| August 22, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | U.S. stock options traders see little drama around Fed's Jackson Hole event
Saqib Iqbal Ahmed - Reuters
Federal Reserve policy has sparked big moves in markets this year, but options traders expect few fireworks around the central bank's annual symposium this week in Jackson Hole, Wyoming.
Options positioning shows traders expect a 1.4% move in the S&P 500 (.SPX) on Aug. 26, the day Fed Chairman Powell is set to give his speech, according to Matt Amberson, principal at options analytics firm ORATS. That is only slightly above the expected 1.0% daily move options are implying for stocks over the next month.
/jlne.ws/3PI10FG
Volatility Is Returning
Eric Wallerstein - WSJ
Anxiety is beginning to percolate on Wall Street. The Cboe Volatility Index (VIX), Wall Street's predominant gauge of fear, hit 23.23 on Monday as stocks fell across the board. That would be the index's highest closing level in nearly three weeks.
/jlne.ws/3pBZiLF
Meme stocks fall with AMC, Bed Bath in red
Anisha Sircar, Medha Singh and John Mccrank - Reuters
A clutch of stocks favored by retail traders tumbled on Monday in volatile trading as news that UK-based Cineworld (CINE.L) warned of a possible bankruptcy sent AMC Entertainment Holdings' shares (AMC.N)diving almost 40% on the day that the U.S. movie chain's preferred shares started trading.
/jlne.ws/3pIjOKp
Hedge Funds Pile Into a Record Hawkish Rate Bet Pre-Jackson Hole
Edward Bolingbroke - Bloomberg
Hedge funds are unleashing record bets that the Federal Reserve will stick to its hawkish script as they rapidly position for higher interest rates in a key corner of the derivatives market.
The group has collectively placed a big short across futures referencing the official successor to London interbank offered rate known as the Secured Overnight Financing Rate. This wager stands to benefit should Fed Chair Jerome Powell effectively rule out a dovish pivot at this week's annual symposium in Jackson Hole.
/jlne.ws/3PCFwKp
Volatility ETFs Climb as Traders Hedge Risk Ahead of Fed's Jackson Hole Conference
Max Chen - ETF Trends
The CBOE Volatility Index, or VIX, and volatility-related exchange traded funds jumped Monday as another round of aggressive interest rate hike speculation stoked fears of a potential economic recession ahead.
Among the best performing non-leveraged ETFs of Monday, the ProShares VIX Short-Term Futures ETF (VIXY) rose 5.0%. Meanwhile, the CBOE Volatility Index surged 16.3% to 24.0.
/jlne.ws/3A7VdU8
Federal Reserve Forward Guidance Is Increasing Market Volatility
Gary Shilling - Bloomberg
The Federal Reserve's forward guidance program has been a disaster, so much so that it has strained the central bank's credibility. Chair Jerome Powell seems to agree that providing estimates of where the Fed sees interest rates, economic growth and inflation at different points in the future should be junked. "We think it's time to just go to a meeting-by-meeting basis, and not provide the kind of clear guidance we had provided," he said after the Fed's July 26-27 monetary policy meeting.
/jlne.ws/3KdO8pU
Meme-Stock Vacation Is Over
Bloomberg
Here is a simplistic, wrong, but almost plausible history of stock-market investing:
Stock markets were invented to let people finance productive businesses and share in the profits. You and 100 other people give a railroad company some money to build tracks, it builds tracks, it runs trains, it makes money, it pays you all a nice 7% dividend out of the money it makes.
/jlne.ws/3TlnIqz
How a 20-year-old student made $110mn riding the meme stock wave
Antoine Gara and Madison Darbyshire - Financial Times
At the age of 18, Jake Freeman ran for US president, collecting signatures, forming a campaign committee and registering his bid with the Federal Election Commission.
"He wanted to be the youngest on the ballot," said Eray Sabuncu, a friend who attended the same suburban New Jersey high school and signed the 2020 election filing in the capacity of treasurer. "I didn't know then that he was going to be famous."
/jlne.ws/3wpshpJ
High-frequency trading firms can easily get to 64% accuracy in predicting direction of the next trade, Princeton study finds
Steve Goldstein - MarketWatch
To anyone paying attention, or just reading the latest musings from Michael Lewis, the one consistent way to make money in the stock market is to do so at an incredibly high frequency.
In its IPO filing in 2014, Virtu Financial VIRT, -2.01% said it had exactly one day of trading losses in 1,238 days. That kind of consistent profitability seems to be still the case: a new study from a team at Princeton University found that predictability in high frequency trading returns and durations is "large, systemic and pervasive".
/jlne.ws/3PFMUoA
| | | | | | Exchanges | | | No-Fee Trading's Hidden Price? $34 Billion a Year, Study Says
Eva Szalay - Bloomberg
Last year, five US professors opened two brokerage accounts and placed identical orders to test an algorithm. The next day, one was down by $150. The other was up $12.
They discovered it wasn't a one-time anomaly.
Over more than five months, the academics used their own funds to execute 85,000 trades in 128 different stocks and made what they consider an important discovery: They were getting significantly different prices to buy and sell shares, depending on which brokerage handled the trade. Extrapolating from the results, they estimate it costs small-time US investors as much as $34 billion a year, said Christopher Schwarz, the finance professor at the University of California, Irvine who wrote the study along with four colleagues.
/jlne.ws/3dOxelo
CME Group Opens Registration for its 19th Annual Global University Trading Challenge 2022
CME Group
CME Group, the world's leading derivatives marketplace, is calling on global college students interested in pursuing careers in finance and markets to register for its annual University Trading Challenge which will be held during October 2022. Registration for the global educational competition opens today.
/jlne.ws/3wmMJYm
| | | | | | Regulation & Enforcement | | | Leading the Charge: the CFTC Rewrite
Kate Delp - Depository Trust & Clearing Corporation
Nearly ten years ago, the U.S.'s Commodity Futures Trading Commission (CFTC) led the global regulatory community as the first jurisdiction to implement requirements for the reporting of over-the-counter (OTC) derivatives to a registered trade repository under the Dodd-Frank Act. As we near the 10th anniversary of trade reporting, it is fitting that the CFTC is set to lead the charge once again, this time with the upcoming launch of their rules rewrite as the global regulatory community works to revamp reporting requirements with a renewed focus on data harmonization.
/jlne.ws/3wlgXLe
'There's no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology': SEC chief Gary Gensler
Clive McKeef - MarketWatch
'We can dispense with the idea that crypto lending isn't subject to regulation. On the contrary, the rules have been around for decades. The platforms aren't following them.'
â Gary Gensler, Securities and Exchange Commission
What do car manufacturers have to do with crypto lending platforms? Consumers and investors deserve protection â that's true of motor vehicles and investment vehicles alike, U.S. Securities and Exchange chair Gary Gensler argues in a Wall Street Journal op-ed published Friday night.
/jlne.ws/3PExGjx
| | | | | | Strategy | | | Investing Strategy: Play Defense in Bear Market Rally, Wells Fargo Says
George Glover - Markets Insider
It's time for investors to get defensive and consider jumping out of stocks, which look caught in the middle of a bear-market rally, according to a Wells Fargo investment chief.
Darrell Cronk told Bloomberg TV he's skeptical about how well equities will perform over the rest of 2022, even though the S&P 500 has climbed more than 15% since hitting a low for the year in June.
/jlne.ws/3QKJK40
| | | | | | Miscellaneous | | | Cboe Global Markets hiring Marketing Manager - Remote in United States
LinkedIn
Job Description
Over the past 12 months, Cboe Global Markets has increasingly expanded its retail presence and is looking for an enthusiastic Marketing Manager to join the Marketing & Communications team.
/jlne.ws/3AeQpwr
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