| August 01, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | The former headquarters of Cboe Global Markets, or the CBOE as it was known when the building was constructed, has been sold to a joint venture of Chicago real estate firms Prime Group and Capri Investment for $12 million, Crain's Chicago Business reported. The sale was first reported by CoStar, a real estate information service. Cboe vacated the 350,000-square-foot 400 S. LaSalle St. building in 2022 after moving its headquarters to the Old Post Office in 2020. Cboe also relocated its trading floor back to the CBOT Building, where it had originally been. It appears Cboe had to sweeten the deal to persuade the real estate firms to take the building, as Crain's reported that a Cboe-led venture provided a $7 million loan to finance the deal.
The plans for the building include transforming it into a giant data center, which makes a lot of sense. The building has access to megawatts of electricity and cooling from its days as an exchange-two critical requirements for data centers. Additionally, given that the elevated train tracks are just outside the front door on the north side of the building and LaSalle Street Station for the Rock Island District line is just south of the building, noise pollution is not a significant concern. It is already present.
What is remarkable is how quickly Chicago Loop real estate has deteriorated in value, despite the continued importance of location. Directly across the street from the former Cboe headquarters is the CBOT Building, where the CME Group sold its remaining holding, the 333 S. LaSalle Street Building, to ComEd in 2022 for $39.5 million. ComEd is converting the former "Arboretum" trading floor and related spaces into a power substation, expected to be completed in 2026, according to this 2022 Chicago Sun-Times story. The 333 S. LaSalle Building is just across Van Buren Street from the 400 S. LaSalle Building, which sold for only $12 million, despite having 350,000 square feet compared to 333's 300,000 square feet. Both buildings have similarly uninspiring box-like architecture.
Of course, Chicago is not alone in this commercial real estate deflationary phenomenon. The New York Times today reports that a 23-Floor Manhattan office building just sold at a 97.5% discount. The office building at 135 West 50th Street in Midtown Manhattan, which is only 35 percent full, sold for $332 million.
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Flextrade VP Rob Brogan Discusses AI, Zero-day Options, and Algo Innovations at Options Conference
JohnLothianNews.com
Rob Brogan, vice president of equity derivatives at Flextrade, was interviewed by John Lothian News at the Options Conference in Asheville, NC, for the JLN Industry Leader video series sponsored by the OCC. Brogan shared his thoughts on the conference, Flextrade's algo offerings, and artificial intelligence.
Watch the video »
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Unlocking Market Potential: Frank Somma Discusses SIX Clearing's Innovative Solutions and T+1 Impact
JohnLothianNews.com
Frank Somma, senior sales manager at SIX, recently shared insights on the benefits of central counterparty (CCP) clearing and SIX Clearing's offerings in an interview with John Lothian News at FIA's International Derivatives Week in London.
Watch the video »
| | | | | | Lead Stories | | | Oil Traders Load Up on Most Options Since April on Mideast Risks; More than 300,000 lots of Brent call options traded Wednesday; Odds of regional escalation rise as Israel and Iran face off
Yongchang Chin - Bloomberg
Oil traders have loaded up on call options as a spike in tensions in the Middle East raises the possibility of a surge in prices. More than 300,000 Brent call option contracts traded on Wednesday, the largest one-day amount since the last round of elevated regional tensions in April. The volume was dominated by large call spreads, which offer cheaper ways to profit from a rally, including $87 and $90 spreads for October, as well as $110 and $130 spreads for November. Brent was last near $81.
/jlne.ws/3Wq78bj
US options market hits all-time daily volume record in July
Radi Khasawneh - FOW
The US options market reached a new high last month, driven by elevated activity in both single stock and exchange traded fund derivatives, according to data compiled by Cboe Global Markets.
/jlne.ws/3WLEz9p
Nvidia Adds Record $329 Billion in Value as Volatility Soars; ChipmakerâEURâ¢s shares have been twice as volatile as Bitcoin; Swings of $100 billion have become routine for Nvidia
Subrat Patnaik - Bloomberg
Nvidia Corp.âEURâ¢s wild ride this week is headed for the record books.
The worldâEURâ¢s third-most-valuable company has added a record $329 billion in value âEUR" obliterating the single-day record that it has repeatedly set in the past few months.
The 13% rally comes a day after a 7% rout wiped out more than $193 billion from the now $2.9 trillion company, continuing a run of volatility that makes even notoriously turbulent assets like Bitcoin look stolid.
/jlne.ws/3SwlVjo
Europe's energy crisis is over, signals Shell boss; Gas, crude and power prices have dropped back and stabilised to levels before Ukraine war, notes Wael Sawan
Malcolm Moore - Financial Times
The energy crisis in Europe is finally over, the chief executive of Shell signalled, as market prices and volatility return to levels before Russia's full-scale invasion of Ukraine in February 2022. "We have seen that across the energy complex this quarter, maybe more so than any of the previous ones in recent times, that we are moving back to a normalised price and margin level that is pre-2022," said Wael Sawan in an interview with the Financial Times, adding that gas, crude and power prices had all dropped back and become more stable.
/jlne.ws/4c8v8W3
European and Asian Prop Traders Outperform US Firms
Press Release
Proprietary trading firms have experienced challenging trading conditions in the first half of 2024, however, almost half experienced better conditions than in 1H 2023, the latest Acuiti Proprietary Trading Management Insight Report has found. Most notably, in this quarterâEURâ¢s Proprietary Trading Management Insight report, US-based proprietary trading firms experienced some of the weakest performance. This bucks a long-standing trend of out-performance against their peers in Europe and Asia and is largely explained by reduced volumes in US options markets.
/jlne.ws/4fpnuJL
Opinion: Stock market bulls are dangerously close to losing control to the bears
S&P 500âEURâ¢s critical support is 5,370
Lawrence G. McMillan - MarketWatch
The S&P 500 Index (SPX) turned down in mid-July, establishing a short-term series of lower highs and lower lows. That set up a bearish scenario, but the bulls have fought back with a monster one-day rally surrounding the FOMC meeting, which culminated on Wednesday.
If SPX can close above 5,585, that would negate the bearish pattern and potentially set up the way to new all-time highs. However, if this resurgence by the bulls proves to be nothing more than an oversold rally, then we will watch the important support area at 5,370. If that is broken on the downside, the bears will certainly be able to extend the decline quickly from there. So, those remain the two important levels for now âEUR" 5,585 and 5,370.
/jlne.ws/46zwb03
Wall Street's volatility gauge hits highest level since mid-April
Jason Capul - Seeking Alpha
Concerns over economic growth and worries that the Federal Reserve is not easing monetary policy fast enough has led to a selloff in U.S. stocks on Thursday, while also sending Wall Street's volatility gauge to its highest reading since mid-April. Into the final hour of trading, the S&P VIX Index (VIX) had surged 15.7% to 18.93, and was on track for its biggest closing level since April 15.
/jlne.ws/3WMoVLb
US body launches hedge fund data aggregation tool
Gregory Rosenvinge - FOW
The US Office of Financial Research (OFR) has launched its new hedge fund monitor which visualises and aggregates data on hedge fund activities from several sources via one tool.
/jlne.ws/4do95eZ
| | | | | | Exchanges | | | Fee reduction for customer accounts in EURO STOXX 50 End-of-Day Index Options
Eurex
We are excited to announce that Eurex will be implementing a significant reduction in transaction fees on A-Accounts for the EURO STOXX 50 End-of-Day Index Options (OEXP). This fee reduction will be effective from September 1, 2024, to August 31, 2025.
/jlne.ws/3A2D3XA
Coinbase Quarterly Rebound Likely Hampered by Cooling Volatility; Exchange expected to return to profit, post revenue gain; Lower volatility likely led to volume drop from first quarter
Olga Kharif - Bloomberg
Despite expectations for a doubling in revenue and a jump in profit, Coinbase Global Inc. is at risk of falling victim to a drop in volatility when it releases second-quarter results. The unpredictable nature of token price swings have been one of the bigger challenges for the largest US cryptocurrency exchange since it was first listed as a public company in April 2021. Coinbase's trading volume and revenue are forecast by analysts to drop from the first quarter, and the exchange appears to have lost market share. "I think people would pay some attention to the sequential decline, and pay less attention to year-over-year improvement," said Owen Lau, an analyst at Oppenheimer & Co. Inc., who has an "outperform" rating on Coinbase's shares.
/jlne.ws/46t88A2
Former Cboe HQ in Chicago acquired, to be converted into 50MW data center; Building acquired for $12 million
Dan Swinhoe - Data Center Dynamics
An office building in Chicago, Illinois, has been bought and is set to be converted into a data center. Citing Cook County property records, CoStar reports an affiliate of real estate firm Prime Group bought 400 S. LaSalle St. from options exchange company Cboe Global Markets for $12 million. Cboe's former HQ acquired by Prime Group, to be made into a data center âEUR" Google Maps The 385,000-square-foot (35,770 sqm), six-story office building previously served as CboeâEURâ¢s headquarters. The company first confirmed plans to move out of and eventually sell 400 S. LaSalle in 2019.
/jlne.ws/3A0I1UL
| | | | | | Regulation & Enforcement | | | Futures & Options Saga: Experts Say Sebi Proposal To Reduce Volumes, Bring Down Volatility Namit Singh Sengar - News 18
Markets regulator SebiâEURâ¢s proposal on tightening rules for index derivatives if implemented may result in erosion of volumes from Futures & Options (F&O), experts said on Wednesday. At the same time, it will enhance investor protection and promote market stability in derivatives markets, they added. In its consultation paper on Tuesday, the regulator proposed seven measures, including increasing minimum contract size and upfront collection of option premiums, intra-day monitoring of position limits, rationalisation of strike prices, removal of calendar spread benefit on expiry day and increase in near contract expiry margin.
/jlne.ws/3yaRnNq
| | | | | | Technology | | | Abaxx and MineHub Announce Strategic Partnership to Transform Commodities Markets
Abaxx
MineHub Technologies Inc. (TSXV: MHUB, OTCQB: MHUBF) ("MineHub" or the "Company"), a leading provider of digital supply chain solutions for the commodities markets, is pleased to announce that it has entered into a share exchange agreement (the "Share Exchange Agreement") with Abaxx Technologies Inc. (Cboe: ABXX, OTCQX:ABXXF) ("Abaxx") for the purposes of developing a strategic partnership to drive digitization more broadly within the physical commodities markets. Abaxx, an indirect majority-owner of Abaxx Exchange and Abaxx Clearing, has developed and deployed technologies that unlock latent value in global markets with products that make communication, trade, and transactions easier and more secure. The companies share a joint mission to improve data transparency and empower market participants with better tools to meet the ever evolving commodities landscape, which is facing new challenges such as the energy transition and increasing regulatory pressure. Comprehensive digital tools are more necessary than ever to adapt to a changing market environment.
/jlne.ws/3WMK87C
| | | | | | Strategy | | | Stock Market Volatility is Rising. ItâEURâ¢s Time for Caution.
Patti Domm - Barron's
About the author: Patti Domm is an Emmy AwardâEUR"winning financial journalist.
It feels like something is brewing in the stock market.
Like a nearby summer storm, volatility has rumbled through the market with upswings and downswings in July. The easyâEUR¯path higher may be at an end for now.
/jlne.ws/3WLQeoI
| | | | | | Miscellaneous | | | US Traders Flock to an Election-Betting Site They're Banned From; Wagers on US elections approach $1 billion according to site; Users can resort to virtual private networks to evade blockade
Lydia Beyoud and Sridhar Natarajan - Bloomberg
On the top floor of a luxe hotel outside the Republican National Convention, amid a coterie of neatly coiffed GOP operatives in tailored suits, one person stood out in his dark T-shirt and a mop of curly hair.
That was PolymarketâEURâ¢s Shayne Coplan. The 26-year-old college dropout was introducing himself as the force behind the crypto-betting platform, which takes wagers on everything from election winners to whether the US will confirm the existence of aliens. At one point, CoplanâEURâ¢s schmoozing got him a seat next to Donald Trump Jr.
/jlne.ws/3A6y2gJ
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