| March 13, 2017 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Wall Street Has Found Its Next Big Short in U.S. Credit Market
Rachel Evans and Matt Scully - Bloomberg
Wall Street speculators are zeroing in on the next U.S. credit crisis: the mall.
It's no secret many mall complexes have been struggling for years as Americans do more of their shopping online. But now, they're catching the eye of hedge-fund types who think some may soon buckle under their debts, much the way many homeowners did nearly a decade ago.
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***JB: Is "big short" like "jumbo shrimp"?
US equity 'fear barometer' hits highest level since after the election
Adam Samson - Financial Times
A measure of skittishness in the US stock market has climbed to the highest level since the aftermath of the presidential election, even as equities have charted a mostly smooth path to fresh all-time highs in recent weeks.
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***JB: Some stories below wonder where the fear is.
Why is the Binary Options Industry not Fighting Back?
Finance Magnates
The binary options and forex industries in Israel might suffer a death blow due to the major brands preferring to avoid a fight and relocate their base of operations, thereby increasing and perpetuating the problems. The problems will not disappear in Moldova. The blows will come even to those who switch to CFD or Lotto. They need to fight.
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Despite Eerie Calm, Stocks Are Where They Should Be in the Rate Cycle
Lu Wang - Bloomberg
The alarm bells over potential bouts of stock volatility surrounding the Federal Reserve's anticipated interest rate hike this week may be misplaced.
The current tranquility in U.S. equities is unprecedented by some measures, but it's in line with Fed tightenings since the early 1990s, where the S&P 500 Index has shown growing stability about half way into a cycle, according to a research report on March 8 from Bank of America Corp. rates strategists led by Carol Zhang and Vadim Iaralov.
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What upheaval? Global uncertainty lost on investors
Saumya Vaishampayan - WSJ (via The Australian)
If the world seems particularly Âunpredictable these days, no one appears to have told investors.
From the uncertainties around US President Donald Trump's policies to the sudden belief the Federal Reserve will raise interest rates this month, there are plenty of unsettling factors in the US. Other reasons to fret include France's close presidential election and heightened instability around North Korea.
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The Impact of Low Volatility
Bob Lang CBOE Options Hub
The volatility index, or VIX once again closed under 12% last Friday. It has hovered in the range of 10-13% for the entire year of 2017, and really collapsed following the Presidential election, from a high in the low twenties. That seems eons ago, right? And with this low volatility comes frustration for those sitting on the sidelines waiting to get involved with the stock market. Volatility is compressed right now, but of course that will change at some point, but we'll not try and time it.
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Which Is Scarier - The 8-Year Bull Market Birthday Or The 10-Year Low VIX Reading?
Seeking Alpha
Do you know who isn't worried about a market collapse these days? As far as I can tell it is almost everyone!
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Prepare for a volatility spike, expert warns
Alex Rosenberg - CNBC
The ultra-low levels of expected and experienced volatility are unlikely to last, warns UBS equity and derivatives strategist Julian Emanuel.
"Overall market risks appear to be rising, yet volatility is low," Emanuel observed in a Friday research note.
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The Ides of March could be a critical turning point for the stock market
Sue Chang - MarketWatch
As much as Julius Caesar's assassination on the Ides of March signaled an inflection point in Roman history, March 15 may also mark a watershed moment for the U.S. stock market with the Federal Reserve poised to seek closure to its loose monetary policy regime.
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How Trump's stock market ranks in his first 50 days in office
Mark DeCambre - MarketWatch
President Donald Trump is half way to marking his first 100 days in office, and as it turns out the so-called Trump rally is stacking up fairly well compared with past presidents during their midpoint to 100. Trump hits the 50-day milestone on Saturday.
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Oil price's plunge sends options trading into a frenzy
The Economic Times India
Oil's plunge through $50 a barrel set the options market on fire. A record number of options contracts - equivalent to more than 800 million barrels of crude oil - changed hands on Thursday, according to exchange data compiled by Bloomberg.
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| | | | | | Exchanges and Clearing | | | DERIVATIVES-Eurex-listed equity swaps get US approval
Helen Bartholomew - Reuters
The CFTC has given the green light for US investors to trade Total Return Futures linked to the EuroStoxx 50 - a move that could prove pivotal in building liquidity and cementing the Eurex-listed contracts as a viable alternative to over-the-counter equity swaps.
The instruments have already made their mark in Europe with more than 83,000 contracts traded since the December launch, representing EUR2.8bn notional. Volume has more than doubled in the last month as new users jumped on board, extending the market beyond the bank hedging activity that initially dominated trading.
jlne.ws/2mk2fhx
Euribor smashes volume records
Futures & Options World - Let's Talk Derivatives
Volumes in ICE Futures Europe's Euribor futures soared last week with the short term interest rate contract posting a record daily volume.
Euribor futures traded over 3.2 million times on Thursday following a less dovish press conference from the European Central Bank (ECB) and reports that the committee had discussed raising interest rates before the end of the Quantitative Easing (QE) programme.
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| | | | | | Regulation & Enforcement | | | Spoofing, Cross-Selling and Bitcoin ETFs
Matt Levine - Bloomberg
Here's how layering, or spoofing, works:
Layering trading is a special trading stratyge [sic]. For example, the bid and ask of symbol X is 90.09 and 90.14, we put buy orders in 90.10, 90.11, 90.12, 90.13 and so on, then push the price to 90.20, right now the bid and ask is 90.20 and 90.21, we put a big size short order in 90.20 to get a short position, then we cancel all of the buy orders in 90.10, 90.11, 90.12 and so on. And we put sell orders in 90.20, 90.19, 90.18, 90.17 and so on, to push the price to 90.05, then put a big size buy order in 90.05 to cover position, and cancel all of the sell orders .. so we will put hundre[d]s of orders to push stock price and then cancel them.
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World Federation of Exchanges responds to FSB's consultative document on CCP Resolution & Resolution Planning
Press Release - World Federation of Exchanges
The World Federation of Exchanges ("WFE"), which represents more than 200 market infrastructure providers including exchanges and CCPs, has responded to a consultative document from the Financial Stability Board ("FSB") related to CCP Resolution & Resolution Planning.
As outlined in previous responses to the FSB on the broader topic of CCP Recovery & Resolution*, the WFE maintains its position that recovery must be given every opportunity to succeed before resolution proceedings are invoked.
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| | | | | | Technology | | | Nasdaq and CloudMargin Join Forces to Help Buy-Side Institutions Manage Cleared and Non-Cleared Derivatives Collateral
Press Release - CloudMargin
CloudMargin, the multi-award winning creator of the world's first web-based collateral and margin management solution, today announced that Nasdaq Clearing has been included into the CloudMargin platform. This will provide Nasdaq Clearing's clients with a seamless collateral management solution for collateralising cleared derivatives products. Under the arrangement, CloudMargin and Nasdaq Clearing are establishing interoperability that will significantly enhance and streamline Nasdaq Clearing's collateral-related communications, including issuance of the most up-to-date eligibility schedules, reports, messages and instructions.
jlne.ws/2mjKMpA
Trading Platform Level Playing Field
Press Release - Rival Systems
Rival Systems (Rival), an award-winning provider of trading and risk management software, and Algo-Logic Systems, a leading FPGA ultra-low latency trading solutions provider, announced today that they have teamed up to develop an integrated offering using Algo-Logic's FPGA hardware and Rival's trading and algorithmic strategy development software. The complete tick-to-trade "out-of-the-box" solution for futures and options enables traders and firms of all sizes to capture the sub-microsecond latency and deterministic performance that typically only the largest trading firms with expensive internal infrastructures have enjoyed.
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