| October 13, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | John Lothian & JLN Staff
Options, options, options! With so much risk in the world, the limited risk of options appeals to many traders and investors. Today's lead story is "Options Are the Hottest Trade on Wall Street" with the subheading "Global trading in options has now overtaken futures volume."
Many times new products like crypto will bring new interest in markets and many new participants. However, as those participants' interests mature, they turn to more established products like equities, options and futures. Options are a fantastic product that can be used for investment, risk management, income generation, diversification, and are highly adaptable in terms of strategy. In certain cases there may be tax advantages too.
The proliferation of equity option exchanges gives multiple order execution possibilities and is so much more competitive than the era of a single listed venue trading a company's options.
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Mandy Xu, head of derivatives market intelligence at Cboe Global Markets, sat for a video about 0DTE options displayed on LinkedIn. ~JJL
| | | | | | Lead Stories | | | Wall Street's "fear gauge" surges as Middle East escalation rattles stocks
Joseph Adinolfi - MarketWatch
The Cboe Volatility Index VIX, +16.60%, better known as the Vix or Wall Street's "fear gauge," surged 20% on Friday to touch its highest level in more than a week, leaving it just shy of levels not seen since late May, according to FactSet data.
/jlne.ws/3QfvnH5
A contrarian take on short-selling bans
Robin Wigglesworth - Financial Times
We're generally pro-short selling around here â partly because being able to express both positive and negative views makes markets more efficient, partly because shorters are often interesting oddballs, and partly because many of their opponents are insufferable tools.
Another strong prior is that temporary short selling bans are dumb. They whiff of panic and classic "we must do something, this is something, ergo let's do this".
/jlne.ws/45A93fQ
Israel-Hamas War Impact Could Tip Global Economy Into Recession
Ziad Daoud, Galit Altstein, and Bhargavi Sakthivel - Bloomberg
Like Middle East wars of the past, the conflict between Israel and Hamas that broke out this past week has the potential to disrupt the world economy â and even tip it into recession if more countries are drawn in.
That risk is real, as Israel's army prepares to invade Gaza in response to an attack by the militant group. The death toll from the Hamas assault and the ongoing Israeli air strikes on Gaza is already in the thousands. There's concern that militias in Lebanon and Syria that support Hamas will join the fighting.
/jlne.ws/3ZUXaQs
BlackRock (BLK) Clients Pull $13 Billion From Long-Term Funds
Silla Brush - Bloomberg
BlackRock Inc. clients pulled a net $13 billion from long-term investment funds, the first outflows since the onset of the pandemic in 2020.
The redemptions are a sign that investors have preferred to keep cash on hand in money-market funds or in certain bond strategies while interest rates remain elevated.
/jlne.ws/3RY8byD
Bitcoin ETFs Face a Critical Deadline. What It Means for the Token.
Jack Denton - Barron's
and other cryptocurrencies were little changed Friday, remaining under pressure after a recent selloff wiped away most of the gains from the latest crypto rally. However, the tokens could be steadying with the brunt of the declines done.
/jlne.ws/48Qrccc
| | | | | | Exchanges | | | Uniswap-based 'perpetual options' protocol tests liquidity waters
Jack Kubinec - Blockworks
Panoptic is looking to create more options for those trading options.
Crypto options trading is so far mostly limited to Bitcoin and Ethereum contracts on centralized exchanges. Coinglass showed $493.15 million in open interest on the centralized exchange Deribit alone on Oct. 10, while DeFiLlama listed $21.23 million in options volume on decentralized exchanges as a whole the same day.
Today, Panoptic released the beta version of a trading platform for perpetual options â allowing users to trade options on any asset available on Uniswap v3.
/jlne.ws/45pTjvW
Equity Index Derivatives: Introduction of DAX Index EoD Options
Eurex
The Management Board of Eurex Deutschland took the following decision with effect from 13 November 2023: Introduction of DAX Index EoD Options (Product ID ODAP). Furthermore, the Executive Board of Eurex Frankfurt AG has decided the following with effect from 13 November 2023: Introduction of a Liquidity Provider Scheme for DAX Index EoD Options (Attachment 4)
/jlne.ws/4015deI
Marex offers choice in 'concentrated' Aussie futures market
Luke Jeffs - Global Investor Group
The London-based broker said has become the newest futures clearing and trading member of Sydney-based ASX which enables Marex to offer the full suite of futures and options services to Australian clients...
/jlne.ws/46N0qj7
| | | | | | Strategy | | | Hedge Funds to Get New SEC Rules for Short Sale Reporting
Lydia Beyoud - Bloomberg
Hedge funds will have to start sharing significantly more information about their short-sale transactions with the Securities and Exchange Commission, setting up another clash between the industry and Wall Street's main regulator.
The SEC finalized rules on Friday that require hedge funds and other big investors to report gross short positions in certain stocks at the end of each month, and details on related trading activity â including in derivatives â on a more regular basis. The agency would then aggregate positioning in equities across funds and publish that with a delay.
/jlne.ws/3rR2fwA
Market Momentum
Cboe (Video)
In #Vol411, Dan Deming covers the $VIX Index hitting weekly highs, flattening of the #VIX #futures term structure, state of realized volatility, big VIX options trades and previews a busy upcoming expiration week.
/jlne.ws/3FgE1Pr
| | | | | | Miscellaneous | | | Copy trading: a road to riches or risk? Following the portfolio choices of online 'experts' can lead to considerable losses
Martha Muir, Arjun Neil Alim and Rafe Uddin - Financial Times
Timo Nieminen, a 50-year-old from London, started financial trading six years ago and soon began mirroring other people's trades, in a practice known as copy trading. "At the start it was promising," Nieminen says. But then an equity trader, who Nieminen followed, abruptly abandoned his cautious strategy and opened up controversial short positions. "I emailed and asked [him], he said the market would turn around . . . People following his account started getting margin calls. He lost half of my account."
/jlne.ws/3Fe1S22
***** There are many reasons why this type of trading can be good or bad, but risk management and position sizing are really important. And that is normally up to the individual, not the person the investor is copying.~JJL
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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
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
| | | Asma Awass
Intern |
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Disclaimer: All John Lothian Newsletters, JohnLothianNews.com, MarketsWiki.com and MarketsReformWiki.com are products of John Lothian News, a division of John J. Lothian & Company, Inc. The opinions expressed in all John J. Lothian & Company, Inc. publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers. Futures and options trading involve risk. Past results are no indication of future performance. Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any website or newsletter content.
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