| July 10, 2025 | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| Lead Stories | | | Trading firms Virtu and Citadel Securities clash over new options exchange; Virtu lends its support to IEX after Ken Griffin's firm criticised planned exchange's ability to cancel and reprice trades
George Steer - Financial Times
Virtu Financial has come out against rival Citadel Securities' attempts to block the opening of a new US options exchange, as the high-speed trading giant wades into a dispute over market structure that has sucked in some of Wall Street's biggest names.
The disagreement hinges on the implementation of a 350-microsecond so-called "speed bump" that US exchange operator IEX - made famous by the Michael Lewis's bestseller Flash Boys - hopes will protect traders on its proposed exchange from buying and selling options at stale prices.
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***** Also read Trading giant Virtu backs plan for IEX's proposed options exchange from Reuters.
India's ban on Jane Street hits options volumes; rebound expected in coming weeks
Bharath Rajeswaran - Reuters
The Indian markets regulator's ban on Wall Street trading giant Jane Street has squeezed volumes in the country's options market, but traders expect activity to snap back as larger investors step in.
The Securities and Exchange Board of India (SEBI) on July 4 barred Jane Street from trading and froze $567 million of its funds for manipulation of stock indexes through derivative positions. Jane Street told staff it plans to challenge the order, calling the trades in question "basic index arbitrage."
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Option Prices in India Sink on Key Expiry After Jane Street Ban
Chiranjivi Chakraborty and Ashutosh Joshi - Bloomberg
Investors are being careful given SEBI's "strong vigilance", with Tejas Shah, head of equity derivatives at Equirus Securities, saying "No players would want to enter their bad books".
On the surface, the first major expiration day for Indian derivatives after Jane Street Group's trading ban unfolded relatively smoothly. But a closer look showed a broad slump in options prices.
The value traded based on option premiums plunged to a four-month low for an expiration day, data from the National Stock Exchange of India Ltd., the world's top destination for the contracts, showed after Thursday's market close. It was almost 40% lower than the year's average for such days.
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Goldman Says Dollar Can Trade Like a Risky Currency Again
Isabella Ward and Matthew Burgess - Bloomberg
US dollar volatility may have settled down in recent weeks, but analysts at Goldman Sachs Group Inc. see plenty of reasons to think it may start trading like a "riskier" currency again.
Analysts Karen Reichgott Fishman and Lexi Kanter list elevated policy uncertainty related to trade tariffs and Federal Reserve independence, fiscal fears and diversification away from US assets as potential triggers.
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Central Banks Are Flying Blind on Hedge Fund Leverage; The risks of shadow banks trading in the government bond market are mounting.
Paul J. Davies - Bloomberg Opinion
Global central bankers have ducked a chance to push for tight borrowing constraints on the biggest hedge funds, whose importance to core government bond and other financial markets has grown enormously in the past decade. Such funds are at the center of so-called shadow banking, where the use of borrowed money and derivatives is a troubling source of instability that can hurt not only sophisticated investors, but also the pricing and supply of funding to all areas of the economy.
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| Exchanges | | | Cboe Options Exchanges to add nanosecond transaction time to market data and order entry
Maria Nikolova - FOW
Effective September 8, 2025, all Cboe-affiliated U.S. Options Exchanges will update the DateTime and Time Offset data types to provide nanosecond precision transaction time in market data feeds.
Additionally, a "Send Nanoseconds" port attribute will be added to allow customers to select nanosecond or microsecond transaction times.
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Miami International Holdings Reports Trading Results for June 2025; Market Share and Volume Records Reached Across Multiple Options and Futures Exchanges; MIAX Exchange Group Reaches Record 16.7% Options Market Share in Q2 2025
Miami International Holdings, Inc.
Miami International Holdings, Inc. (MIH), a technology-driven leader in building and operating regulated financial markets across multiple asset classes, today reported June 2025 trading results for its U.S. exchange subsidiaries-MIAX, MIAX Pearl, MIAX Emerald and MIAX Sapphire (collectively, the MIAX Exchange Group), and MIAX Futures.
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CME Group International Average Daily Volume Hits Record 9.2 Million Contracts in Q2 2025, Up 18% Year over Year
CME Group
CME Group, the world's leading derivatives marketplace, today announced that its quarterly international average daily volume (ADV) reached a record 9.2 million contracts in Q2 2025, up 18% year over year. Reflecting all trading reported outside the United States, this growth was driven by record quarterly ADV in EMEA and APAC. Quarterly international records were achieved in Interest Rate, Equity Index, Energy, Agricultural and Metals products up 14%, 38%, 23%, 3% and 14% respectively.
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| Regulation & Enforcement | | | How India's Regulator Built Its Case Against Jane Street; A behind-the-scenes account underscores the complexity of SEBI's case
Menaka Doshi - Bloomberg
It's all anyone can talk about this week in India's equity markets - the big derivatives hustle. So far the focus has been on market regulator SEBI's allegations of price manipulation by Jane Street, which led to a temporary market ban and recovery of profits. Soon it will be the Wall Street firm's turn to put the regulator in the dock.
As the matter inevitably heads to court, it will test SEBI's most intensive investigation ever of complex trade and risk data across cash and derivative markets, according to a person close to the matter who preferred to remain anonymous for confidentiality reasons.
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Jane Street's India spat touches regulatory nerve
Liam Proud - Reuters
Jane Street loves a puzzle. The U.S. trading firm's website provides a fresh one, opens new tab every month or so, usually math or logic-based, along with the names of riddlers who submitted the right answer. Yet following a major bust-up with India, the group is now at the centre of its own head-scratching conundrum: how can two observers look at the same set of numbers and see entirely different behaviour?
Jane Street wears two hats. It's a proprietary trader, taking directional bets on its own account, and also a market maker that provides liquidity to buyers and sellers. As banks have often found out, the line between the two activities can be blurry.
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Hedge funds should face limits on leverage, global regulator recommends
Tommy Reggiori Wilkes and Valentina Za - Reuters
Regulators should consider limits on leverage used by non-bank financial firms such as hedge funds as well as measures to curb their size, the Financial Stability Board (FSB) said on Wednesday in a series of recommendations to make "shadow banking" safer. Non-bank financial institutions, including hedge funds, private credit providers and insurers accounted for $218 trillion, or just under half, of the world's financial assets in 2022, according to the G20's FSB, a group comprising the world's biggest financial regulators and authorities.
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| Strategy | | | European Gas Rises as Traders Watch Spikes in Global Demand
Elena Mazneva - Bloomberg
European natural gas extended this week's gains, with traders weighing ample supplies with pockets of higher demand in different parts of the world that could potentially tighten the market.
Benchmark futures added 2.5%, the biggest daily increase in three weeks, and settled at the highest since June 25. The advance follows a relatively calm period, where historic 10-day volatility dropped to levels last seen in September 2021.
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| Education | | | The Index Industry Association (IIA) has launched a free, CFP Board-approved continuing education program titled "The Important Role of Indexes to Financial Markets and Investing," designed for both financial professionals and the broader public. This 40-minute on-demand webinar, led by experts from S&P Dow Jones Indices, Cboe Global Markets, and Morningstar Indexes, provides an accessible overview of index fundamentals, construction methodologies, and practical applications for improving investor outcomes. Participants-including CFPs, investors, and policymakers-can earn CE credit by completing a brief self-test. The course emphasizes the crucial role that indexes play in measuring performance, identifying trends, and informing investment decisions, while also highlighting the complexity behind index development and management. The initiative reflects the IIA's commitment to transparency, education, and fostering informed dialogue across the financial ecosystem. ~JJL
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| Miscellaneous | | | Reflecting on Career Journeys with Cathy Clay, Liz Dierking and Jenny Andrews
Cboe
With the summer internship season underway, we're reflecting on the beginning of our career journeys and how our team members got to where they are today. Cathy Clay, Executive Vice President, Global Head of Derivatives, Liz Dierking and Jenny Andrews, former market makers and now the hosts of tatylive's The LIZ and JNY Show, all share one thing in common, they began their journeys on an options trading floor.
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Hedge funds to blame for coffee price surge, says Lavazza boss; Italian company chair blames speculators for '80 per cent' of price rise that created 'unbelievable' volatility
Susannah Savage - Financial Times
Hedge funds and other financial speculators were to blame for "80 per cent" of the surge in coffee prices that created "unbelievable" volatility and uncertainty in the market, the head of the Lavazza coffee company said. Giuseppe Lavazza, chair of Lavazza Group, which owns the eponymous brand, hit out at the "big investment funds" that had driven prices to levels that were "totally unsustainable for the industry, totally unsustainable even for the consumer".
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