| October 17, 2018 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Options Market Quality Hovers at Best Levels in Five Years
TABB Forum Options LiquidityMatrix
Year-to-date options volumes remain strong, with September 2018 volume up almost 44% year over year. For the first nine months of 2018, more than 3.6 billion contracts have traded, an increase of 18.7% versus the first nine months of 2017.
/goo.gl/8g3D5Z
****SD: Due to the record setting pace in 2018, all exchanges are experiencing growth in volumes, however, market share is shifting a bit. "Cboe year-to-date market share has dropped, from 41.8% to 37.7%, and Nasdaq's share is down, to 35.4% from 36.8%. NYSE share is up, from 13.8% to 16.5%, and MIAX share jumped to 8.2%, compared to 5.6% through the first nine months of 2018. BOX also has gained share, up 0.1% from 2.1% last year to 2.2% in 2018."
SEC Ruling Takes Aim at Stock-Exchange Profits
Alexander Osipovich, Dave Michaels and Gretchen Morgenson - WSJ (SUBSCRIPTION)
In recent years, U.S. stock exchanges thought they had a guaranteed profit machine that could revive their sagging businesses: selling market data at ever-higher prices to a captive audience of Wall Street banks and traders.
/on.wsj.com/2Ero2S9
World Volatility Gauges Drop as Bulls Attempt Fight Back
Sid Verma - Bloomberg
After the storm comes the calm: Volatility gauges across currencies, stocks and bonds around the world are signalling a return to tranquility as option traders seek to shrug off recent market turmoil.
Expansive corporate earnings have given money managers a counterpoint to the lingering trade and late-cycle risks that helped fuel the rout. Even as U.S. stocks swung from a loss to a gain on Wednesday, volatility measures were well on the way to recovering from last week's blowout, signalling a potential return to range-band trading in the months ahead.
/bloom.bg/2EuAJM2
Stock market volatility: Traders doubling down on ill-advised shorts
Joe Ciolli - Business Insider
Sometimes old habits die hard.
That's definitely the case when it comes to one hot-button trade that still has legions of participants despite an ugly blowup earlier this year.
We're referring, of course, to volatility short selling. After a market shock in early February caught traders off guard and forced them to cover positions, billions of dollars were erased from popular investment products. Some even dissolved entirely.
/read.bi/2EvPRIT
****JB: We had a similar Bloomberg article on this yesterday.
Start Worrying if There's Another Stock Market Correction
Howard Gold - Barron's
Over the weekend friends and family members asked me what was going on with the stock market. My answer was: How should I know?
As of Thursday's (Oct. 11) close, the Dow Jones Industrial Average had fallen 6.6% from its Oct. 3 record high, the S&P 500 Index had slid 6.9% and the Nasdaq Composite Index had lost 9.6% from its Aug. 31 peak, near the 10% decline pundits usually define as a correction. (Stocks recovered Friday, but trading was mixed Monday before markets rallied on Tuesday.)
bit.ly/2EnH1Ng
It Only Took 24 Hours for Colossal Sentiment Shift: Taking Stock
Arie Shapira - Bloomberg
You might be raising an eyebrow after checking your mobile this morning only to see the futures down.
Many would have guessed that "Netflix" was reason enough to think that the 59-handle melt-up in the S&P 500 on Tuesday would see a bit of follow through today (granted the QQQs are up 0.6%, naturally). And it's true that the Netflix blowout was important for general market vibes -- I previously called this report the most crucial company-specific catalyst for the week and perhaps all of third-quarter earnings season -- but the company stands on its own a bit when it comes to true read-across to the rest of the FAANGs or the tech complex.
/bloom.bg/2EvQ9zt
Cramer's charts of the fear gauge suggest sell-off pain isn't over yet
Elizabeth Gurdus - CNBC
As strong as Tuesday's rally was, it may not mark the end of the sell-off that ravaged stocks in last week's trading, CNBC's Jim Cramer said.
Looking at the Cboe Volatility Index, also known as the market's "fear gauge" or the VIX, Cramer and volatility expert Mark Sebastian determined that stocks could see another leg of pain even after Tuesday's surge.
/cnb.cx/2Eq5scP
Oil rises on surprise draw in U.S. crude stockpiles By Reuters
Christopher Johnson - Investing.com
Oil prices rose for a fourth day on Wednesday after industry data showed a surprise decline in U.S. crude inventories and tension over the disappearance of a prominent Saudi journalist stoked supply worries.
bit.ly/2EsPgrk
| | | | | | Exchanges and Clearing | | | Shares of US exchanges slip as data fees battle intensifies
Philip Stafford, Nicole Bullock and Kadhim Shubber - Financial Times
Shares of US stock exchanges fell after regulators sided with banks and took aim at the fees the exchanges charge for valuable data on the world's biggest equity market.
The Securities and Exchange Commission on Tuesday gave a highly unusual rebuke to the New York Stock Exchange, a unit of ICE, and Nasdaq, saying they could not justify previous increases in fees for lucrative streams of market data  an increasingly contentious resource.
/on.ft.com/2EsNeYs
NYSE Responds to SEC Decision on Certain Market Data Fees
Intercontinental Exchange
Following the SEC decision regarding market data fees relating to NYSE Arca book, as published on October 16, the NYSE has put forward its official statement on the matter:
This decision represents a troubling shift by the SEC from its core mission of ensuring the long-term health of our financial markets to an agenda of regulatory overreach, prioritizing the interests of powerful Wall Street interests over those of retail investors and listed companies. We believe the Commission's decision will not withstand our challenge.
Based on our initial analysis of the SEC's decision, we do not believe there will be any immediate change to the products that we deliver to customers or their associated fees.
bit.ly/2EBy3Mm
| | | | | | Strategy | | | What's Wrong With Buying The Dip?
Steve Sears - OCCAM (SUBSCRIPTION)
Of all the commentary generated by the stock market's recent turbulence, one short comment that was recently made on Twitter sums up the greatest risk facing investors. Last week, when equities were broadly lower, an investor tweeted that he wondered how long until the stock market recouped its recent losses.
bit.ly/2EpBfL9
GOLDMAN SACHS: Investors are making extraordinary bets that these 15 stocks will explode higher before the end of the year
Akin Oyedele - Business Insider
If the past few days have demonstrated anything, it's that volatility is back in the stock market and could remain through the end of 2018.
This makes it important for investors to gain exposure to stocks that could experience an end-of-year surge, coupled with strong hedges.
/read.bi/2Eqlvrj
Pound Option Traders Are Not as Short as Risk Reversals Suggest
Vassilis Karamanis - Bloomberg
While the option market is the most bearish on the pound in two years amid Brexit anxiety, it's by no means a one-way street.
Demand for sterling calls has been almost as strong as that for puts since mid-June, data from the Depository Trust & Clearing Corporation show, even as risk reversals showed faster increases in the cost of contracts to bet on pound weakness.
/bloom.bg/2EBLjRw
| | | | | | Events | | | Webinar: Managing Risk With Listed Options - Thursday, October 18, 2018
OIC Webinar
The versatility of listed options is well-documented. While they can be used for generating income or as a way to acquire stock, there's another important role options can perform for investors - risk management. On Oct. 18, join OIC for an engaging webinar focusing on risk management techniques that can only be found with listed options. Register now, and get ready to learn about strategies, time frames, volatility and much more.
/goo.gl/emqu5v
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