| October 29, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Aquis Exchange and Cboe Europe today announced a joint venture, SimpliCT, to bid for the role of the EU's consolidated tape (CT) provider for equities. SimpliCT, co-owned by Aquis and Cboe, will be headquartered in the Netherlands and will aim to create a reliable, cost-effective CT solution to simplify and enhance visibility in EU equity markets. The venture aligns with the EU's Capital Markets Union objectives, aiming to attract global capital by improving market access and transparency. Both companies bring extensive expertise, handling over half of daily European equity trades, and plan to leverage their technology and operational strengths to meet the high standards expected by regulators.
The selection process, managed by the European Securities and Markets Authority (ESMA), will begin in June 2025, with a decision expected by the end of the year. If selected, SimpliCT will operate under a governance framework ensuring fair treatment of data contributors and consumers, providing a consolidated, real-time view of EU market activity.
MIAX Exchange Group shared on LinkedIn that MIAX Sapphire, the newest options exchange at the exchange group, officially crossed the one million contract milestone on October 25, 2024 when its volume reached 1,018,797 contracts traded.
The Wall Street Journal has a story today to help you open your next bottle of wine. The story is titled "The 14 Best Wine Openers, According to Sommeliers and Restaurateurs." ~JJL
| | | | | | Lead Stories | | | US interest rate options price in Republican sweep, jump in volatility
Gertrude Chavez-Dreyfuss - Reuters
Ahead of the U.S. presidential election next week, investors in interest rate options are putting on trades that will pay off if rates remain elevated, suggesting that the market is pricing in a sweep by the Republican party.
The options market is also bracing for the biggest post-election swings in U.S. Treasury yields in more than 30 years.
/jlne.ws/3C79Agj
Oil's Big Options Bets Turn Worthless as Iran Risk Fades
Alex Longley and Devika Krishna Kumar - Bloomberg
Traders who piled into bullish options bets on oil prices at record pace are waking up to a harsh reality: Most of those contracts are now worthless. Israel refrained from striking Iran's energy infrastructure in its long-awaited bombardment of the OPEC nation over the weekend, sending crude prices crashing. That plunge has helped contribute to a chunk of about 800,000 Brent December call options expiring without a profit on Monday as traders' urge to protect against a price spike evaporates.
/jlne.ws/40naU8R
Bullish Bets on Europe Gas Options Signal Supply Worries Linger; Derivatives show market has conviction that prices will rise; Higher LNG competition, transit agreement supporting the bets
Priscila Azevedo Rocha - Bloomberg
Natural gas options are signaling European traders still see upside risk for prices, even after concerns linked to the Middle East have receded.
The cost of insuring against price spikes or troughs is still hovering near the highest since the start of the heating season, showing investors continue to place bets that prices will rise.
/jlne.ws/3YoqKgQ
Options on Big Tech Stocks Show Investor Calm Ahead of Earnings; Narrow put skew shows limited demand for hedges: Optiver; Broader tech sector options appear inexpensive, Goldman says
Christian Dass and David Marino - Bloomberg
Options markets are pricing earnings-day moves for tech giants reporting this week that are largely in line with past swings, with investors showing limited demand for protection against selloffs.
Of the five major technology firms reporting earnings - Apple Inc., Microsoft Corp., Amazon.com Inc., Meta Platforms Inc. and Alphabet Inc. - only Meta is showing a large difference between what options are implying and the past moves. Meta has jumped more than 20% twice and dropped as much as 25% over the past eight releases, so even a 7% implied move pales in comparison.
/jlne.ws/4hrPKfI
The bond market is rarely this volatile outside of a crisis. Blame the U.S. election.; Options that expire soon after Nov. 5 point to election jitters roiling bonds
Joy Wiltermuth - MarketWatch
The U.S. bond market has rarely been this volatile outside of a market shock or unexpected event that roils financial markets.
That's based on a reading of the popular ICE BofA Move index by the gauge's creator, Harley Bassman, now a managing partner at Simplify Asset Management.
/jlne.ws/3YKoySp
Why Short Sellers Can't Even Get Along With Each Other; Traders betting against stocks are no more likely to trust each other than they are corporate executives.
Marc Rubinstein - Bloomberg
In the final episode of the HBO series Industry, young portfolio manager Harper Stern announces she wants to launch a short-only fund. "We'll knuckle down on companies who might be misleading the market, committing fraud or engaging in unethical business practices," she pitches. "We will find the liars, we will find vulnerabilities - and therefore what is mispriced - using a combination of forensic accounting and corporate espionage." Her prospective backer replies sarcastically: "You'll be popular."
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| | | | | | Exchanges | | | Introducing SimpliCT - Our First Step Towards a Bid to Operate the Equities Consolidated Tape
Stephen Dorrian - Cboe
Today, we were excited to announce our intention to form SimpliCT, a joint initiative between Cboe Europe and Aquis Exchange, which plans to explore a bid to operate the EU's equities consolidated tape. SimpliCT's aim would be to deliver a high-quality, low-cost and comprehensive view of European equity markets that can be trusted by institutional and retail investors.
This has been a passion project for us at Cboe - and many across the industry - for a long time.
From Cboe's perspective, our commitment to this initiative is because we believe so strongly in the benefits that a well-operated and governed tape can bring to EU capital markets, by enhancing transparency, democratising access to data and boosting liquidity.
/jlne.ws/4f0v10Z
Aquis Exchange and Cboe Europe to Launch SimpliCT to Explore Bid for EU Equities Consolidated Tape
Cboe
Aquis Exchange PLC (Aquis), a creator and facilitator of next-generation financial markets, and Cboe Europe (Cboe), a division of Cboe Global Markets, Inc., the world's leading derivatives and securities exchange network, are today pleased to announce their intention to form a joint venture which plans to explore a bid to perform the role of the EU's equity consolidated tape (CT) provider. The selection process for the EU equity CT is expected to begin in June 2025, with a successful applicant chosen by the end of 2025. Aquis and Cboe, operators of pan-European equity exchanges, technology and reporting services that collectively process over half of daily European equity trades, plan to establish and co-own a new company named SimpliCT (pronounced: simplicity), which will be based in the Netherlands and seek to leverage the expertise of its founders to develop a best-of-breed equity CT.
/jlne.ws/40pTzvY
CME Group Receives Approval to Establish Futures Commission Merchant
CME Group
CME Group, the world's leading derivatives marketplace, today announced it has received approval from the National Futures Association (NFA) to establish a futures commission merchant (FCM).
/jlne.ws/3NHmowv
CME Group Announces First Trades of Spodumene Futures
CME Group
CME Group, the world's leading derivatives marketplace, today announced its new Spodumene CIF China (Fastmarkets) futures have launched and are available for trading. A total of 29 contracts traded on the first day, with participation from a number of firms including JA Commodities (Zhejiang) Ltd, Mitsubishi Corporation RTM International Pte Ltd, Wogen Resources Limited and Wooray Commodities Pte Ltd. The first trade was executed by Freight Investor Services Ltd.
/jlne.ws/3YGEkgP
MIAX Exchange Group - Options And Equities Markets - Daylight Saving Time - November 2024
Mondovisione
Please be advised the MIAX Options, MIAX Pearl Options, MIAX Emerald Options, MIAX Sapphire Options and MIAX Pearl Equities Exchanges are scheduled to end Daylight Saving Time at 2:00 AM on Sunday, November 03, 2024. The MIAX Exchange Group will adjust the system time back 1 hour for trading beginning Monday, November 04, 2024.
/jlne.ws/3Us45zg
| | | | | | Regulation & Enforcement | | | FIA statement on CME's FCM license
FIA
FIA president and CEO Walt Lukken made the following statement today regarding the approval of CME's futures commission merchant (FCM) license.
"The approval of CME's FCM application is the latest and most significant example of a trend that raises serious concerns about market regulation and systemic risk. The approval comes at a time when the CFTC has yet to propose a strong rule to address conflicts among affiliated CFTC-regulated entities.
/jlne.ws/40ndkUU
| | | | | | Strategy | | | The Best Way to Start Investing in Commodities, According to the Pros; Market professionals say a small allocation can provide diversification and a hedge against uncertainty
Debbie Carlson - The Wall Street Journal
Figuring out the right allocation for commodities in a portfolio can be tricky. Too big an allocation leaves average investors subject to missed opportunities in other assets, since commodity investments don't pay dividends or have earnings. Too little or no exposure means not taking advantage of the diversification that commodities offer, and missing out when these assets rally during supply shocks.
Picking individual commodities is also tough since they don't move in lockstep, as what causes cocoa or copper prices to rally often doesn't matter to corn or crude oil.
The best strategy for investors, experts say: having a small, long-term position in a broad-based commodities exchange-traded fund.
/jlne.ws/48sHVm6
| | | | | | Miscellaneous | | | Traders Hunt Profit Playing Warped Election Betting Markets; With prediction market odds diverging from traditional polls, bettors are trying to capitalize in the final days before the presidential vote.
Charlie Wells and Claire Ballentine - Bloomberg
As anxiety and anticipation build ahead of the Nov. 5 presidential election, political bettors are setting aside emotion and hunting for ways to profit off the mixed signals being sent by polls and prediction markets.
While traditional voter surveys show a toss-up race, prediction markets have swung hard toward Donald Trump in recent days, pushing his odds of winning to 60% or above and giving rise to what look like price anomalies across different websites.
That's where bettors want to play.
/jlne.ws/3Yi7ams
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| | | Jeff Bergstrom
Editor
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