| September 19, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Cboe CEO on 'integration fatigue' and what's next for the Chicago-based exchange
Mark Weinraub - Crain's Chicago Business
Market volatility and geopolitical uncertainty are driving more investors toward the United States as they look for the biggest market to hedge risk. The trend benefits the Chicago options exchange's most popular products: its VIX options, which track market volatility, and its S&P 500 index options contracts. "We have got two wars in the world," Tomczyk said. "We have got trade wars, elections and the rise of countries getting more divided. All that sets up for a more volatile market. The market here today has become much more news-driven, event-driven."
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***** Proactive profile piece by Cboe of its 69-year-old CEO who retired seven years ago before getting the Cboe job.
Cboe Global Markets Vice President, Global Head of Client Engagement, Data & Access Henry Schwartz shared on LinkedIn that "Over a million option contracts traded in the 2 minutes following today's half-point interest rate cut. Top ten symbols included SPX and broad-based ETFs SPY, QQQ, IWM, plus a few interesting names including China-ADR JD.com, SoFi technologies and the 3x levered short SQQQ ETF. Despite the rate-cut fueled afternoon rush, overall option volume today was 2% below recent average levels."
Cboe's Natan Tiefenbrun has been named as one of Financial News' Most Influential in European Finance 2024.
John Harwood will be the keynote speaker at Cboe's RMC in Snowbird, Utah, which runs from October 15 to 18. Harwood is the former White House correspondent for CNN and editor-at-large for CNBC. ~JJL
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  As financial firms navigate the transition to T+1 settlement, industry-wide collaboration and innovative solutions have played a key role in addressing operational bottlenecks. Rich Robinson, chairperson of ISITC, highlights how larger firms adapted quickly while smaller firms faced unique challenges with time zones and funding models. Improved same-day affirmation rates and increased automation helped smooth the transition, but Robinson emphasizes that human oversight and ongoing industry coordination remain essential for future developments.
In the shift to T+1 settlement, financial firms across the industry faced significant challenges and had to make substantial adaptations. According to Rich Robinson, chairperson of ISITC, a global industry trade group that focuses on improving operational efficiency and standards in the financial services sector, the most significant changes varied depending on the size and type of firm.
| | | | | | Lead Stories | | | Wall Street's $5.1 Trillion Triple-Witching Is Next Market Test; Index, single-stock and ETF options to expire on Friday; Expiry follows Fed rate cut, coincides with index rebalance
Jess Menton - Bloomberg
Just as Wall Street traders come to grips with the Federal Reserve's interest-rate cut, Friday's US options expiration threatens to whipsaw the market some more. The quarterly "triple-witching" will see some $5.1 trillion worth of options tied to individual stocks, indexes and exchange-traded funds fall off the board, according to an estimate from derivatives analytical firm Asym 500. While the risk is sometimes overblown by Wall Street players, the options event has a reputation for causing sudden price moves as contracts disappear and traders roll over their existing positions or start new ones.
/jlne.ws/4ekPSLU
CBOE Launches S&P 500 Variance Futures for Managing Market Volatility
Yesenia Duran - tastylive
Cboe Global Markets (CBOE) has announced its new Cboe S&P 500 Variance Futures (VA) will begin trading next Monday on the Cboe Futures Exchange (CFE).
The new Cboe S&P 500 Variance Futures are designed to offer market participants a robust tool for calculating the implied volatility of the U.S. equity market, as measured by the S&P 500 Index. These futures also provide a means to manage volatility risk and articulate directional market views.
Expected to attract a broad spectrum of investors, the Cboe S&P 500 Variance Futures cater to various investment goals.
/jlne.ws/3Zs6b5r
Market calm yields to stock surge as traders cheer Fed rate cut
Saqib Iqbal Ahmed, Suzanne McGee and Carolina Mandl - Reuters
An initial muted market reaction following the Federal Reserve's first rate cut in four years gave way to a surge in U.S. stocks as uncertainty ebbed and investors digested the implications of easing monetary policy.
The S&P 500 was up 1.9% on Thursday, hitting a fresh intraday high. The rally was a sharp contrast to the day before, when the benchmark index closed down 0.3% following a 50-basis-point rate cut from the Fed. Treasury yields, which move inversely to bond prices, continued to rise.
/jlne.ws/4gu2OAW
Brian Armstrong, ETF Experts Shoot Down 'Paper Bitcoin' Rumors
Helene Braun - CoinDesk
Rumors alleging Coinbase (COIN) was issuing bitcoin IOUs to BlackRock were quickly shut down by industry experts as well as Coinbase CEO Brian Armstrong on Monday. Over the weekend, well-followed X crypto analyst "Tyler Durden" accused Coinbase of allowing BlackRock - the issuer behind the largest spot bitcoin exchange-traded fund - to borrow bitcoin without providing collateral, which would allow manipulation of the market and profit from the resulting price swings
/jlne.ws/3MUwFVq
As Tokyo Extends Stock Trading Hours, Concerns Grow It Could Stoke Volatility; Trade volumes may not rise while liquidity could shrink; Lack of anti-gaming measures at closing auction raises worries
Hideyuki Sano - Bloomberg
Japanese equities may become more volatile after the Tokyo Stock Exchange extends its trading hours in November, with the risk that investors might be scared off as it comes on the heels of last month's market crash. The Japanese bourse will increase the equities trading hours by 30 minutes beginning Nov. 5, pushing back the cash market's close to 3:30 p.m. and lengthening the daily session to 5 1/2 hours. The exchange will also introduce a closing auction session to accommodate the increased trading volumes at the end of the day.
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| | | | | | Exchanges | | | CME Group SOFR Futures Reach New Volume and Open Interest Records
CME Group
CME Group, the world's leading derivatives marketplace, today announced that its deeply liquid SOFR futures reached a new, all-time record average daily volume (ADV) of 5.4 million contracts in September and an open interest record of 13,159,646 contracts on September 17. Additionally, SOFR futures now have a record 1,144 large open interest holders (LOIH), based on the CFTC's latest Commitments of Traders report.
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| | | | | | Regulation & Enforcement | | | SEC cuts tick size for stock market trades to a half penny; Regulator softens complex initial proposal after industry pushback
Jennifer Hughes - Financial Times
US regulators dumped long-standing penny limits on share trading prices and cut the fees exchanges can charge their users in new equity market rules that nonetheless ended far short of more radical initial plans. Wednesday's changes are the second piece of a broader four-part shake-up of US stock trading first proposed in December 2022 by the Securities and Exchange Commission. Combined, the plans represent the biggest changes to the stock market's structure in 20 years. They have been one key element in the ambitious reform agenda pursued by SEC chair Gary Gensler.
/jlne.ws/3BdErHB
Hong Kong regulator relaxes rules on sharing China ETF research; Uptake of funds sold via ETF Connect has been hindered by strict interpretation of rules preventing promotion
John Sedgwick - Financial Times
Hong Kong's securities regulator has relaxed rules on the sharing of research with investors on mainland China-listed exchange traded funds that can be accessed by local investors via the Stock Connect schemes. The Hong Kong-China ETF Connect was launched in July 2022 to provide investors with mutual access to eligible ETFs on mainland China and Hong Kong exchanges. But uptake has been hindered by strict regulations preventing fund firms from promoting their ETFs in the cross-border jurisdiction and restricting distributors from offering ETF product information to investors.
/jlne.ws/4gyX7BF
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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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Editor-in-Chief
| | | Jeff Bergstrom
Editor
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