| April 05, 2016 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
2016 Exchange CEO Series: SGX's Boon Chye Expanding With New Products, New Platform in 2016
JohnLothianNews.com
Loh Boon Chye took over the Singapore Exchange CEO post in July 2015 with a focus on growing the overall business in derivatives, clearing and equities. But he faces headwinds across the asset classes as China's economy slows. Boon Chye, however, believes the exchange is well positioned to move forward in 2016.
SGX has made a name for itself by introducing equity index futures with the Nikkei 225 futures, among others. The exchange now is broadening its China product suite with the introduction of a series of equity derivatives based on MSCI indexes including the MSCI China Free Index. The new product follows the FTSE China A50 futures contract, which ranked 18th among global futures exchange in 2015, and traded 95.8 million contracts last year, up 131 percent from 41.3 million contracts a year earlier, according to the Futures Industry Association annual survey.
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| | | | | | Lead Stories | | | Treasuries Volatility Plunges as Interest-Rate Outlooks Converge
Eliza Ronalds-Hannon - Bloomberg
Volatility in the $13.3 trillion market for U.S. Treasuries is plunging, approaching the lowest since 2014, as traders wager yields will remain in a narrow range amid broad-based demand for U.S. debt and assurances that policy makers will raise interest rates gradually.
jlne.ws/1qnQW9W
****SD: Also see WSJ's The Federal Reserve is Back in the Drivers Seat
Low VIX Is The New Normal For Now, Says Goldman
ValueWalk
After establishing a range for the VIX index in September significantly higher than current levels, a Goldman Sachs report out Monday says a low VIX into the "Dead-Zone" might be the new norm - at least until fundamental data improves and a related tone change from the U.S. Federal Reserve on interest rates occurs.
jlne.ws/1qo9I0W
****SD: According to Google Trends, the popularity of "new normal" as a search reached its peak in September 2012. For more on Goldman's outlook, see Goldman Sachs: Break in Stock Repurchases to Threaten Market Rally
OCC Appoints Two New Members to Board of Directors
Press Release
In its role as the foundation for secure markets, OCC, the world's largest equity derivatives clearing organization, today announced that Susan E. Lester, a long-time banking executive, has joined the board of directors as a Public Director, replacing Matthew B. Gelber of Bitterroot Asset Management, LLC, and William T. Yates of TD Ameritrade has joined the board as a Member Director, replacing Judith M. Kula of Wolverine Execution Services, LLC. Lester and Yates were elected to three-year terms.
jlne.ws/1q3F7oy
New Russell Investments survey finds financial advisors are focused on market volatility over other business challenges
Russell Investments
A substantial majority of financial advisors (72%) pointed to market volatility as a key factor contributing to changes in how they manage their businesses, according to the latest iteration of the Financial Professional Outlook (FPO) survey by Russell Investments. Other issues, including an aging client base (40%), rising interest rates (28%) and the impending regulatory challenges related to the proposed Department of Labor's (DOL) fiduciary standard (34%), were identified at significant, but much lower rates.
jlne.ws/1q3GhAH
****SD: "Sixty-one percent of advisors expect slight or no impact from the DOL fiduciary standard proposal, with only 21% expecting a significant impact."
There's Still Gloom Hanging Over the Stock Market
Ben Eisen - WSJ
The S&P 500 Index is up 13% from the lows of February, but there's still plenty of gloom hanging over the market. There's a plethora of risks to contend with as we move through April. The Federal Reserve could shift toward a less dovish outlook at its April meeting. The election season is sure to heat up, adding to political uncertainty. Earnings are set to be pretty dismal. Plus, the latest readings for the Federal Reserve Bank of Atlanta's real-time gross-domestic product tracker show economic growth coming in at a measly 0.7% for the first quarter.
goo.gl/YTlXEc
****SD: "It's quiet...too quiet." Or how about, "Red sky in the morning, traders take warning. Red sky at night, traders still take fright."
Swiss franc, yen may gain most vs pound on Brexit, options indicate
Reuters via CNBC
The Swiss franc and Japanese yen may be the biggest gainers from falls in sterling in the run-up to Britain's referendum on whether to leave the European Union, options prices suggest. With polls indicating a close vote on June 23, the costs of hedging via options against volatility in the pound have soared to six-year highs. Options give holders the right to buy a currency at a pre-set level and can be used either to defend against a big move or to speculate on one.
jlne.ws/1qo5SVL
****SD: "'Insert safe haven' stands to gain vs 'insert asset class' on 'insert uncertain subject matter'"
Ally Financial to Buy Online Broker TradeKing Group For $275 Million
WSJ
Ally Financial Inc. will announce plans to acquire online brokerage firm TradeKing Group Inc. for about $275 million on Tuesday, the lender said.
jlne.ws/1q3XASa
****SD: Not to be confused with DraftKings, which despite recent setbacks, would likely sell for more than $275 million. (How 'bout that whiz-bang Tourney conclusion last night?)
| | | | | | Exchanges | | | Derivative investors doubt benefits of LSE-Deutsche Börse tie-up
Philip Stafford - Financial Times
Deutsche Börse's $20bn combination with the London Stock Exchange Group promises an "industry-defining combination" but there are doubts that traders and investors relying on derivatives in a post-crisis world will see the benefits. The deal will bring together London, Europe's leading financial hub with Frankfurt, the home of the European Central Bank and the eurozone, into a behemoth able to trade in equities and futures, benchmarks, index and data analytics.
jlne.ws/1q3X5HA
ICE prepares GBP10bn LSE bid to rival Deutsche Boerse; According to reports
Anna Fedorova - InvestmentWeek
The owner of the NYSE said it was considering bids following the news of merger talks between the LSE and Deutsche Boerse, Germany's exchange.
goo.gl/GGimwy
Exchanges highlight mixed month for volumes
Julie Aelbrecht - Futures & Options World
Commodities markets outperformed their equities peers by volume last month
Derivatives trading hubs Euronext, the Australian Securities Exchange and broker Icap have reported mixed trading results for March, suggesting equities derivatives markets had a slow month compared to their commodity trading peers. Euronext said on Tuesday total volume of derivatives trades fell 4.7% to 10.7 million lots, down from 11.3 million in March 2015. The Paris-based exchange reported the heaviest losses in equity index derivatives, where volumes fell almost 12%, with a 30.8% drop in index options. Individual equity derivatives were down 4.3%. Commodity futures and options rose 32.1% compared to the corresponding period last year.
jlne.ws/1qo6t9M
****SD: Quick recap of exchange marketshare here
Bats Global Listing Offers Up a Test
Maureen Farrell and Austen Hufford - WSJ
Exchange operator Bats Global Markets Inc. launched its long-awaited initial public offering after the abrupt cancellation of a prior attempt, in what will serve as a test of both its own exchange and the broader new-issue market. Bats on Monday began its "roadshow" to market the IPO to investors, four years after a software glitch led it to pull the plug on the last attempt. The offering could generate up to $212.8 million for Bats investors, which include banks and private-equity firms, according to a securities filing Monday.
jlne.ws/1q3XGsT
Intercontinental Exchange Reports ICE & NYSE March & First Quarter 2016 Statistics
Press Release
ntercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported March and first quarter 2016 trading volume and related revenue statistics, which can be viewed on the company's investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
jlne.ws/1qnWTnk
****SD: Also see ICE Sees Double Digit ADV Losses Across Key Assets, FX Rebounds
Euronext announces volumes for March 2016
Euronext
Euronext, the leading exchange in the Eurozone, today announced trading volumes for March 2016.
jlne.ws/1qo4dzi
Saudis Want to Double Stock Market for a Post-Oil Economy
Deema Almashabi and Glen Carey - Bloomberg
Saudi Arabia plans to almost double the size of its stock market, among the most closed in the world, by adding dozens of companies and making it easier for foreigners to invest. The kingdom aims to attract privately owned firms to list while privatization by the government will also boost the market, said Mohammed Al-Jadaan, chairman of the Capital Market Authority, the country's regulator. The Tadawul All Share Index will increase to 250 companies from about 170 now and its $380 billion market capitalization will grow to match the size of Saudi gross domestic product within seven years, he said.
jlne.ws/1qo4lyJ
NYSE Launches New Suite Of Services For Small- To Mid-Cap Growth Companies
Press Release
The New York Stock Exchange, part of the Intercontinental Exchange (NYSE: ICE) global network of exchanges, today introduced an enhanced range of services for issuers on NYSE MKT, which exclusively serves small- to mid-cap growth companies.
jlne.ws/1qnQMQ2
DGCX Breaks Several Records in the First Quarter of 2016
Zawya
First quarter volumes on the Dubai Gold & Commodities Exchange ( DGCX ) grew 37% from the same period last year, trading more than 4.5 million contracts - the highest quarterly volumes in the history of the Exchange. DGCX also broke several records during Q1-2016. Average Daily Volumes (ADV) in the first quarter reached 72,306 contracts, recording a significant growth of 39%. Indian Rupee Options gained particularly well with trading 80,935 contracts, up 217%. Similarly, in energy segment - WTI contract witnessed an increase of 305%, registering a total of 37,640 contracts.
jlne.ws/1qo853g
Sebi plans trading in weather derivatives
Business Standard News
The Securities and Exchange Board of India (Sebi) plans to allow trading in weather derivatives, a financial instrument for managing this risk in the agricultural sector. Sources say a Sebi panel is analysing pricing models on such derivatives and working on the infrastructure needed. Unlike other financial derivatives, those on the weather do not have a definite pricing model.
jlne.ws/1qo5WVx
ICE Coal Futures rise 12% on month in March to 208 mil mt - Coal
Platts
The volume of coal traded and cleared on the ICE Futures platform during March rose 12% month on month to 208 million mt, which was also 8% higher than the same month in 2015, according to data from energy exchange ICE Futures Europe and electronic trading platform globalCOAL Tuesday. March's monthly volume comprised 37%, or 77.3 million mt, of options, which was 14% higher than February's total but 18% lower than a year ago.
jlne.ws/1qo7Xkp
| | | | | | Regulation & Enforcement | | | EU watchdog backs more competition in derivatives clearing
Reuters
Nasdaq Inc, broker ICAP Plc and London Stock Exchange Group Plc won regulatory backing on Monday for their efforts to ensure more customer choice in the trading and clearing of financial derivatives in the European Union.
jlne.ws/1q3Xc5W
Oystacher Says Speed Chess, Not Spoofing, Is Behind His Trades
Matthew Leising - Bloomberg
Speed chess player has very fast reflexes, court filing says; U.S. seeks to bar Oystacher from market while case proceeds
Igor Oystacher, the co-founder of 3Red Trading LLC accused of manipulating markets by rapidly placing trades he never intended to execute, has exceptional reasoning skills -- in the 99th percentile -- that gave him the capacity to quickly follow through on orders, his lawyers said.
goo.gl/z8zalR
| | | | | | Technology | | | (Re) Introducing TradeCo
Trade Talk - Trading Technologies
TradeCo is a proprietary trading group that is a subsidiary of Trading Technologies. It has been operating for around 15 years under a few different names, but always known internally as "TradeCo." Traditionally, TradeCo was set up as a group of individual traders making their living as independent shops under one roof. Now, we are a small group working together as single unit.
jlne.ws/1VqE6mw
| | | | | | Strategy | | | Strategist David Zervos Is Recommending Emerging Markets for the First Time Thanks to 'Currency War Truce'
Bloomberg
You can count Jefferies Chief Market Strategist David Zervos among the investors who thinks this emerging market rally has legs. A cautious Fed, a rebound in oil prices, strong inflows, and country-specific factors like Brazil's seeming move to stamp out corruption, helped the MSCI Emerging Markets Index outperform its all-world counterpart and the S&P 500 in the first quarter of 2016. In a note to clients, Zervos announced that he was taking profits in his "Spoos and Blues" trade (long U.S. equity futures and Eurodollars) and deploying some of those proceeds in call options for the exchange-traded fund that tracks the MSCI Emerging Markets Index.
jlne.ws/1qo8C5w
Stocks: Never Short a Dull Market
Barron's
Oppenheimer's Ari Wald warns investors to "never short a dull market."
jlne.ws/1q3WnKx
Options - Riding Black Swans
FXStreet
The expression "Black Swan" existed as a description of something that couldn't possibly exist, at least as far back as ancient Roman times. It was used in that way until black swans were actually found in Australia in 1697. Since then it has described things that were only thought to be impossible, until they occurred. The world of finance has had many black swans. The market crashes of 1929, 1987 and 2008 are obvious examples. No one predicted them beforehand; they are understood only in hindsight. Black swans are not always negative events, however. The rise of the internet and the personal computer were also black swans.
jlne.ws/1qo5d6s
****SD: Life Pro Tip: don't ever try to ride an actual swan. They are quite ill-tempered creatures.
Are You Trading According To Your Core Principles?
Cam White - Nadex
Here's an interesting exercise that was posted by Dr. Brett Steenbarger, PhD, a well-known trading psychologist. Step One (Get out a pencil and a piece of paper): Quickly jot down your five most important trading principles: the rules you will not violate - and cannot violate - in order to be successful. Write these down before you read any further. (Insert Jeopardy Music) Okay, have you finished that assignment? Now take a look at how long it took you to think of and write down those five cardinal trading principles. If it took effort to think of them and took you a while to write them down, then you've learned one thing: Your trading principles are not front and center in your mind.
goo.gl/oZWbD2
The Benefits And Drawbacks Of Market Tranquility
Seeking Alpha
After a bumpy start to 2016, the stock market seems to have calmed down. While the S&P 500 index of large US stocks moved by more than 1% on almost 60% of the trading days in the first two months of the year, it did so only three times in March. Meanwhile, the CBOE Volatility Index (often called the "VIX"), a measure of expected stock market volatility, has plunged to well below its long-term average of about 20. For investors, this tranquility provides both an opportunity and a potential pitfall.
jlne.ws/1qoaYRL
Earnings This Week - 4/4 - 4/8
CBOE Options Hub
This will be the last quiet earnings week for about a month. The numbers below represent three years of history. After the ticker the columns show the biggest gain, biggest drop, average move (non-directional) and stock price reaction last quarter.
jlne.ws/1qo9lDG
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