| November 09, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Options Traders Pressed Short-Term Bets Against Coinbase
Eric Wallerstein - WSJ
Tuesday's crypto-exchange shakeup called options traders to action, betting against Coinbase Global to win quick profits.
Shares of Coinbase shed 11% yesterday while uncertainty spread across the industry. While CEO Brian Armstrong sought to assure investors his company was little-exposed to the mayhem shortly after the market closed, options traders had already swooped in to press bets against Coinbase.
/jlne.ws/3NRXWHS
Crypto Shock Hits ETFs (BITO, BITI) With Biggest Futures Fund Briefly Halted
Katherine Greifeld and Vildana Hajric - Bloomberg
The havoc engulfing the cryptocurrency universe is rattling the world of exchange-traded funds.
Trading in the $600 million ProShares Bitcoin Strategy ETF (ticker BITO) was briefly halted on Wednesday after the fund plunged more than 6% in a matter of minutes, triggering the exchange's downside volatility limit. The plunge came after a report that Binance is unlikely to follow through on its takeover of rival exchange FTX.com, according to people familiar with the matter.
/jlne.ws/3NPXiL9
Stocks Are Falling. The Market Was Looking for a Red Wave.
Jacob Sonenshine and Jack Denton - Barron's
The stock market was dropping Wednesday as votes for the midterm elections continued to trickle in. The market wants to see a red wave, but that's not looking like a certainty right now.
The Dow Jones Industrial Average has retreated 455 points, or 1.4%. The S&P 500 has dipped 1.5%, while the Nasdaq Composite has dropped 1.9%.
/jlne.ws/3WL4s7o
Why 2023 Earnings Forecasts Might Have Farther to Fall
Jacob Sonenshine - Barron's
The expectation broadly on Wall Street has been that 2023 earnings forecasts would drop after third-quarter results were in, as economic demand is expected only to weaken further. Now, the third-quarter earnings season is largely done, and yet analysts are still likely to lower their estimates even more from here.
/jlne.ws/3thjJQ0
Heavy stock-market volatility should run into 2023 as investors gauge whether the economy will have a soft or hard landing, says UBS
Carla Mozee - Business Insider
"Fatter" tail risks for the market would stem from divergences in activity between the goods and services sectors of the economy and the Federal Reserve's path of rate hikes.
"[Expect] more volatility and large market swings exacerbated by positioning as investors update their economic outcome probabilities in reaction to each new data point and Fed utterance," Jason Draho, head of Asset Allocation Americas at UBS Global Wealth Management, in a note.
/jlne.ws/3WLHY6i
Oil Market: Traders Clamor for Middle East Crude Amid Russia Uncertainty
Sharon Cho and Sherry Su - Bloomberg
Many of the world's oil refineries are rushing to try and guarantee supplies of Middle East crude for next year, fearful of what's to become of Russia's giant export program.
In under a month, almost all companies in the European Union will be barred from purchasing seaborne cargoes from Russia -- an attempt by the 27-nation bloc to punish the Kremlin for the invasion of Ukraine.
/jlne.ws/3NRcTKe
| | | | | | Exchanges | | | Howson on steering Cboe past potholes and traffic cops
Bernard Goyder - Risk.net
David Howson, who became global president of Cboe in May, likens market infrastructure to a motorway. "It's like joining a queue at a toll booth," says the head of the world's largest equity options exchange, which has a market capitalisation of $12.3 billion. "You've got some clerks that are faster at taking the money and doing things, and others that are slower.
/jlne.ws/3NIS2ZJ
What Sets NEO-L Apart
Cboe
In June 2022, Cboe officially completed its acquisition of NEO, the perfect complement to Cboe's existing Canadian offerings, MATCHNow and Cboe BIDS Canada.
NEO is a next generation stock exchange focused on fairness, liquidity, transparency and efficiency offering a diverse set of products and services ranging from corporate listings, cash equities trading and a non-listed securities distribution platform.
/jlne.ws/3TneZ5Q
FTX's Push for US Crypto Clearing Left In Suspense By Binance Deal
Jesse Hamilton - CoinDesk
The crypto industry has eagerly watched for a decision from the U.S. Commodity Futures Trading Commission to allow FTX to directly clear its customers' derivatives transactions, but that market-shaping application has entered murky territory. The potential Binance deal to acquire FTX leaves the ownership of the applicant - FTX US Derivatives - in flux, raising questions about whether and how the effort will proceed. The company's application, if approved by the regulator, could upend the way margin-backed derivatives trades are cleared, cutting out the long tradition of clearing houses in those markets.
/jlne.ws/3EeFExp
****** You have to wonder what this implosion will do to the credibility of the FTX clearing proposal. I would not want to be the CFTC commissioner who approved this proposal after this. I would at least put it on the back burner for some long term research to assess its potential implications. I would bury it right next to some of the Eurex clearing proposals at the CFTC that have not seen the light of day in years, or am I uninformed.~JJL
FTX Sale Could Complicate Derivatives Proposal
Dave Michaels - WSJ
FTX's troubles could complicate the efforts of its U.S. affiliate to change how derivatives trading is done here.
FTX.US owns a regulated exchange that offers trading in bitcoin and Ethereum futures and options. That exchange, known as FTX US Derivatives, has asked the Commodity Futures Trading Commission to approve a plan that would let investors deal directly with FTX instead of going through a broker. The proposal represents a sea change from the way derivatives markets have operated for decades.
/jlne.ws/3G3fAqq
Moscow Exchange starts trading in stock options
MOEX
The Moscow Exchange continues to develop a line of derivatives market instruments available to all categories of investors, including unqualified ones.
/jlne.ws/3fR1hug
Euronext announces volumes for October 2022
Euronext
Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris - 8 November 2022 - Euronext, the leading pan-European market infrastructure, today announced trading volumes for October 2022.
/jlne.ws/3NUCwKs
| | | | | | Regulation & Enforcement | | | Sam Bankman-Fried's FTX Empire Faces US Probe Into Client Funds, Lending
Bloomberg
US regulators are investigating whether beleaguered crypto-exchange FTX.com mishandled customer funds, and they're looking into the firm's relationships with other parts of Sam Bankman-Fried's crypto empire.
/jlne.ws/3FX3IpQ
G20 OTC derivatives reforms stall in filling remaining gaps
Wesley Bray - The Trade
The Financial Stability Board (FSB)'s latest report on OTC derivatives reforms across the G20 has found that while overall implementation across the 24 FSB member jurisdictions of the G20's over-the-counter (OTC) derivatives reforms was well advanced by 2021, only incremental annual progress is being seen in filling in the remaining gaps in implementation.
/jlne.ws/3A2qJDT
| | | | | | Moves | | | Cboe appoints a new head of software engineering
Professional Planner
Cboe has appointed Rylan Uherek to the role of head of software engineering, APAC.
Uherek previously worked for Cboe as the director of software engineering. Before this, he was a software engineering manager for Cboe Global Markets.
/jlne.ws/3TmA0O3
| | | | | | Strategy | | | A new approach to marking volatility of illiquid options
Mauro Cesa - Risk.net
Valer Zetocha, head of quantitative services for equity and foreign exchange at Julius Baer, calls it an "old" problem, but a "very important one".
Liquidity in options that reference rarely traded assets is bound to vary across maturities. Marking the volatility of those maturities is challenging, making it difficult to build a volatility surface that is arbitrage-free and consistent with market pricing.
/jlne.ws/3UMhNdX
Stock Market Outlook: October CPI Could Spark a 6% Move in the S&P 500
Matthew Fox - Markets Insider
Following the midterm elections, investors have shifted their focus to Thursday's October consumer price index report, and it could jolt markets in a big way depending on the data, according to JPMorgan.
The bank's trading desk ran a scenario analysis of where it expects the S&P 500 to trade depending on the CPI report. Economists surveyed by Bloomberg expect it to show a year-over-year headline inflation increase of 7.9%, which would be a decline from September's 8.2% reading.
/jlne.ws/3hqQnMc
| | | | | | Events | | | FINRA Firm Element CE & Annual Compliance Meeting
Exchange Analytics
This course is designed to satisfy FINRA registered firms' requirement to provide Firm Element Continuing Education and Annual Compliance Meeting requirements. It is offered in a semi-customizable format that allows you to choose from a comprehensive selection of topics in order to tailor the course to your firm's specific needs. It also allows you to add a limited amount of firm-specific content.
/jlne.ws/3fFntHR
| | | | | | Miscellaneous | | | No, You Aren't Going to Get Rich by Options Trading
Clark Randall - Jacobin
As of this August, ordinary investors, or what the media refers to as the retail market, have lost everything they came to the market with during the pandemic. The loss comes, amazingly, despite two consecutive years of record-breaking returns, amidst an unprecedented run of stock market euphoria.
As I wrote in Jacobin at the onset of the GameStop saga, the stock market is not a place where the average American can go to earn passive income; it is not a place where we can make up for stagnating wages across the last half-century by way of wise, well-timed moves. Like the workplace itself, for most of us the stock market is simply another arena of capital extraction.
/jlne.ws/3EkElNA
Why Wall Street Loves Gridlock in Washington
Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni - NY Times
It's become a favorite data point among sell-side Wall Street historians: In the year after every midterm election since 1950, the S&P 500 has gone up, regardless of the party in power.
"It's no exaggeration to say that midterm elections are one of the best historic buy signals for equities we have," Jim Reid, a markets strategist at Deutsche Bank, wrote in a client note this morning.
/jlne.ws/3zWymvJ
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