| | | | | | | April 09, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Short Sellers Mint $159 Billion Profit in 6 Days as Stocks Sink
Carmen Reinicke - Bloomberg
Short sellers, or traders who wager on share price declines, are up $159 billion in paper profits over just six trading days after an escalating trade war sent the US stock market plummeting down more than 10%. The biggest market drawdown since 2022 on President Donald Trump's pronouncement of sweeping worldwide tariffs made bets against an exchange traded fund tracking the S&P 500 Index, known as SPY, the most profitable short bet in that timeframe, according to data from S3 Partners LLC. Traders wagering that the ETF would fall have so far accumulated paper profits of more than $6.1 billion this month, per an S3 report Tuesday.
/jlne.ws/4lurnjU
Equity Vol Jumps the Most as Trump Tariffs Roil Markets
Mandy Xu - Cboe
Implied volatilities surged across asset classes last week following Trump's tariff announcements. Equity vul jumped the most, with the VIX index gaining 24 pts to a high of 45. Notably, inflation breakevens have fallen across the board post "Liberation Day" as negative growth fears have outweighed any positive price impacts from tariffs. This comes partly as oil prices have cullapsed, though oil vul remains the cheapest cross-asset vul, with WTI 1M implied vul trading just barely above its 10-year average while the VIX is trading almost 4 std dev above average.
/jlne.ws/4i8DC2o
Elevated VIX reduces equity investments to a dribble - SocGen
Jamie Chisholm - MarketWatch
The Cboe Volatility index (VIX), a measure of expected S&P 500 volatility known as Wall Street's fear gauge, is down a fraction on Wednesday, but at 49 remains very elevated relative to its long-run average of 19.5.
As the chart below from Societe General shows, a VIX at these levels is not at all conducive to investors shifting funds into equities.
/jlne.ws/3XULqO5
Canary Capital Moves Closer to Launching SUI ETF as Cboe Files for SEC Approval
Ayesha Aziz - CoinMarketCap
Canary Capital has filed paperwork with the SEC through the Cboe BZX Exchange for a spot SUI exchange-traded fund (ETF). The proposed ETF aims to track the performance of SUI, a cryptocurrency from a blockchain launched in May 2023. This layer-1 blockchain was developed by former Facebook engineers and utilizes a dual-layer consensus mechanism called Narwhal and Bullshark. Currently, SUI's market capitalization is approximately $6.7 billion, ranking it as the 21st-largest cryptocurrency, with its fully diluted market cap exceeding $22.5 billion.
/jlne.ws/3R7P0Rl
Stock Market Volatility Gauges Spike Again as S&P Swings Wildly
Bernard Goyder - Bloomberg
Stock market volatility hit new levels Tuesday, with the Cboe Volatility Index swinging more than 20 points for a second straight session.
Wall Street's "fear gauge" closed at 52.24, the highest since April 2020, as the S&P 500 index reversed an early 4.1% gain to end 1.6% lower on growing concern that Trump administration's tariffs will send the US economy into a recession.
/jlne.ws/3FYnxis
Japan's Top FX Official Cites Deep Concern After Tariffs Hit
Erica Yokoyama - Bloomberg
Japan's top currency official said he's watching foreign exchange movements with deep concern, as the rollout of US President Donald Trump's tariffs sent shock waves through global financial markets. "I'm seeing significant volatility," said the Finance Ministry's Vice Minister for International Affairs Atsushi Mimura, following emergency talks with counterparts from the Bank of Japan and the Financial Services Agency. "We'll continue to monitor market movements with a high sense of urgency," he added, referring to markets beyond currencies.
/jlne.ws/42McSPV
| | | | | | Exchanges | | | CME Group International Average Daily Volume Hits Record 8.8 Million Contracts in Q1 2025, Up 19% Year over Year
CME Group
CME Group, the world's leading derivatives marketplace, today announced that its quarterly international average daily volume (ADV) reached a record 8.8 million contracts in Q1 2025, up 19% year on year. Reflecting all trading reported outside the United States, this quarterly record was driven by growth across all asset classes, as well as record quarterly ADV in EMEA, APAC and Canada. Quarterly international records were achieved in Energy, Agricultural and Foreign Exchange products up 29%, 29% and 14% respectively.
/jlne.ws/4jpZqHN
SGX Group reports market statistics for March 2025
SGX
Singapore Exchange (SGX Group) today released its market statistics for March. Securities market turnover value rose 25% year-on-year (y-o-y) in March to S$29.7 billion, while securities daily average value (SDAV) also gained 25% y-o-y to about S$1.5 billion - the highest since May 2022. The average securities net clearing fee for the January-to-March quarter was 2.58 basis points*. Derivatives traded volume increased 14% y-o-y to 27.4 million contracts, as derivatives daily average volume (DAV) climbed 12% y-o-y to 1.3 million contracts. The average net fee per contract for equity, currency and commodity derivatives for the January-to-March quarter was S$1.31*.
/jlne.ws/423gDBc
| | | | | | Regulation & Enforcement | | | UK Regulators Eye Wall Street's Use of AI on Trading Floors
Meg Short and Philip Aldrick - Bloomberg
The Bank of England plans to closely monitor the use of artificial intelligence by banks and hedge funds over concerns that the technology could trigger a market crash or manipulation without humans even knowing about it. The central bank's Financial Policy Committee warned that the technology could destabilize markets or act in other adverse ways in a new report on AI published Wednesday. It added that AI was making such rapid headway among hedge funds and other trading firms that humans may soon not understand what the models are doing.
/jlne.ws/4jt6u6M
| | | | | | Strategy | | | Want to bet on a stock-market rebound? Consider this options strategy.; One longtime options-market analyst says a strategy known as a 'ratio risk reversal' is looking attractively priced
Joseph Adinolfi - MarketWatch
The stock-market carnage unleashed by President Trump's tariff plans has sent trading volume in the options market soaring to record highs.
As major equity indexes have moved lower, investors have favored contracts that would protect their portfolios from further losses.
/jlne.ws/4idjI6H
This Stock Market Is Wild. But There Is One Sure Thing.
Andy Serwer - Barron's
Are there any trends that seem certain in markets right now? Anything at all that seems likely to be sustained with a clear path forward over the balance of the year?
/jlne.ws/42nqkJL
Macro Funds Bullish on Aussie Dollar as Options Demand Strong
David Finnerty - Bloomberg
The Australian dollar may have plunged lower this month, but some macro hedge funds are taking a bullish view on the currency in the foreign exchange option market, according to Barclays Bank Plc.
Trading volume of Aussie dollar call options, which gain in value if the currency rises versus the greenback, outnumbered put option volume, data from the Chicago Mercantile Exchange Group's options central limit order book showed on Tuesday. Total call open interest was around double that of put options.
/jlne.ws/4cmt8eu
| | | | | | Education | | | Introduction to Options on ETFs
OIC
The first exchange-traded fund (ETF) in the U.S. was the S&P 500; Depository Receipt (SPDR), launched by the American Stock Exchange in January 1993. Designed to track the S&P 500 Index, SPDR has been highly successful. Since its introduction, especially over the past 20 years, the growth and popularity of ETFs have increased exponentially.
/jlne.ws/4cqu8yc
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| | | Jeff Bergstrom
Editor
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