| | | | | | | March 13, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | US swaption investors pay steep price for hard-landing bets
Gertrude Chavez-Dreyfuss - Reuters
Investors in U.S. interest rate options are paying a premium for trades that will pay off if there is a dramatic drop in interest rates, suggesting the derivatives market is pricing in a sharper slowdown than anticipated in the world's largest economy.
This situation was a big turnaround from before the January 20 inauguration of U.S. President Donald Trump when traders in so-called "swaptions" were positioned for more tightening from the Federal Reserve due to the incoming administration's planned tariffs and expectations that it would increase fiscal spending.
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Dollar's Slide Pauses as Traders Use Options to Bet on a Rebound
Vassilis Karamanis - Bloomberg
Traders look to be turning more optimistic on the dollar after its worst start to the year since Donald Trump's first term as US President.
The greenback advanced against most of its Group-of-10 peers on Thursday, helping the Bloomberg Dollar Spot Index stabilize after a more than 3% slump this quarter on concern that a trade war will weigh on the US economy.
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VIX has turned less sensitive to stock sell-off
Jamie Chisholm - MarketWatch
Some investors worry that the stock market will struggle to secure a meaningful rebound after the recent sell-off if the CBOE VIX index doesn't fall back.
The VIX, is an option-derived measure of expected S&P 500 volatility that's known as Wall Street's fear gauge. Its long-run average is about 19.5 but it spiked above 29 on Tuesday as stocks swooned.
But Jonathan Krinsky, technical strategist at BTIG, observes that there are signs option traders are becoming less stressed.
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'Buy the dip' calls fade as Trump selloffs rattle Wall Street
Carmen Reinicke and Alexandra Semenova - Bloomberg
In a few short weeks, President Donald Trump has started silencing the buy-the-dip stock traders who set the tone on Wall Street for the better part of two decades. In their place are growing calls to lock in profits and sit on the sidelines while Trump's trade-war chaos upends the economic outlook - and casts uncertainty over who, if anyone, will emerge as the new era's stock-market winners.
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An 'Untradable' Market: Trump Sows Profound Uncertainty for Stocks; The administration's whipsawing moves are leaving investors guessing. The risk is that this uncertainty comes at a real cost to the economy.
Joe Rennison - The New York Times
Investors are adept at finding ways to navigate just about any government policy, good or bad. Tariffs, once set, can be modeled for how they will affect corporate profits, prices and, in turn, the broader economy. The mass firings of federal workers can be analyzed for how they might increase unemployment. The thing that investors really struggle to put a price on is uncertainty. And right now, there is a profound sense of uncertainty in the stock market.
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***** A recurring theme from several exchange executives was that in the short term the uncertainty producing volatility was good for volumes and the exchanges, but in the long term it undermines investments by firms in infrastructure and hiring and that will ultimately hurt the financial markets.~JJL
Wall Street slides after Trump escalates tariff threats against EU
Johann M Cherian and Pranav Kashyap - Reuters
U.S. stock indexes fell on Thursday following President Donald Trump's threat to impose additional tariffs on imports from the European Union, although data showing cooling inflation offered some respite.
In his latest trade salvo, Trump said he would levy 200% duty on European beverage imports unless the EU removes surcharges on U.S. whiskey. He had previously threatened to penalize the bloc if it imposed retaliatory tariffs on American goods next month.
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Multistrategy Hedge Funds' Haven Appeal Tested Amid Trump Trade War
Nishant Kumar, Katherine Burton, Bei Hu, and Siddharth Vikram Philip - Bloomberg
Multistrategy hedge funds are facing their biggest challenge since the early days of the pandemic amid a market selloff that's forcing them to unwind crowded trades at a ferocious clip.
Citadel and Millennium Management, the world's largest multistrats, slumped in February and posted more losses during the first week of March, according to people familiar with the returns.
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Brevan Howard Slashes Traders' Risk-Taking as Losses Exceed 5%
Nishant Kumar and Donal Griffin - Bloomberg
Macro hedge fund specialist Brevan Howard Asset Management is slashing the amount of risks that its traders can take amid a performance slump that has wiped out last year's gains. The firm's Chief Executive Officer Aron Landy has taken some defensive steps in recent days given rising volatility and market chaos, people with knowledge of the matter said, asking not to be identified because the information is private. That includes lowering risk limits for some traders, the people said.
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| | | | | | Exchanges | | | Hong Kong Mulls Lowering Threshold to Buy Most Expensive Stocks
Kiuyan Wong - Bloomberg
Hong Kong's stock exchange is discussing options to lower the threshold for investors to buy some of the city's most expensive stocks to stoke trading, according to people familiar with the matter. In background meetings between Hong Kong Exchanges & Clearing Ltd. and the brokerage community in recent weeks, bourse officials raised the option of streamlining the minimum trading unit, or board lot, of each stock, the people said, asking not to be named because the matter is private.
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CME Group Inc. Announces First-Quarter 2025 Earnings Release, Conference Call
CME Group
CME Group Inc. will announce earnings for the first quarter of 2025 before the markets open on Wednesday, April 23, 2025. Written highlights for the quarter will be posted on the company's website at 6:00 a.m. Central Time, the same time it provides its earnings press release. The company will also hold an investor conference call that day at 7:30 a.m. Central Time, at which time company executives will take analysts' questions.
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Product Modification Summary: Expiry Date for Good Friday 2026 for Certain Options on Foreign Exchange (FX) Futures Contracts - Effective March 12, 2025 [Corrected Advisory Number]
CME Group
Expiry Date for Good Friday 2026 for Certain Options on Foreign Exchange (FX) Futures Contracts.
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Product Modification Summary: Expiry Date for Good Friday 2026 for Certain Options on Foreign Exchange (FX) Futures Contracts - March 12, 2025
CME Group
Expiry Date for Good Friday 2026 for Certain Options on Foreign Exchange (FX) Futures Contracts.
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REVISED: New Product Summary: Initial Listing of the Soybean Oilshare Futures and Options on Soybean Oilshare Futures Contracts (Add Strike Scale) - Effective March 31, 2025
CME Group
Initial Listing of the Soybean Oilshare Futures and Options on Soybean Oilshare Futures Contracts (Add Strike Scale)
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| | | | | | Regulation & Enforcement | | | CFTC Open to 'Reasonable' Offers to Settle Compliance Violations
Nicola M White - Bloomberg
The US derivatives regulator is giving firms in its crosshairs two weeks to submit "reasonable" offers to settle certain enforcement cases, the latest sign of a softer Trump-era approach to policing the commodities market.
Eligible cases include allegations of compliance violations, such as recordkeeping failures, Caroline Pham, acting chairman of the US Commodity Futures Trading Commission, told attendees of a conference in Florida. Cases involving fraud and market abuse won't qualify, she said.
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SEC postpones ruling on Fidelity Ether ETF options; The agency delayed similar proposed rule changes by other exchanges in February.
CoinTelegraph
The US Securities and Exchange Commission has postponed ruling on whether or not to permit Cboe BZX Exchange to list options tied to asset manager Fidelity's Ether exchange-traded fund (ETFs).
The agency has given itself until May 14 to approve or disapprove of Cboe BZX's request to list options tied to Fidelity Ethereum Fund (FETH), according to a March 12 SEC filing.
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| | | | | | Technology | | | Miami International Holdings and BSX unveil new trading and settlement platform; New technology platform will utilise MIAX's proprietary trading, middle- and back-office technology; clearing, settlement and depository technology will be built in conjunction with Vermiculus.
Wesley Bray - The Trade
Miami International Holdings (MIM) has launched a fully integrated trading, clearing, settlement and depository (CSD) technology platform for The Bermuda Stock Exchange (BSX). "The launch of the new BSX technology platform represents an important milestone in our strategy to build and operate all our exchanges utilising proprietary MIAX technology," said Thomas Gallagher, chair and chief executive at MIH.
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Euronext scales up its SaaS offering with the acquisition of Admincontrol
Euronext
Euronext announces that it has entered into a definitive agreement with Visma to acquire 100% of Admincontrol, a leading provider of governance and secure collaboration Software as a Service (SaaS) solutions in the Nordics and in the UK. On 8 November 2024, as part of its "Innovate for Growth 2027" strategic plan, Euronext outlined its ambition to scale up its SaaS offering and increase Euronext's share of subscription-based revenues. Euronext significantly accelerates this strategic ambition through the contemplated acquisition of Admincontrol. This acquisition strengthens the development of Euronext Corporate Solutions in the Nordics and in the UK. It more than doubles the size of the Euronext governance offering and broadens capabilities with state-of-the art solutions addressing mission-critical workflows.
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| | | | | | Moves | | | Texas Stock Exchange Hires Nasdaq, Cboe Executives for ETP Push
Katie Greifeld - Bloomberg
An upstart stock exchange based in Texas has poached top talent from its big-name rivals as it prepares its push into the $11 trillion exchange-traded fund world.
Cboe Global Market's former head of exchange-traded products listings Robert Marrocco will join the Texas Stock Exchange as its global head of ETP listings, while Nasdaq's former head of ETP listings Alison Hennessy will join as TXSE's managing director of ETPs, according to a Thursday press release.
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| | | | | | Strategy | | | Stagflation Trade Emerges as Rare Winner in US Stock Market Rout
Natalia Kniazhevich - Bloomberg
There have been few winning strategies to seek refuge in as the stock rout sparked by President Donald Trump's start-stop tariff war drags on for a third week. One, though, is soaring right now: a pair trade that bets on stocks that thrive in an economy sinking into stagflation. A Goldman Sachs Group Inc. basket bets on strength in commodities and defensive sectors like health care, and is short on the consumer discretionary sector, semiconductors and unprofitable tech stocks. As of Tuesday, it's the bank's best-performing US long-short basket in 2025, up nearly 20% compared to the S&P 500 Index's 5.3% decline.
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Are we now in a stock-market correction, pullback or bear market? Here are six charts to watch.; Watch the 'VIX, the Cboe put-call ratio and stock-market breadth for clues about when the bottom might arrive
Joseph Adinolfi - MarketWatch
After a turbulent month for U.S. stocks, many investors are wondering: What's happening with the market, and where is it heading next?
On Thursday, the S&P 500 was once again flirting with a 10% drop from its February record high, commonly known on Wall Street as a correction. The Nasdaq Composite, which has fallen 13.8% from its record in December, is already there.
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This Option Writing ETF Outperforms in Down Markets
Karrie Gordon - ETF Trends
Markets clawed back some of their recent losses on a better-than-expected February CPI print. However, concerns of longer-term tariff impacts on inflation and consumer resilience still weigh heavily. The Neuberger Berman Option Strategy ETF (NBOS) is a fund worth consideration for those advisors and investors with a neutral to bearish outlook for equities.
Inflation in February came in below expectations, rising 2.8% year-over-year on an expected 2.9% gain, reported WSJ. Core inflation (excludes food and energy) proved even better last month, rising 3.1% YoY on expectations of 3.2%. The gain is the smallest YoY rise in four years.
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| | | | | | Miscellaneous | | | The Dangers of Short Selling and Outlook for Stocks Now
Barron's (Video)
David "Tiger" Williams, founder and managing partner of Williams Trading, talks about the dynamics of trading today and how things have changed since he started decades ago.
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