| October 06, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Stock Market Analysis: Massive Options Trade Fueled 2% Surge in S&P 500
Matthew Fox - Markets Insider
Wednesday's trading session saw a sharp reversal that led to the S&P 500 briefly erasing a near-2% loss, and a massive options trade could have been behind the surge, according to a Wells Fargo note reported by Bloomberg.
In a Wednesday note from Wells Fargo's head of equity strategy, Chris Harvey detailed a bullish options trade worth $31 million that hit the tape right around the same time stocks hit their intraday low and started to move higher.
/jlne.ws/3EnHTPf
**** JB: Also read Bloomberg's Wells Fargo Says One Big Option Trade Fueled S&P 500 Midday Jump.
Short-Dated Options Bets on Twitter Surge Amid Musk Buyout Proposal
Eric Wallerstein - WSJ
As the Elon Musk-Twitter saga continues, options traders are cashing out--and putting on even more wagers.
Trading in options tied to shares of Twitter Inc. surged on Wednesday to the highest levels since April 25, when the social media giant initially accepted Mr. Musk's proposal to purchase the company for $54.20 per share.
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Looming Global Recession Will Be Worse Than Expected, IMF Says
Ben Winck - Business Insider
The world is hurtling toward an economic slump, and the decline is set to do more damage than previously anticipated, Kristalina Georgieva, managing director at the International Monetary Fund, said Thursday.
The economy is in the midst of a "fundamental shift," and there will be growing pains, Georgieva said in a speech at Georgetown University. High inflation has eroded household finances the world over, and central banks around the globe are rushing to raise interest rates and cool the price surge. That widespread tightening threatens to slow global growth to a standstill.
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Treasuries Liquidity Problem Exposes Fed to 'Biggest Nightmare'; JPMorgan measure of Treasury-market depth continue to plunge; Bloomberg's gauge of how far yields are from fair value rising
Liz McCormick - Bloomberg
The latest bout of global financial volatility has heightened concerns about regulators' continuing failure to resolve liquidity problems with US Treasuries -- the debt that serves as a benchmark for the world. It's getting harder and harder to buy and sell Treasuries in large quantities without those trades moving the market. Market depth, as the measure is known, last Thursday hit the worst level since the throes of the Covid-19 crisis in the spring of 2020, when the Federal Reserve was forced into massive intervention.
/jlne.ws/3CasZtb
Here's What Stocks Need to Turn Bear-Market Rally Into Real One
Jan-Patrick Barnert - Bloomberg
The word on Wall Street is that the recent bounce in equities is just another bear-market rally. For the gains to last longer, some key pieces need to fall into place.
While the scale of the rebound from last week's lows was impressive, the consensus among strategists and fund managers is that it's unlikely to last. From important technical levels to macroeconomic scenarios and market volatility, here is a list of factors that could push equities higher for longer:
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Wall Street Warns Wishful Thinking on Fed Won't End Bear Market
Denitsa Tsekova - Bloomberg
Dip buyers wagering that the era of central-bank hawkishness has peaked got a reminder Wednesday that they are playing a dangerous game.
The S&P 500 sank as much as 1.8% after the biggest two-day surge since April 2020 drew in traders tanked up on newly dovish monetary bets. While the index clawed back most of the losses to close 0.2% lower, would-be bulls were put on notice as Federal Reserve Bank of San Francisco President Mary Daly disabused notions that a policy pivot is in the offing.
/jlne.ws/3EnYQck
Treasuries Liquidity Problem Exposes Fed to 'Biggest Nightmare'
Liz McCormick - Bloomberg
The latest bout of global financial volatility has heightened concerns about regulators' continuing failure to resolve liquidity problems with US Treasuries -- the debt that serves as a benchmark for the world.
It's getting harder and harder to buy and sell Treasuries in large quantities without those trades moving the market. Market depth, as the measure is known, last Thursday hit the worst level since the throes of the Covid-19 crisis in the spring of 2020, when the Federal Reserve was forced into massive intervention.
/jlne.ws/3ykXFXi
Four flashpoints that could threaten financial stability
Gillian Tett - Financial Times
Dallas is almost 5,000 miles from London. But when the UK gilt markets imploded last week â forcing the Bank of England to make a GBP65bn intervention to support pension funds â the drama left Richard Fisher, former chair of the Dallas Federal Reserve, wincing.
Fisher has warned for years that a decade of ultra loose monetary policy would create pockets of future financial instability. So he sees the British gilts drama (which occurred because the pension funds mishandled highly leveraged bets) not as an isolated event â but as the sign of a trend.
/jlne.ws/3SH4ZER
Banks dial up risk-taking in OTC derivatives trades by using many of the same non-bank counterparties, a study says
Steve Gelsi - MarketWatch
A working paper on counterparty choice by major banks in the $12.4 trillion over-the-counter derivatives market offers evidence of systemic risk propagation in bank networks through non-bank counterparties in "opaque" markets.
The report, Counterparty Choice, Interconnectedness, and Bank
Risk-Taking, by the U.S.'s Office of Financial Regulation marks the first study to provide empirical evidence in the OTC derivative markets that "suggests the existence of endogenous risk-taking behavior by banks related to network formation," said authors Andrew Ellul and Dasol Kim of the Office of Financial Regulation.
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| | | | | | Exchanges | | | Cboe Global Markets Reports Trading Volume for September 2022
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today reported September monthly trading volume statistics across its global business lines and provided guidance for selected revenue per contract/net revenue capture metrics for the third quarter of 2022.
The data sheet "Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report" contains an overview of certain September trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
/jlne.ws/3CAuWAm
Cboe Takes Step Into DeFi by Posting Free Market Data on Pyth
Katherine Doherty and Yueqi Yang - Bloomberg
Cboe Global Markets Inc. is making some real-time market data freely available over blockchain, as the exchange operator makes its entry into decentralized finance. The Chicago-based firm is joining the Pyth Network, the Jump Trading Group-backed decentralized publisher of crypto and other market data, as a contributor. It will provide data of 10 equities starting in the fourth quarter.
/jlne.ws/3EqnEAy
Crypto Derivatives Exchange PowerTrade Launches 'RFQs' for Institutional Options Trading
Lyllah Ledesma - CoinDesk
PowerTrade, a crypto exchange focused on derivatives, is rolling out a request-for-quote (RFQ) model for the options market, which it says will cater to institutional investors by mirroring a widely used practice in traditional finance. The exchange, which is available as a mobile and web-based application, is the latest to launch an RFQ model. Institutional players tend to prefer to trade options as multi-leg RFQs as they allow investors to buy and sell assets in bulk. Generally speaking, an RFQ is when an investor asks brokers or market makers to bid on a trade.
/jlne.ws/3RHLefg
Sucden Financial Commences STIR Market Making
Sucden Financial
Sucden Financial, the multi-asset execution, clearing and liquidity provider, has announced it is now a market maker for ICE Futures Europe's short-term interest rate (STIR) options. The new service is managed by Sucden Financial's interest rate options team, which is now fully integrated following the acquisition of the trading, IT, and IP assets of Atlantic Trading London Limited.
/jlne.ws/3fGN4zD
CME Group and CF Benchmarks to Launch Three New Cryptocurrency Reference Rates and Real-Time Indices on October 31
CME Group
CME Group, the world's leading derivatives marketplace, and CF Benchmarks, the leading provider of cryptocurrency benchmark indices, today announced plans to launch three new cryptocurrency reference rates and real-time indices, which will be calculated and published daily by CF Benchmarks, beginning October 31.
/jlne.ws/3C6AReY
Miami International Holdings and The Bermuda Stock Exchange Announce Participation in World Investor Week Ring the Bell for Financial Literacy 2022 Ceremony
MIAX
Miami International Holdings, Inc. (MIH), owner of Miami International Securities Exchange, LLC (MIAX ), MIAX PEARL, LLC (MIAX Pearl ), MIAX Emerald, LLC (MIAX Emerald ), Minneapolis Grain Exchange, LLC (MGEXâ¢), and The Bermuda Stock Exchange (BSXâ¢), today announced their participation in the "Ring the Bell for Financial Literacy 2022" ceremony taking place on October 6, 2022. MIAX will ring the bell at its Princeton, N.J. office, while BSX will ring the bell at its new headquarters facility at Exchange House, in Hamilton, Bermuda.
/jlne.ws/2K3gU18
| | | | | | Regulation & Enforcement | | | 'Defund the SEC' Becomes a Rallying Cry on Trump's Social Media Site
Matthew Goldstein - NY Times
The Securities and Exchange Commission is corrupt. The S.E.C. is politically motivated. Defund the S.E.C.
Some shareholders of Digital World Acquisition Corp. have had it with the commission, the nation's top securities cop, and they are airing their views loudly. Last October, the blank check company agreed to merge with Trump Media and Technology Group, the parent company of Truth Social, the Twitter-like social media platform backed by former President Donald J. Trump. Within weeks, the S.E.C. announced an investigation. One year later, the deal still hasn't closed.
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| | | | | | Technology | | | Hedge Fund Two Sigma to Provide Data to Blockchain Information Network Chainlink
Brandy Betz - CoinDesk
Two Sigma Securities, a quantitative hedge fund with about $60 billion in assets under management, will provide data to popular blockchain information network Chainlink, according to a press release provided to CoinDesk. Chainlink offers price feeds and other data through its oracle network, which can help Web3 developers get projects off the ground faster. Two Sigma's market data includes swaps, options and other derivative-related information. The addition comes a week after financial services firm Galaxy Digital joined Chainlink to offer crypto pricing data to blockchains.
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| | | | | | Moves | | | CME Group Appoints New Global Heads for Equity Index and Cryptocurrency Businesses
CME Group
CME Group, the world's leading derivatives marketplace, today announced the appointment of two new global heads for its Equity Index and Cryptocurrency businesses to continue driving product innovation and supporting long-term growth. Paul Woolman, Global Head of Equity Index Products, will oversee the company's Equity Index product portfolio, while Giovanni Vicioso, Global Head of Cryptocurrency Products, will assume responsibility for the company's Cryptocurrency products. Woolman and Vicioso will report to Ti McCourt, who previously led both business lines and was recently named to the CME Group management team as Global Head of Equity and FX Products.
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| | | | | | Strategy | | | Opinion: There are early signs that the bear market is going into hibernation
Lawrence G. McMillan - MarketWatch
The stock market had two strong rally days this week.
That was mostly because of the massive oversold condition that existed, and it was aided by news from Europe that central banks were easing off on the increase in interest rates. There is some hope that could be the case in the U.S. as well, although the Federal Reserve has given no signs of that being the case.
/jlne.ws/3RGqcxE
| | | | | | Miscellaneous | | | Anti-Jim Cramer ETF Will Bet Against Stocks Endorsed by CNBC Mad Money Host
Claire Ballentine - Bloomberg
An easier way to bet against finance personality Jim Cramer is in the works.
Tuttle Capital Management â which previously launched an exchange-traded fund betting against Cathie Wood's stock picks â plans to debut the Inverse Cramer ETF with the ticker SJIM, according to a filing with the Securities and Exchange Commission on Wednesday. If approved, the fund would provide investment results that are approximately the opposite of Cramer's investment recommendations.
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