| | | For more news, visit us at JohnLothianNews.com and follow us on Twitter at @JLNOptions | | | |  |  | | May 15, 2025 | | | |  | Jeff Bergstrom
Editor
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| | | Lead Stories | | | Tesla Stock Drops. What Options Activity Says About Where It's Heading Next.
Al Root - Barron's
Tesla stock was falling early Thursday.
Shares are still having an incredible week and stock options activity might have helped.
/jlne.ws/3GWwIjT
Options Pros Jettison S&P 500 Hedges as Rally Forces About-Face
Bernard Goyder - Bloomberg
For equity-options traders, greed now has firmly replaced fear as they dive into bullish positions on expectations that US stocks will extend their rebound from the depths seen last month. On US exchanges, the volume of call options relative to put contracts is hovering at the highest level since Feb. 18, a day before the S&P 500 Index clocked its last record. Call buying is a bet stocks are going up, while put buying insures against a market drop.
/jlne.ws/4dmVNkg
What's Behind the Surge in Options Income ETFs?
TradingView
Income-hungry investors have been piling into ETFs that use options to deliver juicy dividends. We've seen a surge in launches of these products recently, as providers employ innovative strategies to package derivatives within the ETF structure to meet rising investor demand.
In addition to offering high yields, these strategies generally help reduce portfolio volatility. However, investors should remember that there's no free lunch in investing. These products tend to perform best in sideways markets and often underperform during strong bull runs. That said, they can provide some downside protection when stocks fall.
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Stock Market Investors Are Greedy Again; Investors' fear and market volatility has collapsed while bulls flood the market.
Phil Rosen - Inc.
Historic fear is making way for unflinching greed in the stock market.
The S&P 500 notched its third winning day in a row on Wednesday, and the usual barometers of investor jitters have suddenly flatlined. The Cboe Volatility Index (VIX), Wall Street's so-called fear gauge, has cratered. It's closed below 19 every trading day this week, a range that's "solidly back in bull market territory," according to DataTrek Research.
/jlne.ws/3YPqbhg
Powell signals return toward inflation-first strategy; Fed reviewing strategy for supply-side shocks like Trump tariffs and oil embargoes
Greg Robb - MarketWatch
Federal Reserve Chair Jerome Powell on Thursday said the U.S. economy could be facing period of a sudden lack of key supplies, and suggested the central bank has to return to making fighting inflation its No. 1 priority.
"We may be entering a period of more frequent and potentially persistent supply shocks, a difficult challenge for the economy and for central banks," Powell said in a speech to a Fed research conference,
/jlne.ws/4jXZJuo
Wall Street's High-Frequency Traders Are Rushing Into Saudi Arabia
Anto Antony and Matthew Martin - Bloomberg
Saudi Arabia is ramping up efforts to lure high frequency trading firms - a campaign that's already brought in major players from Citadel Securities to Hudson River Trading - as it looks to bolster activity on the Middle East's largest stock market. The Saudi Tadawul Group Holding Co. is working with some of Wall Street's fastest and most secretive HFT firms to incorporate their feedback as it revamps its derivatives market framework, according to people familiar with the matter. The operator of the kingdom's stock exchange is also expanding its international roadshows - widening outreach beyond the US and Europe to Asian markets such as Japan and India, the people said, requesting anonymity to discuss private information.
/jlne.ws/4mnZESq
Dollar Weakness Fuels Unusual Surge in Currency Volatility
Vassilis Karamanis - Bloomberg
The dollar's descent is elevating the price of hedging currency trades around the world, breaking up a long-standing market conviction that costs tend to come down when the greenback weakens.
The correlation between the dollar and a widely-watched gauge of volatility in Group-of-10 currencies fell to the lowest level in seven years this week. For most of the past 15 years that correlation was positive.
/jlne.ws/45beaXa
| | | | Exchanges | | | Hedge Funds Drop Lawsuits Against LME Over Nickel Crisis
Jack Farchy and Jeremy Hodges - Bloomberg
A group of hedge funds that sued the London Metal Exchange over the 2022 nickel crisis have dropped their legal action after similar arguments made in separate proceedings were rejected by UK courts. The move means the exchange, which sparked fury by canceling $12 billion in trades after nickel prices surged due to a short squeeze, has faced down some $600 million in legal claims from some of the world's highest profile investors.
/jlne.ws/3ZlkvLY
Strong start of the year with growth of non-volume-related revenue, record FICC trading volumes and exceptional market volatility.
Euronext
Euronext, the leading European capital market infrastructure, today publishes its results for the first quarter 2025 using the new, simplified reporting framework.
/jlne.ws/43viHT7
HKEX Welcomes Further Swap Connect Enhancements
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) welcomes the joint announcement today (Thursday) from the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA) and the People's Bank of China to further enhance Swap Connect, enabling international investors to better manage the interest rates risk of their RMB assets.
/jlne.ws/4dh2Meq
Eurex leads the way in seamless EMIR 3.0 AAR transition, empowering clients for future growth
Jens Quiram, Global Head of Sales and Marketing - Eurex
With less than two months to go before the EMIR 3.0 active account requirement (AAR) comes into force, the clearing industry is in a good place to hit the June 24 start date in a state of compliance. From then on, EU market participants that fall under the clearing obligation must have an "active" account for OTC interest rate derivatives (IRD) in euro and zloty, as well as short-term interest rate (STIR) derivatives in euro with a central counterparty (CCP) based in the EU. This will mark a significant moment in the evolution of European clearing markets, with increased systemic safeguards, as well as a framework for greater transparency and innovation to thrive.
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| | | | Regulation & Enforcement | | | US exchanges fight SEC fee caps in court; Cboe and Nasdaq expected to defend rebates that critics say impede market efficiency
Luke Clancy - Risk.net
US rules that aim to boost on-exchange equities trading by reducing the fees exchanges charge face a test in court today, May 15. Existing rules cap fees at 30 cents per 100 shares (30 mils) on so-called protected quotations. Protected quotations are the best bid or offer in a stock displayed by an automated trading centre.
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| | | | Technology | | | Former Sterling Trading Tech President Jim Nevotti has announced the launch of Connect Trade, a startup offering a one-to-many API that enables investment platforms to connect with multiple retail brokers for trading and data access. The platform addresses the challenges of fragmented and outdated broker APIs by providing real-time and historical account data, seamless user authentication, and support for equities, multi-leg options, and futures trading, all within a single integration. Connect Trade also features AI integration support and client dashboard analytics, with integrations currently being finalized ahead of launch. ~JJL
| | | | Miscellaneous | | | Reducing market hours makes sense in practice, but feasibility remains a question; As the US continues its path towards a seemingly 24/7 trading set up, panellists at TradeTech Europe debated the potential for a European shift in the opposite direction.
Claudia Preece - The Trade
The time is ripe for a change in trading hours agreed expert panellists at the TradeTech Europe conference on Wednesday, but whether this should be in the direction of longer or shorter days was up for debate. When it comes to the argument in favour of expanding trading hours, the answer was summed up in very succinctly in just two words by one panellist: retail participation.
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