| February 14, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
CFTC Testifies for more Crypto Authority; Cboe Launches First New Canadian Offering; Regulators Warns against Online Dating Scams
JohnLothianNews.com
Alex Perry's Optionstopia takes a look at this week's options news highlights: Ethereum's Daily Options Volume Matches Bitcoin; Crypto Exchanges Airing Super Bowl Commercials; Cboe's MATCHNow Technology Migration
John talks about "Dating or Defrauding" & Super Bowl Crypto in John's Take
"European-Style Options" is the Term of the Week with tastytrade's Jermal Chandler.
Watch the video »
| | | | | | Lead Stories | | | SOFR Options Market Catches Fire With $100 Million Wager
Edward Bolingbroke - Bloomberg
The derivatives market that aims to supplant U.S.-dollar-Libor-settled eurodollar futures and options has taken another stride forward in the past week with the emergence of a sizable volatility trade.
The position appeared in June 2023 options linked to 3-month futures referencing the Secured Overnight Financing Rate. Over the course of Friday and Monday, almost $100 million has been spent on a long volatility structure called a straddle, involving the purchase of calls and puts with the same strike. The position grew to 40,000 contracts Monday, after open-interest data revealed Friday's activity as setting new risk.
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Christine Lagarde Says ECB Will Act at 'Right Time' With Gradual Policy Approach
Alexander Weber - Bloomberg
European Central Bank President Christine Lagarde repeated that officials won't rush to remove stimulus in the euro region as she sought to highlight the limits of their powers at a time of volatile prices.
/jlne.ws/34Q8oxb
Dollar strengthens on Bullard rate comments, Ukraine concerns
Caroline Valetkevitch - Reuters
The U.S. dollar index reached a two-week high on Monday, with investors anxious over tensions in Ukraine and as St. Louis Federal Reserve president James Bullard reiterated calls for a faster pace of U.S. Federal Reserve interest rate hikes.
Bullard on Monday also said that four strong inflation reports in a row warranted action.
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Column: Hedge funds take oil profits as inflation fears intensify
John Kemp - Reuters
A bout of profit-taking ensued last week as seven-year highs in crude oil and middle distillates prices intensified concerns about inflation and the possibility of countermeasures from central banks.
Rapidly escalating prices for oil and other commodities have become a central problem for macroeconomic policymakers in advanced economies. Unless inflation in oil and other commodities starts to decelerate on its own, the U.S. Federal Reserve and other central banks will be forced to raise interest rates to slow growth and bring prices back under control.
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Dow falls 300 points as investors eye Russia-Ukraine tensions, Fed's next move
Maggie Fitzgerald and Tanaya Macheel - CNBC
The major averages retreated on Monday as investors evaluated concerns about the Federal Reserve's plan for interest rate hikes and tensions between Russia and Ukraine.
The S&P 500 fell 0.6%, while the technology-heavy Nasdaq Composite fell 0.2%. The Dow Jones Industrial Average fell about 270 points, dragged down by losses in Cisco and Chevron.
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| | | | | | Exchanges | | | SOFR Futures and Options Set Multiple Records on February 10 as SOFR-Based Liquidity Continues to Grow
CME Group
Record 2.07 million SOFR futures contracts traded; Record SOFR futures open interest of 3.2 million contracts; Record 130,200 SOFR options contracts traded; Record SOFR options open interest of 656,977 contracts
CME Group, the world's leading derivatives marketplace, today announced that SOFR futures surpassed 2 million contracts for the first time, reaching a new, single-day trading volume record of 2,069,531 contracts and setting a new open interest (OI) record of 3,236,499 contracts on February 10. SOFR options also reached a record 130,200 contracts traded yesterday and set a new OI record of 656,977 contracts.
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MSCI Index derivatives: Introduction of additional products, extension of terms and a new incentive component
Eurex
The Management Board of Eurex Deutschland took the following decisions:
Introduction of Futures on four MSCI Indices (MSCI Germany, MSCI Israel, MSCI Europe ESG Screened, MSCI EMU ESG Screened) and Options on two MSCI Indices (MSCI China, MSCI Saudi Arabia), effective 21 February 2022; Extension of the term of three MSCI Futures (MSCI EM, EAFE, World), effective 21 February 2022
Inclusion of the new products into the existing Liquidity Provider Schemes (as of 1 March 2022);
Introduction of a new incentive component ("stipends") into the existing Liquidity provider scheme (as of 1 March 2022)
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SGX reports market statistics for January 2022
SGX
Strong start to the year as derivatives volume rises to four-month high; SGX welcomes inaugural batch of SPAC listings to Mainboard;
Singapore Exchange (SGX) today released its market statistics for January 2022. Market participants weighed global growth prospects against an array of concerns including elevated inflation and continuing challenges to supply chains, bolstering risk-management activity across asset classes.
Derivatives traded volume on SGX rose 3% month-on-month (m-o-m) in January to about 20 million contracts, the highest since September 2021. Equity index futures volume climbed 7% m-o-m to 15.1 million contracts, with steady activity in SGX FTSE China A50 Index Futures amid signs that China's economic expansion could slow in the near term. SGX Nifty 50 Index Futures, SGX FTSE Taiwan Index Futures as well as SGX MSCI Singapore Index Futures were among m-o-m volume gainers.
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| | | | | | Technology | | | OCC Advances Technology Overhaul
Anna Lyudvig - Traders Magazine
OCC, the world's largest equity derivatives clearing organization, is working towards a complete replacement of its technology, according to John P. Davidson, Chief Executive Officer. Through investments in hardware and software, OCC's clearing system has handled huge growth in volume: "In January, we cleared 63 million contracts in a single day. Five years ago, that was a good week," Davidson said.
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| | | | | | Strategy | | | Preparing for More Turbulence
Barrons (VIDEO)
Amid ongoing volatility stemming from geopolitical tensions, inflation and the Fed's next move, Yie-Hsin Hung, CEO of New York Life Investment Management, presents her firm's global perspective. Plus, Helane Backer, senior aviation analyst with Cowen, discusses which U.S. airline belongs in your portfolio.
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Bank of America shares the 9 stock market industries that give investors the best opportunities at this volatile time â and why the undervalued energy sector could rise up to 71%
James Faris - Business Insider
Stocks are off to a choppy start in 2022, to say the least. The S&P 500 is down 7% and the tech-focused Nasdaq is in correction territory as inflation concerns begin to turn into panic.
Investors are unsure whether the bottom is in or if there's more pain ahead. Bank of America's answer? There's more seesawing yet to come, so choose investment opportunities carefully.
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The Stock Market Has Been Sinking. Should You Buy the Dip?
Ben Levisohn - Barron's
The stock market looks set to open mixed Monday morning, and that might be tempting investors conditioned to buy the dips to tiptoe back into stocks. A word of advice: Caution is warranted.
It's not just because the market is following up last week's weakness with, well, not much of anything. S&P 500 futures have ticked up 0.1%, while Dow Jones Industrial Average futures have edged up 0.1%, and Nasdaq Composite futures have advanced 0.1%. But without a big rally, the market will remain beneath the 200-day moving average, and that could be a problem.
/jlne.ws/3H28bEJ
| | | | | | Miscellaneous | | | There's No Perfect Way to Inflation-Proof Your Investments
Anne Tergesen - WSJ
With inflation at a four-decade high, many investors are trying to figure out how to protect their retirement nest eggs. But figuring out exactly how to inflation-proof your portfolio isn't an easy task.
The need to stave off the threat of inflation stems from the fact that rising prices generally reduce the purchasing power of assets. For people on a fixed income in retirement, inflation means their retirement dollars might not go as far.
/jlne.ws/3GInbaw
Meme-Stock Frenzy Gets a Fresh Look That Questions SEC Narrative
Matt Robinson - Bloomberg
Meme-stock mania might have been a case of traders banding together to take down hedge funds after all.
That's the contention of new research that challenges the Securities and Exchange Commission's view that a so-called short squeeze played little part in pushing GameStop Corp. into the stratosphere in January 2021. The regulator failed to examine relevant securities-lending data and didn't study a long enough stretch of transactions, a half a dozen academics from Columbia University, the University of Notre Dame and elsewhere asserted in a paper sent in recent weeks to SEC Chair Gary Gensler.
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