| | | | | | | February 20, 2025 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Traders Piling Into VIX Call Hedges Raise Pressure on Dealers; Call volume surpassed 1 million options on six days this year; Nomura's McElligott says dealers 'extremely short VIX gamma'
Jan-Patrick Barnert - Bloomberg
Hedging stock-market risk by buying VIX calls has become such a popular trade that it could turn into a destabilizing force, some strategists warn. More than 1 million call options on the Cboe Volatility Index changed hands on Tuesday, the sixth time this year that volume was this high. The most traded were contracts with strikes of 24 and 25 points expiring in March - after the next Federal Reserve rate decision and through the end of the bill that averted a US government shutdown in December.
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Innovations expected to turbo-charge crypto ETF industry; Participants say favourable regulatory environment could lead to enthusiasm for diversified indices of digital tokens
Steve Johnson - Financial Times
By most measures the launch of bitcoin exchange traded funds in the US has been a rip-roaring success, but industry participants say coming innovations will turbo-charge the crypto ETF industry further still. Just over a year on from their debut, US-listed bitcoin ETFs already hold $120bn of assets. The largest, the $57bn iShares Bitcoin Trust (IBIT), was the world's fastest ETF to get to $10bn, $25bn and $50bn in AUM, has already surpassed iShares' Gold Trust and is closing in on the $80bn SPDR Gold Shares (GLD) as the planet's largest commodity exchange traded product.
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Trump's Policy Deluge Is Causing Paralysis in the Oil Market
Alex Longley and Yongchang Chin - Bloomberg
The oil market is becoming increasingly numb to the array of changes that Donald Trump is trying to make now that he's US President again. Trump spent his first weeks in office railing against OPEC, seeking an end to the war in Ukraine, and threatening tariffs against some of the main crude suppliers to the US. All those things could have major consequences for supply and demand in the oil market. But rather than causing price swings, the futures market is flat-lining. A gauge of implied volatility for benchmark Brent futures - a measure of how far traders expect oil prices to swing - fell to its lowest level since July this week. "The oil market is showing signs of disorientation in the face of the sheer volume of new policy stances," Standard Chartered analysts including Emily Ashford wrote this week. "Faced with so much information and the realization that a single social media post could move the market significantly in either direction at any time, many traders have responded by reducing their risk exposure."
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| | | | | | Exchanges | | | Cboe's 'Follow the Sun' Model Will Help 24Ã5 US Equities Trading
Shanny Basar - MarketsMedia
Cboe Global Markets plans to offer 24Ã5 U.S. equities trading, subject to regulatory review and industry developments, and believes it will benefit from its experience of operating derivatives markets over this timeframe. Cboe currently supports extended trading hours for U.S. equities on one of its four US equities exchanges, EDGX. Early order acceptance begins at 2:30am ET, with trading starting at 4:00am ET and closing at 8:00pm ET, Monday through Friday. In February this year, Cboe announced plans to offer trading for 24 hours from Monday through Friday on EDGX to meet demand from overseas investors for US equities, particularly retail investors in Asia Pacific, who want to trade during their day.
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OCC Welcomes J.P. Morgan Executive Michael Kurd to Board of Directors
OCC
OCC, the world's largest equity derivatives clearing organization, today announced the appointment of Michael Kurd, Managing Director, Head of Americas Prime Financial Services at J.P. Morgan, as a Member Director to its Board of Directors. Kurd brings with him more than 20 years of experience, primarily in equity derivatives trading.
"We're pleased to welcome Michael to our board as a Member Director," said Craig Donohue, OCC Chairman. "His familiarity with our industry will serve as a valuable addition to our leadership bench. Together, our Board's collective experience and guidance support our goals of driving operational excellence and innovation, helping OCC ensure confidence in the global financial markets."
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Cboe Canada Welcomes Seven New Yield Shares ETFs by Purpose Investments
BusinessWire
Cboe Canada Inc. ("Cboe Canada") is pleased to announce that Purpose Investments has launched seven new Yield Shares ETFs ("Purpose Yield Shares ETFs"), expanding their suite of single stock, yield-focused funds. The ETFs provide exposure to some of the largest U.S. companies along with the potential for enhanced monthly yield and are now listed on Cboe Canada under the following names and symbols:
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Nodal Exchange to Expand Headquarters in Fairfax County
Nodal Exchange
Earlier today, Governor Glenn Youngkin announced that Nodal Exchange, a Fairfax County-based derivatives exchange providing price, credit, and liquidity risk management solutions to participants in the North American commodities markets, will increase capacity at its headquarters located at 1921 Gallows Road in Tysons. The expansion will create 33 new jobs. "Fairfax County is an ideal location for attracting and retaining an outstanding professional team necessary for operating Nodal Exchange and Nodal Clear, and we are thrilled to be able to continue to grow and further expand here. It is a wonderful location with a highly educated and diverse workforce," said Paul Cusenza, Chairman and CEO of Nodal Exchange and Nodal Clear. "It is also centrally located for our trading and clearing community and in close proximity to our regulators in Washington, D.C."
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Product Modification Summary: Amendments to the Listing Schedule of the Block Cheese Futures and Options on Block Cheese Futures Contract - Effective February 19, 2025
CME Group
Amendments to the Listing Schedule of the Block Cheese Futures and Options on Block Cheese Futures Contract.
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| | | | | | Regulation & Enforcement | | | SEC Begins Review of Two XRP ETF Applications as Institutional Interest in Crypto Grows
Ayesha Aziz - CoinMarketCap
The U.S. Securities and Exchange Commission (SEC) has acknowledged filings from Cboe BZX Exchange to list spot XRP exchange-traded funds (ETFs) from asset managers 21Shares and Bitwise. The SEC accepted 21Shares' application on Feb. 14, followed by Bitwise's filing on Feb. 18. This marks the beginning of the agency's formal review process, which allows 21 days for public comments on the proposals.
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MEMX Files for XRP ETF as SEC Reviews Multiple Crypto Fund Applications
Ayesha Aziz - CoinMarketCap
MEMX has filed with the U.S. Securities and Exchange Commission (SEC) to list an XRP exchange-traded fund (ETF), classifying it as a commodity-based trust. This puts it in the same category as Bitcoin and Ethereum ETFs, which have already been approved. The filing on Feb. 17 is part of a growing push for an XRP ETF despite the cryptocurrency's legal history with the SEC. The agency sued Ripple in 2020, claiming XRP was an unregistered security. A U.S. judge later ruled in August 2023 that XRP is not a security, though it could be considered one under certain conditions.
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New SEC administration withdraws dealer rule appeal; Move comes a year after the introduction of the policy which saw significant backlash from the industry upon unveiling.
Claudia Preece - The Trade
The US Securities and Exchange Commission (SEC) has withdrawn its appeal to reverse the decision by a US court which thwarted its dealer rule, a year on from when the policy was first unveiled. The dealer rule, introduced in February 2024, required certain hedge funds, among other market participants, to register if they met one of two qualitative standards. Specifically, the adopted rules meant that an entity would qualify as a dealer or government securities dealer if they regularly express trading interest as close to the best price on both sides of the market for the same security or earn revenue primarily from capturing bid-ask spreads or from capturing incentives offered by trading venues.
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| | | | | | Strategy | | | Activist Boom in Japan Is Upending Long-Short Stock Strategies
Momoka Yokoyama - Bloomberg
Takeover bids and activist intervention are shoring up shares of some Japanese companies seen as having weak fundamentals, making it harder for investors to succeed in short-selling strategies. Hints of the difficulty are starting to show in trading data. Japan's percentage of short-selling to total trades is at the lowest since July last year, in terms of the 60-day moving average.
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| | | | | | Miscellaneous | | | Millennium Lures Team With $100 Million Bid as Hedge Fund Talent War Rages
Nishant Kumar and Katherine Burton - Bloomberg
As the war to poach portfolio manager Chris Procaccini, 48, erupted among hedge fund giants, industry legend Izzy Englander intervened to secure a victory. Englander's offer: $100 million in potential payouts to Procaccini and his team. That deal got health care-focused portfolio manager to reject at least one rival bid to shut his $2.5 billion fund at Magnetar Capital and join Englander, 76, at his $75.8 billion hedge fund, Millennium Management.
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