| October 02, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
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 Open Outcry trading - Yes, it still exists: Futures Discovery EP 13 JohnLothianNews.com In the captivating world of futures trading, open outcry stands as a testament to tradition, even in an era dominated by electronic trading. As we explore this unique method of trading, we uncover the reasons behind its persistence and the vibrant community that thrives within the trading pits. Watch the video »  Piebe Teeboom - FIA European Principal Traders Association Watch Video »
| | | | | | Lead Stories | | | Options Scenario That's Led to Hong Kong Stock Gains Is Back; Hang Seng, VHSI are heading for record correlation this year; Investors poised to come back to China, HK: Value Partners
Sangmi Cha - Bloomberg
For six straight days, Hong Kong's benchmark stocks gauge and a measure tracking the cost of its options moved in the same direction. The last time that happened, the Hang Seng Index went on to surge 30% in about two months. Only time will tell whether Chinese and Hong Kong markets will climb further, but for now the bull spirits have definitely come out. The Hang Seng surged 16% in the five days through Monday, its biggest rally in more than two years, and China's CSI 300 Index staged its best daily jump since 2008 to close in a bull market.
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Yuan Options Bets Reveal Jitters Over China Stimulus Impact; Option premium to hedge yuan rally has dropped around 80%; Potential Trump win in US election is a headwind for the yuan
David Finnerty and Ruth Carson - Bloomberg
Market euphoria around China's stimulus blitz is at risk of sputtering sooner rather than later, if yuan option wagers are any guide. The volume of dollar-yuan trading surged last week in the $300 billion-plus foreign-exchange options market, according to Bank of America and Citigroup Inc. Traders have been betting on an appreciation of China's currency over the coming month - but beyond that short-term move, the outlook is far less certain.
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ETF flows smash record in third quarter; More than $500bn pumped into the fund format despite volatile markets
Emma Boyde - Financial Times
Quarterly flows into global exchange traded funds have smashed previous records with investors throwing half a trillion dollars worth of new money into the vehicles over the past three months.
Data from ETFGI, a consultancy, indicates that $501bn of net new money had already flowed into ETFs by the end of trading on September 27, which means that with one trading day to go until the end of the third quarter flows had already soared past the previous record of $398bn set in the first quarter of this year.
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Hedge Funds Pile Into China Looking for Any Way to Gain Exposure; Investors 'don't even need to stock pick,' GAO Capital says; Hedge funds made record purchases of China shares: Goldman
Ruth Carson and John Cheng - Bloomberg
Hedge funds are piling into Chinese stocks at a record pace on bets Beijing's stimulus blitz will speed up the recovery of the nation's struggling economy.
US-based Mount Lucas Management has entered into bullish positions on China exchange-traded funds, while Singapore's GAO Capital and South Korea's Timefolio Asset Management are buying Chinese large cap stocks. Tribeca Investment Partners in Sydney is snapping up proxies such as Australian miners.
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China Fears Are 'Massively Overblown,' ANZ CEO Elliott Says; Bearing with volatility is a bank's job, Elliott says; Elliott's comments come days after China stimulus announcement
Ambereen Choudhury and Harry Brumpton - Bloomberg
ANZ Group Holdings Ltd. Chief Executive Officer Shayne Elliott said fears about the "demise of China" as an investment destination are "massively overblown," with the bank seeing brisk business in the country.
"Our business in China is going great," Elliott said at an AustCham Singapore event on Wednesday, even as he admitted that operating there is "bumpy" and "complicated."
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Bank of England warns of 'future stress' from hedge fund bets against US Treasuries; Report also identifies geopolitical turmoil and cyber attacks as major risks to UK financial stability
Martin Arnold - Financial Times
The Bank of England has warned of rising "vulnerabilities" in the financial system stemming from increased bets by hedge funds against US government bonds, which reached a record high of $1tn in recent months.
The BoE said on Wednesday that if hedge funds unwound these "short" positions it would have "the potential to amplify the transmission of a future stress". These short bets are often part of so-called basis trades, where hedge funds aim to profit from small discrepancies between prices of US Treasuries and futures contracts linked to them.
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| | | | | | Exchanges | | | Trading in Tuesday and Thursday Crude Oil Options Surpasses 100,000 Contracts as Demand Soars
CME Group
CME Group, the world's leading derivatives marketplace, today announced that combined trading in its Tuesday and Thursday Crude Oil Weekly options has surpassed 100,000 total contracts traded since launching on July 22, 2024. This week, more than 50,000 Crude Oil Weekly options also traded on a single day for the first time ever as demand for short-term options soars.
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Cboe BIDS VWAP-X: Introducing venue-based trajectory crossing to Europe
Cboe
Natan Tiefenbrun, Cboe's president for North American and European equities, and Stephen Berte, President of BIDS, discuss Cboe BIDS VWAP-X, its benefits and why Europe is ready for this type of execution mechanism.
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CME Group Sets New, All-Time Quarterly and September ADV Records Driven by Growth Across All Asset Classes
CME Group
CME Group, the world's leading derivatives marketplace, today reported its Q3 and September 2024 market statistics, with average daily volume (ADV) reaching new, all-time records of 28.3 million contracts in Q3 and 28.4 million contracts in the month of September, and growth across all asset classes in both periods.
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New Thai Bourse Chief Vows Steps to Restore Investor Confidence; Asadej plans to synchronize measures to bolster capital market; Former Deloitte executive sees brighter prospects for stocks
Anuchit Nguyen - Bloomberg
Thai stock exchange's new chief plans to prioritize restoring investor confidence in the nation's capital market that's been dented by a number of corporate scandals, concerns over illegal short selling and a spell of political turmoil. Asadej Kongsiri, a former Deloitte executive who took over as the president of Stock Exchange of Thailand last month, said the bourse has already taken a number of measures in recent months to address investor concerns, and he will now focus on speedier implementation.
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| | | | | | Regulation & Enforcement | | | CFTC Charges Florida Man with $600,000 Options Fraud; CFTC Seeks Disgorgement from Relief Defendants; Michael Frederick Staryk was already subject to a CFTC order for fraud
CFTC
The Commodity Futures Trading Commission today announced it filed a civil enforcement action in the U.S. District Court for the District of Connecticut charging fraud against Michael Frederick Staryk of Florida. The complaint alleges from at least 2021 through at least 2022, Staryk, individually and d/b/a Magestic World Wide Finance or Magestic World Wide Solutions, and others, engaged in a deceptive scheme in which they fraudulently solicited and obtained at least approximately $600,000 from at least 26 retail clients in the United States purportedly for trading in options on commodity futures contracts. In fact, the promised trading did not occur, and client funds were deceitfully obtained and misappropriated.
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| | | | | | Strategy | | | China Is Looking Like a Hot Investment Again. Look Before You Leap In.
Steven M. Sears - Barron's
China is a great investment-if you don't look at the past too closely.
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| | | | | | Miscellaneous | | | How a Short Seller's Attack Threatens This Spanish Family Company; Grifols listed its shares to get more capital. In the end, it's likely to cost the founder's descendants control of the 80-year-old drugmaker.
Clara Hernanz Lizarraga and Rodrigo Orihuela - Bloomberg
For more than eight decades, the descendants of Josep Antoni GrÃfols Roig ran the pharmaceutical company he founded in the wake of the Spanish Civil War. But following a critical report from New York short seller Gotham City Research in January, shares in Barcelona-based Grifols SA tumbled by a third-and today the family is on the cusp of losing control.
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Carl Icahn's cone of silence; The first rule of working for Icahn: do not talk about working for Icahn
Maria Heeter - Financial Times
Star corporate raider Carl Icahn has offered his longtime chief financial officer, Ted Papapostolou, a juicy new contract extension to 2028. But it comes with some onerous strings attached. There's no doubt Papapostolou deserves a payday, having spent a lot of time extinguishing fires recently. First came last year's short attack by Hindenburg Research, which sent the shares of Icahn Enterprises LP (IEP) tumbling. More recently, Papapostolou had to settle SEC charges over pledging company securities as collateral for personal loans.
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AQR's Asness, Liew Donate $60 Million to University of Chicago
Janet Lorin - Bloomberg
Clifford Asness and John Liew, hedge fund managers with five University of Chicago degrees between them, are giving $60 million to their alma mater, days after the school announced a separate $100 million gift. The co-founders of quant firm AQR Capital Management made the donation to support a master's in finance program at the Booth School of Business, where both earned MBAs, the school said Tuesday. They also earned Ph.D degrees at the university.
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