 | | | | | | | | November 18, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
Enhance your OPEC+ hedging strategy with WTI Crude Oil Weekly options. Add Friday (LO5) and Monday (ML1) WTI Crude Oil Weekly options to precisely manage crude oil price risk leading up to, and over, the weekend meeting. See how.
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Welcome to FIA EXPO Week, and WFE General Annual Meeting Week, and CME Group's GFLC Week and Benzinga's Future of Digital Assets '24 conference day. It is a busy week one way or another for many people in the derivatives and capital markets.
JLN will be starting our week by attending a regulatory spotlight forum and networking event sponsored by Eventus and Paul Hastings LLP, which will feature a special guest Ian McGinley, director of enforcement at the CFTC. I will be at the opening cocktails for the FIA EXPO later at the Sheraton Grand Riverwalk, where the EXPO is being held.
We will be set up for our video interviews inside the entrance to the exhibit hall to the left, as we were last year. We have a busy schedule of interviews with a diverse group of industry executives. If you get the chance, stop and say hello.
CFTC Commissioner Kristin N. Johnson is scheduled to participate in a panel discussion titled "Impact of Technology and Modernization of Clearing" at the Futures Industry Association's Futures & Options Expo 2024. The session will take place on Tuesday, November 19, 2024, at 1:40 p.m. CST (2:40 p.m. EST) at the Sheraton Grand Chicago Riverwalk. ~JJL
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From Pit to Profit: One Trader's Journey from Market Crash to Market Maker
JohnLothianNews.com
When Kevin Jamali first stepped onto the trading floor of the Chicago Board of Trade, he wasn't just reaching for financial success-he was seeking redemption for a childhood trauma he barely understood.
Watch the video »
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Picking a Broker: Futures Discovery EP 16
JohnLothianNews.com
Choosing the right broker is fundamental to your trading success. This process involves several important considerations to ensure you select a broker that meets your needs and helps you achieve your trading goals. First and foremost, it's essential to verify the broker's regulatory compliance. Make sure they are registered with appropriate regulatory bodies, such as the U.S. Commodity Futures Trading Commission, CFTC. This registration is a mark of legitimacy and ensures brokers adhere to the industry standards and regulations.
Watch the video »
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The Legal Mind Behind Futures Industry Landmarks, Part Four
JohnLothianNews.com
In the final segment of the John Lothian Profiles interview, veteran attorney William Nissen shared his thoughts on more landmark cases and the evolution of CFTC enforcement practices and their impact on the industry.
Watch the video »
| | | | | | Lead Stories | | | Options Traders Unwind Bullish US Stock Wagers on Rate Concerns
David Marino and Natalia Kniazhevich - Bloomberg
Some of the bullish trades put on in the days around the US presidential election are being unwound as the prospect of slower interest-rate cuts have helped halt the stock rally.
One of the trades was to buy puts on the Cboe Volatility Index, betting that swings would ease with stocks gaining after uncertainty surrounding the presidency was cleared away. Puts snapped up at 15, 14 and even 13 strikes paid off when the VIX dropped below 14, even if over the first couple of days the cost of the options dropped so much that the crush in volatility wasn't enough to boost the value of the contracts.
/jlne.ws/3ZcK6qU
Nasdaq Poised to List Spot-Bitcoin ETF Options as Crypto Assets Rally; Bitcoin ETF options could trade as soon as Tuesday: Hennessy; BlackRock's IBIT has amassed nearly $30 billion since launch
Isabelle Lee and Katie Greifeld - Bloomberg
Nasdaq Inc. is planning to list options on BlackRock Inc.'s Bitcoin exchange-traded fund, possibly as soon as Tuesday, allowing investors to use derivatives to bet on or against the world's largest digital asset.
"Our intent at Nasdaq is to list and trade these options as early as tomorrow," Alison Hennessy, head of ETP listings at Nasdaq, said on Bloomberg's ETF IQ on Monday. "Getting these options listed on IBIT into the market I think will be very exciting for investors because that's really what we have heard from them."
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CFTC Clears Way for Spot Bitcoin ETF Options
MarketsMedia
The Commodity Futures Trading Commission's Division of Clearing and Risk issued a staff advisory relating to the clearing of options on spot commodity Exchange Traded Funds. These options are on shares of the ETFs registered with the Securities and Exchange Commission as securities and the shares are listed and traded on a SEC-registered national securities exchange. These ETF options are cleared and settled by the Options Clearing Corporation as the sole issuer of all equity options.
/jlne.ws/4ezF64e
OCC notice suggests impending launch for spot Bitcoin ETF options trading; Some experts suggested that options trading for shares of BlackRock's iShares Bitcoin Trust could launch on the Nasdaq as early as Nov. 19.
Turner Wright - CoinTelegraph
Following the United States Commodity Futures Trading Commission (CFTC) clearing the way for spot Bitcoin exchange-traded fund, or ETF, options, the Options Clearing Corporation (OCC) said it was preparing the launch of the investment vehicles.
In a Nov. 18 notice, the OCC said it was preparing for the "clearance, settlement, and risk management" of spot Bitcoin ETFs after the CFTC issued a staff advisory. According to ETF analyst Eric Balchunas, the notice suggested it was "a matter of when not if" US exchanges would list the crypto investment vehicles.
/jlne.ws/4hSMLgM
The Fear Is Creeping Back Into Markets
Callum Keown - Barron's
Investors aren't as relaxed as they were last week. In fact, they're getting more anxious by the day.
The market's so-called fear gauge-the CBOE volatility index (VIX)-was moving higher again Monday, rising 3% to 16.63. The VIX closed at its lowest level since July on Wednesday but has climbed 19% since then.
/jlne.ws/3YXAH5n
Funds plant most bullish CBOT corn bets in nearly two years
Karen Braun - Reuters
Despite a near-record U.S. corn harvest, speculators have built their most bullish stance in Chicago corn futures and options since February 2023 as U.S. exporters have recently posted some staggering sales volumes.
However, the optimism could have a shelf life because supplies remain ample.
In the week ended Nov. 12, money managers expanded their net long in CBOT corn futures and options to 109,989 contracts from 22,043 in the previous week. That move included funds' largest round of short-covering in six months.
/jlne.ws/4fVdW8H
China's Dream of 'Powerful Currency' Runs Into Trump's Return; Trade war risks have fueled yuan short bets after US election; Some analysts expect CNY to fall as much as 10% against dollar
Bloomberg News
China's President Xi Jinping wants a "powerful currency" that is stable enough to play a rising role in global trade. Donald Trump's return looks set to challenge that ambition.
The yuan risks years of downward pressure during the second Trump presidency, and the threat of another trade war is already fueling bets against the currency. Analysts expect the yuan to break a 17-year low against the dollar in 2025, with the most bearish observers predicting a decline of around 10%.
/jlne.ws/3AMD4Qe
MicroStrategy Buys $4.6 Billion of Bitcoin in Largest Purchase
Dave Liedtka - Bloomberg
MicroStrategy Inc. bought about 51,780 Bitcoin for around $4.6 billion, the largest purchase by the crypto hedge-fund proxy since it began acquiring the digital-asset more than four years ago. The enterprise software maker, whose corporate strategy includes buying the cryptocurrency, bought the tokens between Nov. 11 and Nov. 17, according to an US Securities and Exchange Commission filing on Monday. It now holds more than $29 billion in Bitcoin.
/jlne.ws/3YUdNvt
| | | | | | Exchanges | | | Clearing bottlenecks blamed for muted volumes at FMX; Regulatory hurdles and market conditions have also hampered CME rival since its September launch
Bernard Goyder and Lukas Becker - Risk.net
Limited clearing options, restrictions on non-US users and volatile market conditions have contributed to a slow start for FMX Futures Exchange, which launched on September 24 with aspirations of challenging CME Group's dominance in US rates derivatives. The BGC-owned exchange's volumes have so far been underwhelming compared with rival CME Group's rates complex. Open interest in three-month FMX futures linked to the US secured overnight financing rate (SOFR) stood at 1,807 contracts on November
/jlne.ws/3Ay3pBG
Abaxx to Increase Strategic Ownership in MineHub to 19.99%
Abaxx
MineHub Technologies Inc. (TSXV: MHUB) (OTCQB: MHUBF) ("MineHub" or the "Company"), a leading provider of digital supply chain solutions for the commodity markets, is pleased to announce the Company and Abaxx Technologies Inc. (Cboe CA: ABXX) (OTCQX:ABXXF) ("Abaxx") have entered into a Letter of Intent ("LOI") wherein Abaxx will increase its strategic ownership in Minehub from its current 10.83% interest to 19.99%. Abaxx will acquire 8,810,000 common shares of MineHub at a deemed price per share of $0.35 (the "MineHub Shares"), in exchange for $3,083,500 in cash (the "Abaxx Cash Payment") or the issuance of 237,192 Abaxx common shares (the "Abaxx Shares") at Abaxx's sole election prior to closing (the "Transaction").
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| | | | | | Regulation & Enforcement | | | CFTC Staff Issues an Advisory Related to Clearing of Options on Spot Commodity Exchange Traded Funds
CFTC
The Commodity Futures Trading Commission's Division of Clearing and Risk today issued a staff advisory relating to the clearing of options on spot commodity Exchange Traded Funds. These options are on shares of the ETFs registered with the Securities and Exchange Commission as securities and the shares are listed and traded on a SEC-registered national securities exchange. These ETF options are cleared and settled by the Options Clearing Corporation as the sole issuer of all equity options.
/jlne.ws/3ZbmItJ
| | | | | | Strategy | | | Cross-Asset Volatilities Rise on Rate Policy Uncertainty
Ed Tom - Cboe
Cross-asset volatilities advanced across the board as Boston Fed President S.Collins cautiously reinforced J.Powell's hesitancy to continue cutting rates in December. Interest rate volatility rose with the VIXTLT climbing 10 vols pts (53rd percentile) to 106 (82nd percentile) and Fed Fund futures are now pricing in a lowered chance of a rate cut on its Dec 18 meeting from 82% to 58%).
/jlne.ws/3Oj8Ze4
The options market sees more risk for the S&P 500 from Nvidia earnings than from the next jobs report, CPI or Fed meeting
Isabel Wang - MarketWatch
Nvidia Corp. is set to report its quarterly earnings on Wednesday after the closing bell.
While concerns about the postelection rally and interest-rate uncertainty continue to weigh on investors' minds, the options market is pricing in risk from Nvidia earnings on the broader stock market, according to BofA Global Research.
/jlne.ws/48UvQ9s
Options, Sentiment Backdrop Hinting at Trend Reversal; The market remains in its bull trend, but temper expectations this week
Matthew Timpane - Schaeffer's Investment Research
We saw profit-taking and volatility towards the end of last week. The S&P 500 Index (SPX - 5,870.62) retraced 61.8% -- a Fibonacci retracement level -- of its 4.1% move from the election night close to the Monday high.
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The Meme Market
Barron's (Video)
Are investors looking at stock valuations, or internet memes? Here's how to sort through the mess and invest wisely.
/jlne.ws/40Ogr8L
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| | | | 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
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Editor
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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.
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