| March 18, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Stock Traders Endure a $3.5 Trillion Triple Witching Event
Lu Wang - Bloomberg
Wall Street traders are bracing for fresh equity-market fireworks Friday after another week of global turbulence.
In a quarterly event known as triple witching, roughly $3.5 trillion of single-stock and index-level options are set to expire, according to Goldman Sachs Group Inc. At the same time, more near-the-money options are maturing than at any time since 2019 -- suggesting a bevy of investors will actively trade around those positions.
/jlne.ws/3uaEUTC
The World's Biggest Commodities Markets Are Starting to Seize Up
Mark Burton and Alex Longley - Bloomberg
It's getting harder to deal in some of the world's most important commodities as everything from geopolitical turmoil to exchange snafus prompt traders to rush for the exits, rapidly draining liquidity.
Prices of materials like crude, gas, wheat and metals have become alarmingly erratic as a gulf emerges between buyers and sellers who are facing big financing strains. Markets have been roiled on fears about Russia's invasion of Ukraine constraining commodities flows, though in many cases rallies were quickly followed by a drop in prices.
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Commodities offer traders a wild ride, but some are drawn to volatility like flies 'to a light bulb'
Myra P. Saefong - MarketWatch
Traders have had a lot to deal with since Russia's invasion of Ukraine, as sanctions ramp up and threaten the global flow of commodities, including wheat and oil, raising the risk of shortages and wreaking havoc on day-to-day trades that have seen some explosive moves.
"We're in a very 'headline driven' market right now that makes managing risk of extreme importance," John Caruso, senior asset manager at RJO Futures told MarketWatch. There was a lot of "hot money" chasing the recent rallies in energies and metals on the Russia/Ukraine and inflation headlines, and "I'm sure they're not too pleased with those decisions today."
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Goldman (GS) Says Stock Market Now Too Relaxed on Ukraine War Risk
Nikos Chrysoloras - Bloomberg
Global markets may be getting too relaxed about downside risks related to war in Ukraine, strategists at Goldman Sachs Group Inc. said, warning that current prices no longer reflect more negative scenarios.
/jlne.ws/3igHcv5
Market Too Dull? New Fund Will Target Most-Volatile Large Caps
Emily Graffeo - Bloomberg
For any investors looking for maximum drama in the U.S. stock market, a new exchange-traded fund is looking to target only the biggest and most-volatile companies.
Volatility Shares filed an application for an ETF late Wednesday that would track the S&P 500 Volatility - Highest Quintile Index, a gauge of the 100 most-volatile stocks in the U.S. equity benchmark. The index is down 1.5% year to date, outperforming the S&P 500's 8.1% decline.
/jlne.ws/3th3mUe
Oil Prices Are Rising Again. The Volatility Just Keeps Coming.
Callum Keown - Barron's
Oil prices stayed true to their recent volatility Friday rising in early trading before slipping back but remaining above $103 a barrel as investors grappled with mixed messages over peace talks between Russia and Ukraine.
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Nickel market tumult continues: What investors need to know
Myra P. Saefong - MarketWatch
Like many other commodities, nickel became a victim of the supply concerns brought on by the Russia-Ukraine war, as a price spike on the London Metal Exchange earlier this month led to the suspension of trading in the metal for more than a week.
The LME suspended nickel trading on March 8 after prices for the metal more than doubled in a short span of time. While the exchange officially resumed nickel trading on Wednesday, it hasn't yet been successful in bringing order to the market, with prices continuing to hit daily expanded price-limit declines for three days in a row.
/jlne.ws/3igpibK
Transitions away from LIBOR are showing progress, finds Bloomberg
Wesley Bray - Bloomberg
According to a new survey from Bloomberg, financial services firms are on track for a successful transition following the cessation or non-representation designation of Sterling, Swiss and Japanese Yen LIBORs at the end of 2021.
The survey was conducted last month and polled 130 executives from financial services firms and corporations worldwide.
/jlne.ws/361jWPg
| | | | | | Exchanges | | | Eurex starts trading Weekly KOSPI 200 Options on 28 March
Eurex
Starting 28 March, Eurex and Korea Exchange will add Weekly Options on the Korean benchmark index KOSPI 200 to their link. Eurex will then be the only exchange offering trading in Weekly KOSPI Options outside of Korean trading hours.
The ability to trade this contract outside of Korean trading hours gives investors greater flexibility and precision to customize short-term risk exposures in the Korean market. Average daily turnover at KRX in weekly expiries on the KOSPI 200 Options stood at over 1 million contracts in February. This shows the high demand for weekly expiries.
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LME hikes daily nickel price limit to 15% from Monday
Reuters
The London Metal Exchange (LME) will raise its daily price limit for nickel trading to 15% from 12% effective Monday, it said a notice.
/jlne.ws/3KSSiCL
HKEX Fact Book 2021
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) has published the latest annual fact book on the HKEX website. HKEX Fact Book 2021 presents a review of the securities, derivatives and commodity markets in 2021, as well as clearing and settlement information. It includes the market indices' movements, trading statistics and analysis, corporate actions of listed companies, fund-raising figures and historical statistics.
/bit.ly/3webXsJ
| | | | | | Regulation & Enforcement | | | Hedge Funds Balk at 'Really Problematic' Rules Steering ESG
Lisa Pham - Bloomberg
Hedge funds keen to get a piece of the $40 trillion ESG market are voicing growing frustration over what they say is an absence of clear regulations for one of their most popular investment strategies.
Firms including Man Group Plc and BlueBay Asset Management LLP say disclosure rules for environmental, social and governance investing still don't explain how hedge funds should account for short selling. As a result, many are now turning to their lawyers to help them avoid the kinds of legal risks that might arise if they misstate their ESG positions.
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| | | | | | Strategy | | | How to Make Oil Stock Volatility Work for You
Jacob Sonenshine - Barron's
With oil prices rising and falling dramatically, it can be hard to get a handle on oil stocks. One strategy: Buy only the most and least volatile ones.
That might seem like a strange way to bet on a very volatile energy market. Oil prices surged 45%, to $130 a barrel, on March 6 from $89 on Feb. 10, the day before U.S. National Security Advisor Jake Sullivan said Russia would attack Ukraineâbut they tumbled 27%, to $95, before jumping back to $103. That drop sent oil stocks for a spin, too, with the Energy Select Sector SPDR exchange-traded fund (ticker: XLE) falling as much as 7% since then before rebounding. Oil stocks have a lot to gain if crude prices can bounce back, and a lot to lose if they keep dropping.
/jlne.ws/3u5UEYd
Worried About Volatility? Three ETFs to Look At
Ben Hernandez - ETF Trends
If investors are worried about volatility these days, it's because they should be. The CBOE Volatility Index or VIX for short is up over 50% this year, giving investors a heavy dose of market fluctuations.
Inflation fears capped of 2022 as threats of slowing growth put markets in a daze and lead to sell-offs, particularly in the technology sector. Then Russia's invasion of Ukraine added to those worries as threats of nuclear warfare created more market uncertainty.
/jlne.ws/3CSMgz0
| | | | | | Miscellaneous | | | The Great Nickel Pickle
Marc Filippino, Katie Martin and Guy Chazan - Financial Times
The London Metal Exchange suspends electronic trading in nickel on Wednesday after reopening for business following a week-long shutdown
/jlne.ws/3ImlGjc
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| | | Jeff Bergstrom
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