| October 23, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | CME Group Inc. today reported all-time record revenue of $1.6 billion for Q3 2024, alongside record adjusted operating income, net income, and earnings per share in its reported financial results for the third quarter of 2024. The company achieved a record quarterly average daily volume (ADV) of 28.3 million contracts, with growth across all asset classes. Financial product volumes surged by 28%, driven by a 36% increase in interest rates products, including record ADVs in SOFR futures and Treasuries. International ADV also hit a record, with strong growth in EMEA (up 30%) and Asia (up 28%). ~JJL
| | | | | | Lead Stories | | | Oil Traders Flock to Options Like Never Before on Mideast Risk; Brent options open interest jumps more than 25% this month; Traders protect against price spike amid bearish 2025 outlook
Alex Longley - Bloomberg
Oil traders are holding a record number of options contracts as they seek to protect against the risk of a price spike driven by potential supply disruptions in the Middle East. Brent options open interest this week topped 4 million contracts for the first time - the equivalent of four billion barrels. The total number of positions held by traders has jumped by more than 25% so far this month.
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Moomoo - Cboe 2024 Options Trader Survey Shows Increased Options Popularity
Financial Times
The intuitive investment and trading platform moomoo today announced findings of its 2024 options trader survey, completed in collaboration with Cboe Global Markets (Cboe). The survey found that options trading has become more popular than ever as more retail investors have gravitated towards basic options strategies in the past few years. Many are now seeking to expand their trading to include new strategies and products, while some cite a lack of knowledge as the main barrier to options trading - highlighting an opportunity to enhance investor education and drive even greater participation.
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Cost to Hedge Against Treasuries Losses Soars to Highest of 2024
Edward Bolingbroke - Bloomberg
The price of options that protect against an extended slump in Treasuries is soaring as traders brace for a bevy of decisive events in the weeks ahead that have the potential to deepen the market's losses. Hedging is ramping before the release of a key batch of payrolls data next week, followed by the US election Nov. 5 and the Federal Reserve's next policy announcement two days later. Benchmark 10-year rates touched the highest since July on Tuesday, but as traders see it now, the risk is for an even bigger jump in yields.
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Wall Street ramps up staffing as election nears, expecting volatile trading
Laura Matthews and Suzanne McGee - Reuters
Banks, brokerages, investment managers and exchanges are adding staff to handle high trading volumes on and around Election Day with markets expected to become volatile as results come in.
Political events can trigger wild gyrations that can force market participants to quickly unwind bets, raising market, liquidity and other risks that could pressure trading systems and market infrastructure.
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Goldman's Grim View Whips Up a Debate on Stocks
Denitsa Tsekova and Simon Kennedy - Bloomberg
Forecasting the market is hard, some would say impossible. But that doesn't keep Wall Street's best and brightest from diving in to the fray, year after year. Rarely have their predictive energies been on greater display than this week, when Goldman Sachs warned that annual S&P 500 returns may narrow to a paltry 3% over the next decade, only for JPMorgan Asset Management to say the view is too dour.
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| | | | | | Exchanges | | | Ovation to the test: One step closer to the next-generation clearing platform
OCC
OCC's Sheila Zak, executive director of member services, and Harsh Devpura, principal and product owner, speak with Daniel Tison about the progressive rollout of the firm's new clearing, risk, and data platform.
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OCC Welcomes Two New Members to Board of Directors
OCC
OCC, the world's largest equity derivatives clearing organization, today announced the addition of two members to its board of directors: Public Director Rachelle Keller, former financial executive, and Exchange Director Mike West, Head of Operations at the New York Stock Exchange (NYSE). Keller has more than 30 years of experience in the financial services industry and has held leadership positions across a diverse product set including investment banking, markets and trading, operating services and institutional brokerage. In addition to senior roles at Citibank, NA, Keller held senior roles at other market-leading firms, including Chief Financial Officer of Treasury and Securities Services at JPMorgan Chase & Co.
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CME Group Inc. Reports All-Time Record Revenue, Adjusted Operating Income, Adjusted Net Income and Adjusted Earnings Per Share for Q3 2024
CME Group
CME Group Inc. (NASDAQ: CME) today reported financial results for the third quarter of 2024. The company reported revenue of $1.6 billion and operating income of $1.0 billion for the third quarter of 2024. Net income was $913 million and diluted earnings per common share were $2.50. On an adjusted basis, net income was $977 million and diluted earnings per common share were $2.68. Financial results presented on an adjusted basis for the third quarter of 2024 and 2023 exclude certain items, which are detailed in the reconciliation of non-GAAP results.
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ICE Interest Rate Markets Hit Record Trading Volumes; Euribor Futures and Options Trading at Highest Volume in Over 10 Years
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced record activity across its interest rate derivatives markets with over 190 million contracts traded in Q3 2024, surpassing the previous record set in Q1 2020. ICE's interest rate markets also hit record average daily volume (ADV) during the quarter with 2.9 million contracts traded, up 39% year-to-date (YTD). In the past quarter, a record 118 million Euribor futures and options traded, exceeding the last high set in 2013. Euribor is the benchmark for managing short term euro-related interest rate risk. ICE Euribor futures and options ADV is up 28% this year.
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Delisting of Securities of Vocodia Holdings Corp and SinglePoint Inc. from Cboe BZX Exchange, Inc.
Cboe
Cboe BZX Exchange, Inc. ("BZX") announced today that it will delist the common stock and warrants of Vocodia Holdings Corp. Vocodia Holdings Corp's securities were suspended on September 11, 2024 and have not traded on BZX since that time. BZX also announced today that it will delist the common stock of SinglePoint Inc. SinglePoint Inc.'s securities were suspended on September 11, 2024 and have not traded on BZX since that time.
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| | | | | | Regulation & Enforcement | | | CFTC to Police Electing-Betting Platforms, Chair Behnam Says; Agency is fighting in court to halt politics-based derivatives; Kalshi, Polymarket are seeing increased interest from traders
Lydia Beyoud - Bloomberg
The US Commodity Futures Trading Commission will police registered political derivatives markets despite its best efforts to kill them, agency Chairman Rostin Behnam said during a Tuesday interview with Bloomberg Television. The futures and swaps regulator finds itself having to serve as what Behnam likens to an "elections cop" even as it wages a court fight with Kalshi Inc., an exchange that lets Americans bet on election outcomes. "We'll pursue any action, as we do in any part of our markets," Behnam said. He added that the agency is still litigating an appeal of a September court decision allowing Kalshi's political prediction-market contracts to move forward.
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****** If you look at the numbers and the players, you would not want a cop on the block. You would want a platoon of cops with a parade of paddy wagons at the ready.~JJL
Andrew Left Associate's SEC Deal May Threaten Short Seller; Ryan Choi settles SEC suit, to return $1.6 million in profits; SEC, DOJ have accused Left of manipulating markets with tweets
Erik Larson - Bloomberg
One of Andrew Left's close associates settled US Securities and Exchange Commission claims about his role in preparing tweets that misled investors, potentially raising legal pressure on the famed short seller. Ryan Choi's settlement, disclosed Tuesday in court documents, is the latest twist in US authorities' ongoing civil and criminal cases against Left and his Citron Research. The short seller is widely known on Wall Street for his damning reports about companies he claimed - often correctly - were overpriced by the markets.
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| | | | | | Moves | | | BlockFills Appoints Amy Shelly as CFO, Promotes Neil Van Huis to Chief Strategy Officer; New roles lay groundwork for continued growth geographically and diversification of product offering
BlockFills
BlockFills, a leading digital assets technology and trading firm for institutions and professional traders, today announced the appointment of Amy Shelly as Chief Financial Officer (CFO) and promotion of Neil Van Huis to Chief Strategy Officer. The executives assume significant leadership roles as the firm prepares to launch international offices, expands the BlockFills product offering and positions itself for major growth in the institutional digital assets space. Shelly has more than three decades of financial services management experience, including recently serving for six years as CFO for the Options Clearing Corporation (OCC), the world's largest equity derivatives clearing organization. Van Huis has been a Director of BlockFills since its 2018 inception, working with the team to successfully raise a $37 million Series A funding round in 2022 and establishing the framework for the company's corporate strategy and trading business lines.
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| | | | | | Strategy | | | It's Two Weeks Till the Election. How to Profit From Others' Fear.
Steven M. Sears - Barron's
The imminent election of America's next president is controversial enough that it would be irresponsible of us to ignore it. The U.S. is sharply divided, and it appears chaotic to many foreign observers who look to us for stability and world leadership.
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Wall Street Pros Get Into Position to Profit From a Trump Win; While polling shows a tight race, some investors are putting on wagers that could pay off if Trump beats Harris
Caitlin McCabe - The Wall Street Journal
Some large hedge funds and money managers, sensing a potential shift in momentum, are getting behind trades that could pay out if Donald Trump beats Kamala Harris in the presidential election. While most polling still shows a tight race, that shift has rippled across markets in recent weeks, boosting assets seen as likely to benefit from a Republican victory. For instance, the private-prison operator GEO Group is up 21% in October, on pace for its best month since 2022, while the bitcoin miner Riot Platforms has risen 34%.
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Is the VIX Still Too Low?
Andrew Hecht - Barchart
In a late September 2024 Barchart article that addressed the stock market's October effect, I concluded:
Time will tell if there is an October effect in store in 2024, but the many issues facing markets and the potential for surprises suggest we could be in for a wild ride during the coming month.
The VIX index was at the 15.90 level on September 23, and even though there has been no significant stock selloff over the past month, the metric measuring the implied volatility of S&P 500 stocks has risen and may still be too low in the current environment.
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| | | | | | Miscellaneous | | | The stock market gains the most when this political party occupies the White House; The S&P 500's annualized total return has been 11.0% when a Democrat is president and Congress is Republican-controlled
Mark Hulbert - MarketWatch
The best Election Day outcome for the U.S. stock market in the 2024 election would be for U.S. Vice President Kamala Harris to win the presidency and the Republican Party to take control of both the House and the Senate. That's assuming the next two years follow the market's historical pattern since 1945.
Over the past eight decades, the S&P 500's annualized total return (inflation-adjusted) has been 11.0% in years when a Democrat is president and Congress is Republican-controlled.
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