| August 31, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | VIX Volatility Index Competitor MIAX's Spikes Futures to Stop Trading
Katherine Doherty - Bloomberg
The financial market's biggest and most prominent measure of fear could soon see its only competitor disappear.
After a federal judge last month sided with Cboe Global Markets Inc., trading in Spikes futures is set to stop in November. The product, offered by a unit of the Miami International Holdings Inc., also known as MIAX, is the only competitor to the Chicago exchange's Volatility Index.
/jlne.ws/47SHrVJ
The dangers of leveraged ETFs; The BoE is taking an interest
Robin Wigglesworth - Financial Times
Most ETFs are big, broad, boring and cheap beta. But there's now probably close to $200bn in leveraged and inverse ETFs, and their market impact is growing. Leveraged and inverse ETFs use derivatives and margin loans to either deliver extra juice to investors - say, three times the daily return of the underlying index - or the opposite of what the index does.
/jlne.ws/45xUvxZ
Little evidence that a spot bitcoin ETF would expand the market; BlackRock's application and Grayscale's court victory stirred the crypto world, but such investment vehicles look very vanilla
Stephen Foley - Financial Times
You don't have to want to invest in bitcoin to be in favour of US regulators giving their approval to a bitcoin exchange traded fund. You can disapprove of other people putting their money into the cryptocurrency but defend the idea that the Securities and Exchange Commission should let them. Perhaps not to the death - we don't need to go all Voltaire about this - but you get the idea.
/jlne.ws/44zzn9B
Grayscale (GBTC) Faces Fee War With BlackRock in Spot-Bitcoin (BTC) ETF Race
Katherine Greifeld and Vildana Hajric - Bloomberg
Fresh off a pivotal win in court this week, Grayscale Investments LLC may soon find itself in another fight: the $7.5 trillion US exchange-traded industry's never-ending contest over fees.
A ruling Tuesday overturned the Securities and Exchange Commission's decision to block Grayscale's bid to convert its $17 billion Bitcoin trust into a physically backed ETF. While the action potentially paves the way for the firm to attract a fresh wave of investors, there's just one thing: The product carries a 2% fee in its current form. That compares to an average of 0.54% across US-listed ETFs, and 1.48% for crypto exchange-traded products globally, Bloomberg Intelligence data show.
/jlne.ws/3szQ33n
Ultra-Short Bond ETFs See Inflows From Traders Seeking Haven From Volatility
Emily Graffeo - Bloomberg
Rising cross-asset volatility in August has sent investors piling into cash-like ETFs at the fastest clip in months.
Traders have poured $7 billion into ultra-short bond exchange-traded funds this month, according to data compiled by Bloomberg Intelligence. More than $2 billion of that went to the SPDR Bloomberg 1-3 Month T-Bill ETF (ticker BIL), reversing four months of outflows.
/jlne.ws/3P1RPlc
Growth of Same Day Expiry Options is "Unprecedented"
Shanny Basar - MarketsMedia
There has been "unprecedented" growth trading volumes of options that expire on the same day according to Cboe Global Markets as Eurex, the derivatives arm of Deutsche Börse, has also started listing daily options
Cboe said in paper, The Rise of SPX & 0DTE Options, that US options have seen significant growth in trading over the last few years, with volume in 2023 set to reach a record for the fourth year in a row. Total U.S. listed options volume increased at an annualized rate of 11% between 2000 to 2019, which increased to 24% between 2019 and 2023.
/jlne.ws/3Pjxfy2
Analysis: For traders, September's ECB move is far from clear cut
Yoruk Bahceli - Reuters
For the first time in over a year, traders are struggling to gauge whether the European Central Bank will raise interest rates at its next meeting, with the outlook blurred by still sticky inflation and a stuttering economy. Data on Thursday showed euro zone inflation held at 5.3% in August rather than dropping. A core measure excluding volatile food and energy prices dropped more than expected, to 5.3%, but remained far above the ECB's 2% target.
/jlne.ws/3R1qKBi
Is the August Stock Volatility Behind Us?
Gunjan Banerji - The Wall Street Journal
Traders are betting the August tumult in markets will keep ebbing. Stocks are rising, while various volatility measures are edging lower. The Cboe Volatility Index, or VIX, the widely watched "fear gauge" that is based on options prices tied to the S&P 500, is trading at a subdued level of less than 15. A second index known as the VVIX index reflects expectations of how volatile the VIX itself is likely to be in the near future. This gauge is hovering around the lowest levels since March, before Silicon Valley Bank collapsed.
/jlne.ws/3L0GVv1
| | | | | | Exchanges | | | Tradeweb completes Yieldbroker acquisition; The A$125 million acquisition broadens Tradeweb's Asia-Pacific footprint, further opening the door to Australia and New Zealand.
Claudia Preece - The Trade
Tradeweb Markets has closed its A$125 million acquisition of government bond and interest rate derivatives trading platform, Yieldbroker, following a regulatory review. Tradeweb entered into a definitive agreement to acquire Australia-based Yieldbroker in an all-cash transaction in May.
/jlne.ws/3R30wOW
CME Group Foundation Launches $2 Million Grantmaking Initiative to Support Mental Health of Young Women and Girls in Chicago
CME Group
CME Group Foundation today announced an initial $2 million in funding to expand its grantmaking program to support young women and girls impacted by trauma and violence in Chicago.
/jlne.ws/47Prek9
| | | | | | Technology | | | For AI to be a true game-changer in global finance, trust must be the key
Boon Chye Loh, CEO, SGX Group - FIA
It's been almost a year since ChatGPT broke into the world's collective consciousness.
The launch of OpenAI's artificial intelligence chatbot last year brought a wave of interest in generative AI, spurring optimism that the technology would revolutionize solutions to address humanity's greatest challenges - from healthcare disparity to economic inequality to climate change. With its ability to process vast amounts of data and identify patterns quickly, AI has emerged as a powerful tool for individuals and institutions alike.
/jlne.ws/47YhW5a
| | | | | | Moves | | | People news - August/September 2023
Katie Raymond - FIA
OCC, the US equity derivatives clearinghouse, has appointed Meaghan Dugan, the head of options at the New York Stock Exchange, to its board of directors. Dugan has over two decades of experience in listed options trading and market making. At the NYSE, she leads oversight of NYSE Amex Options and NYSE Arca Options markets and the team's overall business strategy. Prior to joining the NYSE, Dugan spent 11 years at Bank of America, most recently as the head of product for US electronic options and global future algorithms.
/jlne.ws/3YWQUY2
| | | | | | Strategy | | | SPX on a Winning Streak
Cboe (Video)
In #Vol411, Scott Bauer @cboesib lets us know that the $SPX Index has been positive for 4 days straight (the longest winning streak in over 6 weeks), also, the #SPX Index has not declined by 2% or more for 132 consecutive #trading days (the longest streak since 2016) and more.
/jlne.ws/45PJFDw
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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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