episode of Trillions, we examine how some funds managed to faceplant in the best of times.
Eric Balchunas and Joel Weber - Bloomberg
As with humans, death is a part of life in the exchange-traded fund industry. There have been about 150 closures this year, which may be a bit surprising given how almost everything is up in the markets. So what's behind this year's class of liquidated ETFs? And what does it mean for investors? On this episode of Trillions, Eric Balchunas and Joel Weber dig into the stories and answer the "why" behind some of the closures in 2024. On hand to assist is Vildana Hajric, a cross-asset reporter for Bloomberg, and Todd Rosenbluth, head of research at VettaFi.
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This Stat Shows the Market Is Very Afraid of Election Day
Ben Levisohn - Barron's
Financial markets aren't predicting a Donald Trump victory over Kamala Harris in November's U.S. presidential election. But that doesn't mean they're ignoring it either.
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| | | | | | Exchanges | | | Nasdaq Migrates ISE Options Market to Fusion
Shanny Basar - MarketsMedia
Nasdaq said it has migrated International Securities Exchange (ISE) to Fusion, so that four out of six of its US options markets and one European equity derivatives market are now running on Fusion, its next-generation derivatives platform.
Adena Friedman, chair and chief executive, said on the third quarter results call on 24 October: "Four of our US options markets are running on Fusion, resulting in lower latency, higher throughput and overall increased productivity."
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SGX FX Aims to Grow Electronic FX Options Trading
Shanny Basar - Traders Magazine
Lee Beng Hong, CEO of SGX FX and head of wholesale markets & platforms at Singapore Exchange (SGX Group), said the company would like to grow electronic trading of currency options as average daily volume (ADV) of both over-the-counter and exchange-traded derivatives reached a record. SGX reported that OTC FX ADV surpassed its target by increasing 47% to reach $111bn in the last financial year, between 1 July 2023 and 30 June 2024. In the same period, FX futures ADV grew 36% to about 204,000 contracts. In September this year, combined OTC and futures ADV reached a notional $168bn.
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| | | | | | Regulation & Enforcement | | | Trish Foshee to retire from FIA/IFM
FIA
Trish Foshee, the longtime president and CEO of the Institute for Financial Markets (IFM), will retire at the end of 2024.
Foshee has led the IFM for nearly 17 years and held successive positions within the organization for more than seven years prior. IFM is an affiliate of FIA and is its educational foundation.
"For more than two decades, Trish has brought her knowledge, experience and passion for educating about the cleared derivatives industry to the IFM. Thousands within our industry have benefited from her stewardship of the IFM, including myself, and we are eternally grateful for her many years of service," said FIA president and CEO Walt Lukken. "Trish leaves big shoes to fill, and we wish her well in retirement."
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Time running out to backload Emir derivatives reporting; Significant slice of legacy trades still not ready for new formats, as October 26 deadline looms
Samuel Wilkes - Risk.net
With a deadline at the end of this week, some European derivatives counterparties have struggled to update reports of legacy trades in time to meet a new regulatory standard, according to multiple sources at banks and vendors. Firms unable to meet the deadline face the risk of closer regulatory scrutiny, or even fines.
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| | | | | | Strategy | | | UK Plc Is Buying Longer Currency Hedges After Pound's Surge; Average hedge length rises to near 6 months, says MillTechFX; Geopolitical uncertainty seen driving volatility, survey finds
Alice Atkins - Bloomberg
British companies are locking in currency hedges for longer, driven by the pound's surge and concerns that global geopolitical uncertainty will spur more volatility. The average hedge length has increased to nearly six months, up from less than four months last year, foreign-exchange platform MillTechFX said in a report on Thursday. UK firms are seeking longer-term protection against dramatic currency swings, its survey of 250 chief financial officers and treasurers found.
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Options plays if there is no year-end market melt-up
Julie Hyman and Josh Lipton - Yahoo Finance (Video)
Every year, traders eagerly anticipate a Santa Claus rally, where stocks rise heading into the year's end. But what happens if that's not the case this year?
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| | | | | | Education | | | Cboe Global Markets and The Options Institute (OI) have introduced the "Level Up Learning" curriculum to enhance financial literacy and empower individuals to better navigate the financial world, according to an article by Vivian Rohleder, Director of Curriculum Development for The Options Institute, in the October edition of The World Federation of Exchange's Focus Magazine. The Level Up Learning program focuses on 11 core competencies, such as spending, budgeting, saving, investing, decision-making, risk management, and understanding financial markets. The emphasis on risk management and decision-making aims to equip participants with the skills necessary for informed investing and trading. The curriculum is designed to be inclusive and accessible, offering programming in multiple languages and regional adaptations. Through partnerships with institutions like National Louis University, the OI extends its reach to students across various educational levels in the U.S., with plans for global initiatives. Read more about it HERE in this month's Focus from the WFE. ~SAED
| | | | | | Miscellaneous | | | How Leaders Can Launch a Successful Listening Tour
Catherine Clay - Cboe
Stepping into a new leadership role is always an exhilarating challenge, no matter your level of experience. Last year, I embraced a new adventure as Global Head of Derivatives, Cboe's largest business line, after several years leading our Data and Access Solutions group. In that time, the business evolved into a rich data-driven powerhouse that fuels Cboe's entire ecosystem today.
I was eager to get started reimagining and unifying our derivatives team across the globe-including Cboe European Derivatives (CEDX), product development, sales and distribution, education and our strategic index partnerships-into one cohesive unit.
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