| January 03, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Welcome to 2023. Remember to start using that year when writing checks or dating papers or anything else that requires a date. Let's hope 2023 brings us all improvement and progress, good health and strong relationships. ~JJL
| | | | | | Lead Stories | | | US Stock Options Smash Record, Surpassing 10 Billion Contracts; Single-stock and index options more than double 2019 levels; Yearly growth slows, retail traders retreat from market
Jan-Patrick Barnert - Bloomberg
The boom in stock market options shows no sign of let up, as the number of traded US contracts surpassed the 10-billion mark in 2022 for the first time ever, playing a role in the biggest equity rout in over a decade. For the third straight year, contracts in US single-stock and index options set a record, more than doubling from the level three years ago.
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How Early Exercise Order Flow Impacts Equity Option Put/Call Ratios
Henry Schwartz - Cboe
The ratio of listed option put volume to call volume is a well-known measure for traders who appreciate a relatively simple metric comprised of accessible data that can be applied across assets and time frames.
Like most indicators, interpretation of the put/call ratio involves several assumptions - primarily that puts express a bearish view, while calls are bullish. Like the Cboe Volatility (VIX ) Index, a high put/call ratio is often considered a sign of investor uncertainty, while a low level usually indicates optimism. Historical data generally supports this assumption, as the put/call ratio typically spikes during crashes and reverts to lower levels in bull markets.
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Is the VIX 'broken'? Here's why Wall Street's 'fear gauge' no longer reflects the sorry state of stocks
Joseph Adinolfi - Morningstar
Stocks are about to cap off their worst year since 2008, but you wouldn't be able to tell by looking at the VIX, some say.
U.S. stocks are about to cap off their worst year since 2008. But investors wouldn't know it by glancing at what's often referred to as Wall Street's favorite fear gauge, which has recently failed to reach new heights as stocks tumbled to fresh lows.
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Commodities trading boom raises fear of big losses among retail investors; Experts warn of market volatility as trading volumes of gold, oil, silver and copper have surged
Madison Darbyshire and Nicholas Megaw - Financial Times
Growing numbers of retail investors are being drawn into commodity trading after two consecutive years of bumper returns, despite concerns that they could suffer huge losses or disrupt the complex and volatile markets. Retail trading volumes in commodity futures and the largest commodity-focused investment funds surged in 2022. But while activity has been spurred by commodities' much better recent record than that of stocks and bonds, some market participants and analysts have voiced fears about retail traders wading in to a highly volatile market dominated by specialised players.
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Pimco Ranks as 2022's Biggest Loser in $6.5 Trillion ETF Market
Katherine Greifeld - Bloomberg
A brutal 2022 for bonds delivered the worst year ever for Pacific Investment Management Co.'s exchange-traded fund business.
Investors pulled nearly $3.6 billion from over 20 Pimco and Allianz-branded funds, the biggest cumulative outflow ever for the asset manager, Bloomberg data show. That exodus also ranked as the largest among US issuers in 2022, a year when ETFs absorbed over $580 billion of inflows overall.
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Cryptocurrencies Start Year With Low Trading Volume After 2022 Downturn
Vildana Hajric - Bloomberg
Cryptocurrencies are starting the year with a whimper as trading volumes remain desiccated in the wake of 2022's numerous industry scandals and meltdowns.
Trading volumes on Binance, the biggest digital-assets exchange, are at lows not seen since last summer, while those outside of the platform are also shallow, according to Bendik Schei and Vetle Lunde at Arcane Research.
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Investors to Face Volatility and Persistent Inflation in 2023: BlackRock
Jennifer Sor - Markets Insider
Markets are being rocked by the biggest macro storm in decades, and investors need to brace themselves for volatility and persistent inflation in 2023, BlackRock strategists warned.
"Last year's shocks were extreme, causing sharp stock and bond sell-offs," strategists said in a note on Tuesday, pointing to factors like Russia's war on Ukraine, ongoing supply-chain issues, and hawkish central bankers in the face of rising inflation.
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Farmer sentiment rebounds at year end on stronger 2022 income
CME Group
Following a two-month decline and a year of weak sentiment, the Purdue University/CME Group Ag Economy Barometer closed out the year on a more positive note, rallying 24 points in December to a reading of 126. U.S. farmers were more optimistic about both their current situation and expectations for the future. The Current Conditions Index jumped 37 points to a reading of 135, while the Future Expectations Index increased 18 points to a reading of 122. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers' responses to a telephone survey. This month's survey was conducted from December 5-9.
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| | | | | | Regulation & Enforcement | | | US Bank Watchdogs Issue Joint Warning on Crypto Activities
Benjamin Bain - Bloomberg
The top US bank regulators issued a fresh warning to lenders about the risks associated with delving into crypto.
The Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency on Tuesday detailed several concerns with the volatile asset class. Officials said in a statement that it was important that risks that can't be controlled aren't allowed to migrate to the banking system.
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FTX Collapse: Beware the Dangers of Crypto Regulation
Tyler Cowen - Bloomberg
The collapse of FTX and the charges against Sam Bankman-Fried have brought many renewed calls for crypto regulation, from both commentators and legislators. That is precisely why this is a time for caution. No matter how strong the temptation, we should not overregulate.
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| | | | | | Education | | | Four Tips for Options Trading for the New Year and Beyond
Bob Lang - TheStreet
In this second part of a two-part series, we'll explore balancing the news with the charts, how to avoid jumping the gun, and more.
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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| | | Jeff Bergstrom
Editor
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