| January 24, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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Long Put, Buying Put Options - Term of the Week
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| | | | | | Lead Stories | | | Options Traders Bet Trump-Tied SPAC Can Double Again in Days
Carly Wanna - Bloomberg
After Digital World Acquisition Corp.'s wild surge, some options traders are betting shares may double within days.
Options volume in the stock has soared in the past two sessions, with a record number of contracts having already changed hands this week. Meanwhile, shares of the firm â a blank-check company seeking to take Donald Trump's social media firm public â have jumped as much as 100% since Monday morning.
/jlne.ws/3ScGiRL
Hedge Fund Qube Built a $1 Billion Short Bet Against Top German Companies; Qube added to positions against German firms this year; Volkswagen, Deutsche Bank among those being wagered against
Neil Callanan and Nishant Kumar - Bloomberg
Qube Research & Technologies Ltd. has amassed a short bet of more than $1 billion against German companies amid a downturn in global demand that's slowing Europe's biggest economy.
The hedge fund added to wagers against the likes of automaker Volkswagen AG over the last two weeks, including disclosing a $131.8 million short against Deutsche Bank AG, according to data compiled by Bloomberg from regulatory filings. It's the biggest disclosed short seller of the country's stocks, the data show.
/jlne.ws/3UjKjGy
Probe inside crop giant ADM raises questions about nutrition bet; US agribusiness has sought to expand beyond bulk commodities trading and processing
Susannah Savage - Financial Times
Archer Daniels Midland aggressively expanded into nutrition and food ingredients in 2014, aiming to build a hedge against the volatility of the commodity trader's other businesses and shore up its income stream. A decade later, the nutrition business has plunged one of the world's largest agricultural trading houses into turmoil.
/jlne.ws/48J91EY
How the Best Hedge Funds Are Smoking the Competition
Bill Alpert - Barron's
The stars of the hedge fund world used to take big swings and sometimes hit grand slams, like John Paulson when he shorted the U.S. housing market before the 2007-09 financial crisis and made $20 billion.
But swing-for-the-fence hedge funds haven't been the big winners in recent years. Instead, the best returns have come from the multistrategy, multimanager hedge funds that rivals derisively call "pod shops."
/jlne.ws/3SvaA3D
Spirit Airlines is the latest meme stock amid 131% spike
Matthew Fox - Markets Insider
Spirit Airlines has turned into the latest meme stock in what has been a wild week of trades for the low-cost airline.
The drama first unfolded last week, when a court blocked JetBlue's proposed $3.8 billion takeover of Spirit Airlines due to concerns about competition within the airline industry.
/jlne.ws/42dnk1X
China short sellers retreat as contrarians sense an opportunity
Summer Zhen - Reuters
Global investors aren't expecting much from China's economy this year, but some say the collapse in its already cheap stocks merits a wager on an eventual rebound and perhaps a new approach to investing in the market.
Measures such shrinking short positions, fund flows, options pricing and bounces on the main boards show investors have been selectively buying or at least curtailing bearish bets lately.
/jlne.ws/3vRLXW4
| | | | | | Exchanges | | | December 2023 SEF trading activity
FIA
Trading volume on swap execution facilities reached $849.8 billion in average notional value per day during December 2023. This was down 31.1% from the previous month but up 13.5% from the same month of the previous year. Compared to November 2023, trading was down in every sector.
Trading of interest rate swaps and other non-FRA rates products was $618.2 billion per day in December. This level was down 35.5% from November 2023 but up 6.9% from December 2022. Tradeweb had the largest share of trading volume with 53.3%. Tullett Prebon had the second highest share with 14%.
/jlne.ws/48KMLul
| | | | | | Technology | | | Vermiculus delivers Microservice-based VeriClear Solution to OCC
Vermiculus
Vermiculus Financial Technology, a global provider of clearing, trading and CSD technology, has delivered a microservice-based solution built upon on VeriClear, an elastically scalable, AI-powered, cloud-native, real-time risk system to The Options Clearing Corporation (OCC), the world's largest equity derivatives clearing organization. As part of OCC's ongoing development of its forthcoming platform, Ovation, OCC chose Vermiculus' modern and flexible solution with its superior microservices architecture that allows for deployment of a selection of microservices and applying changes on the fly.
/jlne.ws/3UcULj7
***** Vermiculus continues to deliver one microservice at a time.~JJL
| | | | | | Education | | | Risk vs. volatility: What's the difference
Tessa Campbell - Business Insider
While "risk" and "volatility" are sometimes used interchangeably, they don't mean the same thing. Understanding the difference between risk and volatility is crucial for investors to make smart decisions.
Defining how risk affects certain investable assets can help you recognize your risk tolerance (conservative, aggressive, or moderate) and contextualize market volatility in your investment portfolio.
/jlne.ws/48XKgok
| | | | | | Strategy | | | If Chaos Erupts, This Strategy Will Protect Your Stock Gains
Steven M. Sears - Barron's
When a Boeing jet door flew off at about 16,000 feet in the air and everyone was panicking, an intrepid passenger logged into his brokerage account to buy Boeing put options. By the time the plane had landed, the news had hit Boeing stock, and the puts were worth a fortune.
/jlne.ws/48OmJqa
Goldman Says Momentum Traders to Sell Stocks in 'Every Scenario'
Jan-Patrick Barnert and Farah Elbahrawy - Bloomberg
No matter which way markets go, Goldman Sachs Group Inc. says some traders are modeled to sell stocks over the next week.
Cullen Morgan, an equity derivatives and flows specialist at the bank, expects that commodity trading advisers, or CTAs that surf the momentum of asset prices through long and short bets in the futures market, could be forced to sell after building $129 billion in long positions.
/jlne.ws/483xfbX
Narrative
Cboe (Video)
/jlne.ws/49ac74F
| | | | | | Miscellaneous | | | Viewpoint - The Longview on China's Markets
Walt Lukken - FIA
In early January, I was in Beijing at the invitation of the China Securities Regulatory Commission to participate in the 20th annual meeting of its International Advisory Council. The IAC consists of market and regulatory experts from around the world who advise China's markets regulator on how to improve its regulations and open its markets to global institutional participants.
/jlne.ws/497a6pS
Wall Street's bargain with Trump; Many corporate leaders are misguided in playing down the risks of a second term for the Republican former president
Edward Luce - Financial Times
The Financial Times had only nice things to say about Benito Mussolini in a June 1933 supplement entitled "The Renaissance of Italy: Fascism's gift of order and progress". Trains were running on time, investment was humming and friction between capital and labour was a thing of the past. "The country has been remodelled, rather than remade, under the vigorous architecture of its illustrious prime minister, Signor Mussolini," wrote the FT's special correspondent.
/jlne.ws/428x8ud
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