| August 22, 2018 | | | | | Spencer Doar
Editor
John Lothian News | |
|
| | | | Observations & Insight | | | EU expects delay in Brexit deal beyond October target
Gabriela Baczynska - Reuters
European Union leaders are likely to have to hold an emergency summit in November to consider any Brexit agreement struck with Britain, missing an informal deadline the previous month, diplomats in Brussels said.
/reut.rs/2w6N4zd
****SD: Who in their right mind thought this was going to go according to schedule? The Financial Times has EU vows to get tough on UK's market access after Brexit. From that story - "Dombrovskis said Brussels was not offering any kind of 'super equivalence' to the UK, and that assessments of whether Britain qualified would require individual assessments 'sector by sector and legislation by legislation.'" Does any of that sound like a quick process?
| | | | | | Lead Stories | | | A Messy Battle Brews in the Options Market; Craig Donohue, CEO of the only U.S. options clearinghouse, is clashing with traders over his plans
Gunjan Banerji - WSJ (SUBSCRIPTION)
Craig Donohue's turnaround plan for the nation's options clearinghouse has hit a roadblock. Mr. Donohue has boosted the prominence of Options Clearing Corp., which acts as a guarantor for every trade in the U.S. listed options market. ClearinghousesÂcritical parts of the financial systemÂcame under greater scrutiny after the last financial crisis and are responsible for preventing potential defaults from rippling through markets.
/jlne.ws/2PvwDVh
****SD: You sure can't please all the people all the time. And when the WSJ says brews, it's much more sluggish than that. Most beers don't take two-plus years to brew. One underlying issue here is the legacy ownership structure of the OCC. (Also, consider that when the shareholder payouts began, ISE was still in the picture.)
Volatility Trades Are Reborn as Two-Tier Market Spurs New Short
Yakob Peterseil - Bloomberg (SUBSCRIPTION)
Call it the volatility trade, squared.
As macro shocks hit global markets, a complex strategy that bets the gap between stock winners and losers will grow is spreading across hedge funds, real-money managers and even private banks.
The so-called dispersion trades offer a way to play a slew of market themes, everything from splits among tech stocks to the prey and predators of the M&A boom and the trade-war fallout.
/bloom.bg/2MH3KXx
S&P Says OCC Credit Rating Unaffected by SEC Approval of New Financial Safeguards Framework
OCC
OCC, the world's largest equity derivatives clearing organization, today commented on the August 21 bulletin by Standard & Poor's (S&P) saying that OCC's AA+/Stable credit rating remains unaffected by the approval of the company's new financial safeguards framework by the U.S. Securities and Exchange Commission.
bit.ly/2BzPsUe
Derivs now only used in ETFs when "essential"
Louisa Chender - Global Investor Group (SUBSCRIPTION)
Many fund investors don't want bank exposure in the form of derivatives, China Post Global's managing director says
/goo.gl/MXooX2
Getting the Volcker Rule Right May Be a Waste of Time
Mayra Rodriguez Valladares, MRV Associates - TABB Forum
As the Volcker Rule stands now it does not make the banking system any safer. There are significant shortcomings in the resources allocated to financial regulators for them to adequately monitor and enforce the Volcker Rule, and banks have inadequate systems and risk data aggregation to produce reliable metrics in order to comply.
bit.ly/2w4mC9B
Copper and the (very) big fund short
Andy Home - Reuters
Peace has broken out in the Chilean copper industry with two major potential labour flashpoints resolved in as many days.
Last Friday brought news that the major union at the Caserones copper mine had signed an 11th-hour deal to avert a walk-out. A day later came confirmation of a settlement at Escondida, the world's largest single copper mine.
/reut.rs/2nY3wNE
****SD: Check this out - "Activity in the CME's copper options market has mushroomed even faster. Turnover totalled 35,140 contracts last month, more than was traded in the whole of 2015."
| | | | | | Exchanges and Clearing | | | The art of designing markets. Part IV
Eurex Exchange
This is the fourth article in a series of topics related to the market design of electronic market places. The first article discussed the most common execution models in electronic derivatives markets, the second covered the various components of an order-generating process that define its arrival time, giving us an overview of the three steps market participants need to generate and submit an order to an exchange. The third reflected on the electronic exchange connectivity options for indirect exchange participants such as institutional and retail investors. This article does the same for the direct exchange participants i.e. the members of the exchange.
bit.ly/2BB50XW
CFTC Issues Orders of Registration to Osaka Exchange and Nasdaq Oslo ASA to Permit Trading by Direct Access from the U.S.
CFTC
The Commodity Futures Trading Commission (CFTC) announced today it has issued Orders of Registration to Osaka Exchange, Inc. (OSE), a Foreign Board of Trade (FBOT) located in Japan, and Nasdaq Oslo ASA (Nasdaq Oslo) an FBOT located in Norway. Under the Orders, OSE and Nasdaq Oslo are permitted to provide their identified members or other participants located in the U.S. with direct access to their electronic order entry and trade matching systems.
bit.ly/2LfTsc5
| | | | | | Regulation & Enforcement | | | Exchanges hope to escalate high-frequency trading case to Supreme Court
Declan Harty - S&P Global
The largest U.S. exchange operators have petitioned the U.S. Supreme Court to take up a case questioning whether exchanges favor Wall Street's fastest traders.
Brought in the wake of Michael Lewis' 2014 book Flash Boys, the case hinges on whether exchanges sell and offer products and services that illegally favor high-frequency traders over slower institutional investors such as pension and retirement funds. Plaintiffs in the case include the city of Providence, R.I., and a group of pension and retirement funds.
/goo.gl/Y38wEQ
| | | | | | Technology | | | Vela Partners With CoinMarketCap To Include Cryptocurrencies In SuperFeed
Vela
Vela, a leading independent provider of trading and market access technology for global multi-asset electronic trading, today announced a partnership with CoinMarketCap, the world's most trusted and accurate source of data for cryptocurrencies. This exclusive agreement marks a new addition to the asset class coverage for Vela's Market Data Feed service, SuperFeed.
/goo.gl/nz6jc4
****SD: Another provider expanding into crypto. However, users need to be aware that CoinMarketCap's spot calculations of price are based off a ton of different exchanges that don't necessarily reflect what you can actually get it for in an individual market. When I last checked, it was showing bitcoin $20+ higher than what it was going for on Coinbase and Kraken. Just something to keep in mind.
Interactive Brokers Tweaks Historic Data Settings On Mobile Application
David Kimberley - Finance Magnates
Interactive Brokers, an online trading broker, has made fresh changes to its mobile application. Launched this Wednesday, the broker has added new features for the viewing of past trade data.
bit.ly/2LjmGXE
| | | | | | Strategy | | | JP Morgan: Global stock markets doing something they've never done before
Tae Kim - CNBC
J.P. Morgan predicts international stocks will outperform the domestic market the rest of the year...
"The recent divergence in the performance of US Equities vs. the rest of the world is unprecedented in history. For instance, if one looks at price momentum - it is positive for US stocks and negative for Europe and Emerging markets across all relevant lookback windows [one month, three months, six months and 12 months]. This has never happened before," quantitative and derivative strategist Marko Kolanovic said in a note clients Tuesday.
/cnb.cx/2w2p0xq
Tech stocks diverging in 2018: BofAML trade idea
Business Insider Prime (SUBSCRIPTION)
The biggest US and Chinese tech stocks meld together into a convenient acronym  FAANG + BAT. But their fortunes are anything but similar right now.
Facebook, Amazon, Apple, Netflix, Google-parent Alphabet, Baidu, Alibaba, and Tencent are trading this year with a uniqueness that marks a sharp about-turn from their harmony in 2018, Bank of America Merrill Lynch observed.
/read.bi/2w3RmYc
****SD: The bank's recommendation is "buy Jan19 ATM calls on the individual FAANG+BAT stocks and sell a Jan19 ATM call on the FAANG+BAT basket for an indicative upfront cost of 2.5% (40% implied correlation bid)."
Short Squeeze Roils Wall Street's Favorite Bond Trade
Daniel Kruger - WSJ (SUBSCRIPTION)
A robust August rally in the Treasury market is foiling one of Wall Street's most popular trades, a bet that solid U.S. economic growth, rising inflation and eroding government finances will compel investors around the world to sell bonds.
/on.wsj.com/2o14nxj
| | | | | | Events | | | August 23 OIC Webinar: To Spread or Not To Spread - 3:30 p.m. - 4:30 p.m. CST
OIC
What makes more sense? Buying and selling straight calls and puts or creating a spread position? Join OIC and our panel of experts as they discuss this question to help you decide what is best for you. We'll also get into what strategies make the most sense for bullish and bearish situations.
/goo.gl/KdMSSh
| | | | | | Miscellaneous | | | Debt and Recovery Ten Years Later
David Blitzer - S&P Dow Jones Indices
Debt - actually too much debt - played a leading role in the 2008 financial crisis. A mortgage borrowing binge and a flood of mortgage backed securities set the stage for the collapse of Lehman Brothers and recession that followed. In the immediate aftermath almost every part of the economy went through a period of belt tightening as debts were paid down.
Ten years after the financial turmoil, the economy is feeling good but people are still wondering if, or when, we will face another severe downturn or credit collapse. One place to gauge the risks whether debt levels are lower and we as borrowers have learned from experience.
bit.ly/2LhMhjG
Calling Bull on the Longest Bull Market
James Mackintosh - WSJ (SUBSCRIPTION)
Investors in big U.S. stocks will have no trouble believing that we are on the threshold of the longest bull market ever, with Wednesday setting a new "record" of 3,453 days. Quibbles about exactly what happened in 1990, 1998 or 2011 won't matter for those who had the foresight and luck to hold the S&P 500 during its 320%-plus run from the low of March 9, 2009.
/on.wsj.com/2w2hTFs
****SD: What's in a name? From the NY Times - Bull Market Hits a Milestone: 3,453 Days. Most Americans Aren't at the Party.
| | | | | | | | | JLN Options is sponsored by: | | | | | | | | | | | | | | | | | | |
|
|
| | | |
| | | | 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
Publisher | | | Sarah Rudolph
Managing Editor
| | | Jeff Bergstrom
Editor
| | | Spencer Doar
Editor
| | |
|
|
Disclaimer: All John Lothian Newsletters, JohnLothianNews.com, MarketsWiki.com and MarketsReformWiki.com are products of John Lothian News, a division of John J. Lothian & Company, Inc. The opinions expressed in all John J. Lothian & Company, Inc. publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers. Futures and options trading involve risk. Past results are no indication of future performance. Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any website or newsletter content.
© 2017 John J. Lothian & Company, Inc. All Rights Reserved. |
|
|
