| June 26, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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Complete Interview: Chen Liang, the co-founder of Odds.Trade
JohnLothianNews.com
Complete Interview: JLN talks with Chen Liang, co-founder of Odds.Trade, a fintech company that develops tools for retail options traders that enable them to quickly generate options strategy ideas.
Watch the video »
| | | | | | Lead Stories | | | Renewed Bullishness Expected After Bitcoin, Ether's $10B Options Expiry on Friday; Over 25% of options are set to expire "in the money," Deribit's Luuk Strijers told CoinDesk.
Omkar Godbole - CoinDesk
It's that time again when discussions about activity in the crypto derivatives take precedence. On Friday at 08:00 UTC, bitcoin (BTC) options worth $6.68 billion and ether (ETH) options worth $3.5 billion are set to expire on the leading crypto derivatives exchange Deribit. The impending expiry, which represents over 40% of the current cumulative open interest of over $23 billion, could trigger a surge in market volatility. Large quarterly expiries often lead to increased volatility, making prices more unpredictable due to higher trading volumes and the closing/rollover of positions.
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Google and CME to Build New Facility to Move Trading Into Cloud; Construction will start later this year in Aurora, Illinois; Move is next step in firmsâEUR⢠10-year alliance started in 2021
Katherine Doherty and Isis Almeida - Bloomberg
Alphabet Inc.âEURâ¢s Google will work with CME Group Inc. to build a new cloud-computing network that will enable the exchange operator to shift its futures and options trading into the cloud. The two firms will develop cloud and colocation facilities âEUR" space rented to clients for their own IT equipment âEUR" next to CMEâEURâ¢s existing data center in Aurora, Illinois, executives said Wednesday. Construction will start later this year and the transition will happen in phases, they said.
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India's options trade faces a less lucrative reset
Shritama Bose - Reuters
India is moving to make stock trading less like a game. Officials are planning more stringent margin and disclosure rules in the country's equity derivatives market, which has become the world's largest by volume of trades. Tightening the screws should help protect small-time traders and pre-empt a wider bust, at the expense of slimmer winnings for trading firms like Jane Street and a new crop of discount brokers.
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SEBI tightens F&O vigil, forms panel for risk management, investor protection in equity derivatives
Moneycontrol News
In yet another step to tighten the grip on ballooning retail Futures & Options (F&O) trading, market regulator SEBI (Securities and Exchange Board of India) has formed a working group to enhance investor protection and improve risk management in equity derivatives, a member of the group told Moneycontrol, requesting anonymity. The 15-member group is headed by former RBI (Reserve Bank of India) Executive Director G Padmanabhan. It includes representatives from the market ecosystem, such as exchanges, brokers, clearing corporations, mutual funds, a major corporate house, and academic experts in finance and risk management from the Indian Institutes of Management (IIMs).
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Short Sellers Destroyed As Volkswagen Gives Rivian a $5 Billion Boost
Markets Insider
After soaring to a record high just days after its November '21 IPO (at $78/share), the fate of EV maker Rivian had been a brutal one-way masterclass in disappointment after disappointment, with the price trading near record lows in recent months, and flirting with single digits, down 93% from the all time high of $172 hit in November 2021.
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How steepener trades burned hedge funds, and what happened next; Delays to central bank rate cuts torpedo popular trade, causing funds to pull capital âEUR" to the chagrin of sell-side desks
Rebekah Tunstead and Bernard Goyder - Risk.net
Volatility across rates instruments such as swaptions is down, further depressing trade activity.
At a townhall meeting in the first quarter of this year, CitiâEURâ¢s head of rates Deirdre Dunn shared some cautionary advice with traders on how to deal with dwindling client activity in the rates market.
Hedge funds, stinging from earlier bad bets on expected central bank rate cuts, had pulled back from the market. With many of their most active clients sitting on the sidelines, sell-side market-makers were left to twiddle their thumbs.
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Opinion: GameStopâEURâ¢s Roaring Kitty could trigger another meme-stock frenzy anytime he wants; Keith Gill, aka âEURËRoaring Kitty,âEUR⢠is more than an investor âEUR" heâEURâ¢s an influencer and content creator
Steven Schwartz - MarketWatch
Keith Gill, the trader known as âEURÅRoaring KittyâEUR who started the GameStop meme-stock craze three years ago, returned to YouTube several weeks ago to urge his followers to trust that GameStop can turn things around despite a rough earnings report. GillâEURâ¢s devotees so far havenâEURâ¢t had the same success with GameStop this time around, but that doesnâEURâ¢t mean a thing. Roaring KittyâEURâ¢s reappearance is about so much more than just one stock.
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What Does a Low VIX Mean for Stocks? Stock returns were typically best when the VIX was high
Rocky White Senior Quantitative Analyst - Schaeffers Research
The S&P 500 Index (SPX) has been in a steady uptrend for several months now. Naturally, this has led to a subdued CBOE Volatility Index (VIX). In case youâEURâ¢re not familiar, the VIX is measure of the 30-day implied volatility (IV) of SPX options. A low VIX means option traders are not expecting much market volatility over the next 30 days. This week, IâEURâ¢m looking at how stocks have usually performed based on the level of the VIX, as well as an impressive streak of the VIX below 20.
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Expect Volatility as $6B Worth of Bitcoin Options Expire Friday
Vince Condarcuri - Tip Ranks
On Friday, Bitcoin options worth $6.68 billion and Ethereum options worth $3.5 billion will expire. On Friday, Bitcoin (BTC-USD) options worth $6.68 billion and Ethereum (ETH-USD) options worth $3.5 billion will expire on leading crypto derivatives exchange Deribit, according to CoinDesk. This will make up over 40% of the current $23 billion in open interest, which could lead to a lot of market volatility as traders adjust their positions.
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| | | | | | Exchanges | | | CME Group and Google Cloud Announce New Chicago Area Private Cloud Region and Co-location Facility for CME Group's Markets
CME Group
Key milestone paves the way for CME Group to migrate to Google Cloud's industry-first specialized platform for capital markets. Reaching a significant milestone in the companies' transformational partnership, CME Group and Google Cloud today announced plans to build a new private Google Cloud region, and a co-location facility, in Aurora, Illinois. The private Google Cloud region will host Google Cloud's new, industry-first specialized platform designed to support global trading of CME Group's futures and options markets, and offer derivatives traders cloud-based, ultra-low-latency networking, and high-performance computing.
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Update: Deployable Margin Software Production Release - Equities in SPAN 2 Margin Framework - Effective June 25, 2024
CME Group
CME Clearing ("CME") has announced the multi-year rollout schedule of its SPAN 2 framework for calculating performance bond requirements for CME-cleared futures and options on futures. According to the planned Equities in SPAN 2 framework release schedule, CME has delivered an updated version of the production-candidate build of the deployable margin software, version 3.1.10, which supports Equities in the SPAN 2 framework. This version supersedes the prior production candidate release, version 3.1.9, and is now the expected production version of the program. Users are encouraged to deploy this version in their production environment on or before the mandatory production cutover date for Equities contracts. Starting on the mandatory cutover date, prior versions of the deployable margin software will no longer be supported.
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OIRN: Exploring the Hot Issues In The Options Market with Nasdaq
Options Insider Radio Interviews
On this episode Mark is joined in the Southern Studio by: Sean Feeney, Head of Options âEUR" Nasdaq. Mark and Sean discuss the hot topics in the options market right now including: Zero Day Options âEUR" are they a bane or a boon and when will we see more of them listed? Bitcoin Options âEUR" what the heck is going on there? Flex Options âEUR" why are they suddenly the hottest thing in the options market? Options Volume âEUR" why did it dip recently and can it possibly persist at these levels? and much moreâEUR¦
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| | | | | | Regulation & Enforcement | | | SEC Still Weighing Next Steps in Court Over New Hedge Fund Rules
Lydia Beyoud, Will Kubzansky and Annmarie Hordern - Bloomberg
Wall Street's top regulator is still evaluating its next steps in trying to force hedge funds and private equity firms to disclose more about their fees, according to Securities and Exchange Commission Chair Gary Gensler. Gensler said Tuesday the agency is assessing how to respond to an appeals court opinion earlier this month that blocked new SEC rules forcing firms to detail quarterly fees and more about their expenses to investors. The three-judge panel in New Orleans said the regulator had overstepped its authority in crafting the regulation.
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Gensler: FX Markets Should Consider Shorter Settlement
Shanny Basar - Traders Magazine
Currency markets worldwide currently settle two days after a trade but Gary Gensler, chair of the US Securities and Exchange Commission, said it is appropriate for regulators and market participants around the globe to start to consider the possibility of shortening this cycle. Gensler spoke via video to the conference on Accelerated Settlement in the UK in London on 20 June. On 28 May 2024 the US, Canada, Mexico, Argentina, and Jamaica shortened their settlement cycle for equities, corporate bonds, and municipal securities to one day after the transaction date (T+1) from T+2. Gensler said the move happened âEURÅsmoothly.âEUR He highlighted that fail rates did not spike following the transition to T+1, but stayed relatively flat.
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G20 set to seek more derivatives transparency - source
Reuters
The Group of 20 leading nations will ask regulators to consider extra measures to make hedge funds, derivatives and credit rating agencies more transparent, a G20 source said on Thursday.
Finance ministers and central bankers from the G20 countries meet in Busan on Friday and Saturday and are expected to ask the Financial Stability Board to consider extra measures in time for a G20 leaders summit in Toronto later this month, the source added.
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| | | | | | Technology | | | Digital Vega, FactSet Collaborate on FX Options
Digital Vega Press Release via Traders Magazine
Digital Vega, the leading FX Options e-trading platform and provider of FX Options trading solutions, announced that its service has been integrated with FactSetâEURâ¢s FX execution management system, Portware. This collaboration adds to Digital VegaâEURâ¢s distribution and client base, while enabling FactSet to extend its product coverage to include FX Options, in addition to Fixed Income, Equities, Futures, and FX.
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| | | | | | Strategy | | | How to Profit When Others Panic Over Politics; When politics and markets collide, as they will later this week during the first presidential candidate debate, investors should prepare to turn campaign cacophony into returns.
Steven M. Sears - Barron's
Politicians come and go. The financial markets rule forever.
When politics and markets collide, as they will later this week during the first presidential candidate debate, investors should prepare to turn campaign cacophony into returns.
/jlne.ws/3KYhJVs
Treasury Basis Trade Stays In Vogue - Unless Volatility Erupts
Alexandra Harris - Bloomberg
The basis trade, a strategy hedge funds use to profit from small price discrepancies between Treasury bonds and their futures contracts, is back. And its popularity may grow unless a liquidity squeeze disrupts those markets. The approach typically calls for purchasing the security that appears undervalued, while selling short the other asset in anticipation the two prices will converge. It relies on significant leverage from borrowing securities in the market for overnight repurchase agreements, which are loans collateralized by Treasuries.
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Rally
Cboe (Video)
In #Vol411, @JoeTigay gives a mid-week market update as he takes a look at $NVDA, the #VIX futures curve and more.
/jlne.ws/3L2Z1fC
| | | | | | Miscellaneous | | | CME Group and Mayor Johnson Award Star Scholarships to 25 Chicago Students Graduating to Four-Year Institutions
CME Group
CME Group, the world's leading derivatives marketplace, and Chicago Mayor Brandon Johnson have awarded 25 City Colleges of Chicago graduates with a $5,000 scholarship towards their four-year degrees. This is the eighth consecutive year CME Group is recognizing the academic achievements of Star Scholars at City Colleges of Chicago to increase higher education opportunities for students with diverse backgrounds, building on more than three decades and more than $2 million in support for Chicago students.
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