| August 22, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Is Nvidia the New Tesla? Options Traders Place Their Bets; Investors are wagering that the furious rally in Nvidia shares will continue after Wednesday's earnings report
Gunjan Banerji - The Wall Street Journal
Traders are ramping up their bets that the blockbuster rally in Nvidia's shares will accelerate after Wednesday's earnings report. Riding the frenzy of interest in artificial-intelligence technology, they have dished out more than $100 billion on Nvidia options this year, according to Cboe Global Markets data through mid-August. About 60% of that sum is tied to call options that can be used to bet on a continued rally. No other stock besides Tesla has garnered that level of investor interest.
/jlne.ws/3QWoqvg
VIX Options Volume on Pace to Exceed 2017 Record
Mandy Xu - Cboe
VIX volatility index option volumes are averaging over 740k contracts a day so far this year, which if sustained, would make 2023 a record volume year. This is an impressive increase of 40% compared to recent years where volumes have hovered around the 500k ADV mark (see Exhibit 1). What's behind this surge in VIX options activity?
/jlne.ws/47BPZjH
Top China Hedge Fund Blames Foreign Investors for Stock Rout; Banxia says in article that foreign funds spur volatility; Hang Seng, CSI trade at 2023 lows as overseas investors sell
Henry Ren - Bloomberg
A top-performing Chinese macro hedge fund blamed global capital for sinking the country's stocks to the lowest levels since November. Foreign funds are primary drivers of Chinese stocks' recent selloff, said Li Bei, founder of Shanghai Banxia Investment Management Center. Overseas investors stirred up market volatility and, "taken together, they are a bunch of aimless flies," she said in an article posted on social media platform WeChat.
/jlne.ws/3QOQd0N
U.S. retail traders eye a fresh piece of the crypto derivatives pie
Lisa Pauline Mattackal and Medha Singh - Reuters
America's mom and pop bitcoin buffs have a shiny new derivatives playground that cryptocurrency analysts hope will fire up a moribund market. Their new platform is cryptocurrency exchange Coinbase Global, which on Aug. 16 became the first crypto-focused firm to win approval to offer cryptocurrency futures to U.S. retail customers.
/jlne.ws/3E8kZdE
Goodbye to the Bull Market for US Treasury Bonds
Bill Dudley - Bloomberg
Who knew that the subject of US Treasury bond yields could inspire such passion? When, in late June, I argued that they were likely to move considerably higher than the then-prevailing 3.75%, I attracted some vehement pushback. In a publication titled "Don't Be a Dud," analysts at Morgan Stanley insisted that the 10-year bond would experience a summer price rally, and that the yield would ultimately settle into a longer-term range of 2% to 3%.
/jlne.ws/3YIcz65
The Boom-or-Bust Bets Dominating Trading This Month
Gunjan Banerji - WSJ
It's been a rough month for stocks. Traders are turning to some of the riskiest bets to play the volatility.
Trading in one-day options, which has only taken off in the past couple of years, is hitting a fever pitch during the August tumult in stocks. Four out of the top 10 trading days for one-day options have been in August, according to Nomura.
/jlne.ws/44kdJFV
Bitcoin Prices Steady at $26,000. Crypto Traders Are Bracing for Another Storm.
Jack Denton - Barron's
Bitcoin and other cryptocurrencies were steadying on Tuesday as investors in digital assets digested a selloff last week that snapped an extended period of uncommonly low volatility. But crypto traders are bracing for yet another storm.
The price of Bitcoin has traded flat over the past 24 hours at around $26,050 after the largest digital asset plunged to near $25,500 in recent trading, revisiting the trough seen in the wake of last week's selloff to the lowest level since mid-June. Analysts are eyeing Bitcoin as vulnerable to further declines with the token below key technical levels, including its 200-day moving average.
/jlne.ws/3srGIdE
Cryptoverse U.S. retail traders eye a fresh piece of the crypto derivatives pie
Lisa Pauline Mattackal and Medha Singh - Reuters
America's mom and pop bitcoin buffs have a shiny new derivatives playground that cryptocurrency analysts hope will fire up a moribund market.
Their new platform is cryptocurrency exchange Coinbase Global (COIN.O), which on Aug. 16 became the first crypto-focused firm to win approval to offer cryptocurrency futures to U.S. retail customers.
It's early days. But crypto markets are excited by the possibility that the first regulated and listed crypto firm to offer futures trading to U.S. retail investors might revive a shrinking $2 trillion cryptocurrency derivatives market.
/jlne.ws/3qDW3HN
| | | | | | Exchanges | | | Eurex to launch Daily Options
Eurex
Eurex extends its diversified equity index product suite by listing Daily Options.
Trading in EURO STOXX 50 Index EoD Options (OEXP) will start as of 28 August 2023.
Institutional demand for options with short-term expiries has strongly increased as investors seek to react quickly and precisely to specific market events. Eurex will start with Daily Options on the EURO STOXX 50 Index. The new options will be offered with expirations on the next five trading days.
/jlne.ws/3YMmJme
September Launch for FEX Global Mysteel (SEADEX) 62 lron Ore (AUD) - Futures and Options Contracts
FEX
FEX Global, the Australian based derivatives marketplace, today announced the trading launch date for the FEX Global Mysteel (SEADEX) 62 Iron Ore (AUD) Futures and Options contracts1. The Australian dollar denominated 50MT contract will offer additional risk management opportunities for industry participants with an interest in the forward price of iron ore.
/jlne.ws/3OJeu5W
| | | | | | Regulation & Enforcement | | | CFTC enforcement trends - Three key issues to watch
Jeff Reeves - FIA
The US Commodity Futures Trading Commission's Division of Enforcement is having a busy year - again.
In fiscal 2022, the agency imposed over $2.5 billion in penalties on registered entities. And as it looks to close out its fiscal 2023 at the end of September, the CFTC is on track to meet or exceed that figure.
/jlne.ws/44iFRJO
| | | | | | Strategy | | | VIX as an Indicator for Trading S&P 500
Cboe
In #Vol411, @RussellRhoads gives us details into using the $VIX Index as an indicator when trading S&P 500.
/jlne.ws/3Paddq0
| | | | | | Miscellaneous | | | 7 Investments to Make: Managers of Top 6% AI-Powered ETF
James Faris - Business Insider
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) is dominating the competition.
Though robust returns are a welcome bonus for the growth-focused ETF, its main goal is to deliver high income while minimizing risk and volatility, co-manager Hamilton Reiner told Insider in a recent interview. Reiner aims to deliver strong risk-adjusted returns instead of just maximizing gains.
/jlne.ws/45GCbCr
2 Extinct ETFs That Imploded in Spectacular Fashion
Tony Dong - TheStreet
In the dog-eat-dog ETF industry, the majority of fund closures take their final bow on the financial stage with all the excitement of watching paint dry. They meekly shut down, mostly because they're more neglected than a salad bar at a rib festival, unable to attract enough assets under management (AUM) to even cover their bar tab, let alone turn a profit.
But then there are those ETFs that, rather than fading out like a forgotten one-hit-wonder, decide to go out like a washed-up Hollywood celebrity, leaving flames, chaos, and a gobsmacked audience in their wake. These are the ETFs that don't just close; they freaking implode.
/jlne.ws/3QPnk4I
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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
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