| August 27, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
Volatility Insight of the Week: The skew ratios of major currency pairs (including EUR/USD, GBP/USD, and CHF/USD) have been hovering around 3-year highs, indicating risk positioning for the upside in those currencies relative to the US dollar. To learn more about CVOL, please visit here.
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JPX Market Explorer: Bridging the Information Gap for Global Investors
JohnLothianNews.com
In an ambitious move to enhance the accessibility and attractiveness of Japanese stocks, Shun Takato, chief representative and head of fintech at JPX Market Innovation & Research, Inc., has launched the JPX Market Explorer. This platform, introduced as a proof of concept in February, aims to tackle the persistent issue of insufficient English-language information for international investors interested in Japan's stock market.
Watch the video »
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NYSE, B3, And TMX: Why Investors Are Embracing ISSB Sustainable Finance Standards
JohnLothianNews.com
Comparability and interoperability in sustainable finance reporting standards topped the discussion in a recent roundtable with executives from stock exchanges around the world.
Watch the video »
| | | | | | Lead Stories | | | Nasdaq seeks SEC approval for bitcoin index options
Suzanne McGee - Reuters
Nasdaq is seeking the green light from regulators to launch and trade options on a bitcoin index, the exchange operator said on Tuesday. The U.S. Securities and Exchange commission has yet to approve options based on any of the individual exchange-traded funds tied to spot bitcoin prices that made their debut in January, including a Nasdaq application to trade options on BlackRock's $21.3-billion iShares Bitcoin Trust ETF. The proposed index options - listed derivatives offering a quick and inexpensive way to amplify exposure to bitcoin - on a bitcoin index would give institutional investors and traders an alternative way to hedge their exposure to the world's largest cryptocurrency. "It's important for options on bitcoin to be available for this asset class to be fully normalized," said Matt Hougan, chief investment officer of Bitwise, one of the group of asset managers that brought bitcoin ETFs to market this year. "We're missing a part of the liquidity picture that ETF options would provide."
/jlne.ws/3Mk4uiy
'FOMO' returns to the options market as traders chase stocks higher; The dynamic pushed up Wall Street's 'fear gauge' last week, even as stocks climbed
Joseph Adinolfi - MarketWatch
Once again, option traders have been giving in to the "fear of missing out" and chasing the stock-market rally higher.
This was evident last week as both the S&P 500 index and the Cboe Volatility Index rose in tandem, a dynamic that a senior Cboe strategist described as "unusual" in a report shared with MarketWatch.
/jlne.ws/47b8V91
Nvidia results could spur record $300 billion swing in shares, options show
Saqib Iqbal Ahmed - Reuters
Traders in the U.S. equity options market are expecting Nvidia's upcoming earnings report to spark a more than $300 billion swing in the shares of the world's most dominant artificial intelligence chipmaker.
Options pricing shows that traders anticipate a move of around 9.8% in the company's shares on Thursday, a day after it reports earnings, data from analytics firm ORATS showed. That's larger than the expected move ahead of any Nvidia report over the last three years and well above the stock's average post-earnings move of 8.1% over that same period, according to ORATS.
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US Options Market is in Early Innings of Growth
Shanny Basar - Traders Magazine
Nasdaq reported record index options revenues in the second quarter of this year but believes that growth is just beginning.
Kevin Davitt, Nasdaq's head of index options content, said in a blog that index options trading has grown dramatically during the last three years. He said: "Notably, S&P 500 index-pegged options saw a 31% increase from 2022 to 2023 and 8% from 2023 to 2024, and Nasdaq 100 Index Options (NDX) experienced a 59% rise between 2022 and 2023 and a 40% increase from 2023 to 2024."
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Market Volatility Fears Lingering Beneath the Surface
Bloomberg (Video)
Amy Wu Silverman, Managing Director and Head of Derivatives Strategy at RBC Capital Markets, examines the options market and tech sector investing ahead of Nvidia's upcoming earnings report. Amy speaks with Tom Keene and Damian Sassower on Bloomberg Radio.
/jlne.ws/3T5Jr7o
Brace yourself for an 'avalanche' of dollar selling?; 'The dollar's depreciation will likely be non-linear'
George Steer - Financial Times
Jay Powell's speech in Jackson Hole pretty much sealed the deal for a September rate cut. Markets cheered. Angels sang. All is well again, now that the pivot is finally materialising.
But perhaps the most noteworthy subsequent market move came in currency markets, where the dollar index on Friday slumped to its lowest level in a year. It's clawed some of that back this week but dollar selling is likely to get a lot worse, according to Stephen Jen of Eurizon SLJ.
/jlne.ws/474RoPR
| | | | | | Exchanges | | | MIAX Sapphire lists 88 US blue chip equity options - FOW Data
Luke Jeffs - FOW
MIAX Sapphire, which officially launched on August 12, listed on Monday August 26 88 equity options, according to FOW Data, including options on AT&T, Bank of America, Ferrari and Hyatt Hotels.
/jlne.ws/3T7ZpO5
CME Group to Launch Bitcoin Friday Futures on September 30
CME Group
CME Group, the world's leading derivatives marketplace, today announced it will further expand its cryptocurrency derivatives offerings with the introduction of Bitcoin Friday futures (BFF) on September 30, pending regulatory review.
Sized at one-fiftieth of one bitcoin, these new weekly futures contracts will be cash-settled to the CME CF Bitcoin Reference Rate New York Variant (BRRNY) at 4:00 p.m. New York time every Friday. A new BFF contract will be listed every Thursday at 6:00 p.m. New York time for a Friday trade date, with market participants able to trade the nearest two Fridays at any given point. A Friday expiry allows these contracts to closely track the spot price of bitcoin, as well as help investors mitigate weekend price moves.
/jlne.ws/4dEqvVq
Nasdaq and CF Benchmarks to Drive Development and Adoption of Digital Asset with New Index Options
Nasdaq
Nasdaq (Nasdaq: NDAQ), in partnership with CF Benchmarks, today announced its filing with the Securities and Exchange Commission to list and trade Nasdaq Bitcoin Index Options (XBTX). Upon regulatory approval, investors will be able to manage positions and hedge investments in cryptocurrency through options, furthering the maturity and liquidity of the asset class.
/jlne.ws/3MHs1ud
CME, Ice tread nuanced path to US Treasury clearings CME floats "hybrid" model, Ice commits to agent clearing, while LCH is yet to reveal its hand
Bernard Goyder and Helen Bartholomew - Risk.net
CME Group and Ice are pitching subtly different access models for their proposed US Treasury clearing houses. CME has in recent weeks briefed key stakeholders - including banks, broker-dealers and hedge funds - on preliminary plans for its proposed central counterparty (CCP) for US Treasury trades. A clearing executive at a large US bank describes CME's proposal as a "hybrid" approach that will allow banks and broker-dealers to offer US Treasury clearing as a standalone service or bundle it with
/jlne.ws/3Z2397M
CME Group Opens Registration for its 21st Annual Global University Trading Challenge
CME Group
CME Group, the world's leading derivatives marketplace, today announced that registration is now open for the 21st annual CME Group University Trading Challenge, which will be held from Sunday, October 6, 2024 through Thursday, October 31, 2024. Interested students can register no later than 2 p.m. CT on Tuesday, October 2, where they can also familiarize themselves with the challenge rules and gain additional market knowledge through the wide range of resources available.
/jlne.ws/3MiqsCJ
Euronext and Nord Pool announce Nordic and Baltic power futures market
Euronext
Euronext today announced that Nord Pool, the European power market, is to enter a new area of business with the launch, together with Euronext, of a dedicated Nordic and Baltic power derivatives market. The new Euronext Nord Pool Power Futures market will be traded on Euronext's pan-European Optiq trading platform and cleared by Euronext Clearing. The announcement comes after extensive consultation with market participants. Euronext Nord Pool Power Futures will be designed to answer the need expressed by the market to have a long-standing, sustainable market infrastructure committed to developing secure power futures trading in the Nordic and Baltic regions, with a strong Nordic foundation. Client testing will open as soon as March 2025. Euronext Nord Pool Power Futures will offer trading of cash-settled futures for all maturities on System Price and EPADs across the Nordics and Baltics. Underlying spot indices will be provided by Nord Pool.
/jlne.ws/4cYhm9b
HKEX Names Head of Global Issuer Services
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Tuesday) pleased to announce the appointment of Mr Johnson Chui as Managing Director, Head of Global Issuer Services. Mr Chui will join the Group on 2 September 2024, reporting jointly to Wilfred Yiu and Glenda So in their capacity as HKEX Co-Heads of Markets. In his new role, Mr Chui will lead HKEX's Global Issuer Services teams based in Hong Kong, Mainland China, London and Singapore, driving the Group's efforts to further diversify and expand its listed issuer base. He will be assuming oversight of this important function from Christina Bao, Co-Head of Sales and Marketing, who after eight years at HKEX, has decided to explore opportunities outside the Group.
/jlne.ws/3MmV8m5
| | | | | | Regulation & Enforcement | | | BNY to Pay $5 Million to Settle CFTC Case Over Swaps Reporting; Firm is latest to settle with CFTC over derivatives reporting; BNY says it 'takes its regulatory responsibilities seriously'
Stephanie Stoughton - Bloomberg
Bank of New York Mellon Corp. will pay a $5 million penalty after a US regulator said that it failed to properly report millions of swaps transactions and supervise a unit that deals the derivatives. The US Commodity Futures Trading Commission on Monday said BNY repeatedly failed to "correctly report millions of swap transactions to a registered swap data repository." The CFTC also said BNY violated a prior order the regulator had against the firm.
/jlne.ws/3X9d88O
| | | | | | Strategy | | | Navigating A Historic VIX Spike With SVOL
Seeking Alpha
Two weeks ago, volatility struck back after an exceptionally long period of market calm, during which the S&P 500 Index went 356 sessions without a drop of 2% or more - the longest such streak since 2007. Table 1 provides specific details of this historic VIX move from July 31, 2024, to August 9, 2024. This spike in volatility was fueled by a combination of factors, including earnings reports, job data, ongoing recession fears, and a sell-off in the Japanese market driven by the unwinding of the Yen carry trade.
/jlne.ws/3Z2RdCC
VIX
Cboe (Video)
In #Vol411, Joel Hawthorne covers Friday's trading action (option volume ~4% above recent ADV) and this week's economic data (incl. PCE inflation data) and earnings (incl. $NVDA).
/jlne.ws/4dWt8BF
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