| November 06, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | You will want to listen to the "Third Quarter 2023 Earnings Call" of the Cboe. Cboe knocked the ball out of the park during the quarter. The new CEO Fred Tomczyk offered his perspective, which included narrowing Cboe's focus. He is all on board with Cboe's strategy, but said he thinks there can be greater focus, and he wants to effectively allocate capital, develop talent and address management succession. Sounds like he wants to step on the gas a bit. Cboe's stock continues to rally post its change in leadership. MarketsMedia's Shanny Basar covered the earnings call in a story titled "New Cboe CEO to Refocus Strategy on Less M&A." ~JJL
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The Russell 2000 Index provides live index tracking data, with historical performance dating back to January 1984. Academic and practitioner research confirms that large-cap stocks behave differently to small-cap stocks and performance is variable. There are sub-periods during which the Russell 1000 outperforms the Russell 2000 and vice versa. Quarterly performance assessments provide valuable datapoints for understanding market sentiment and US economic activity. View the report: Russell 2000 Index Quarterly Chartbook - October 2023 | LSEG"
| | | | | | Lead Stories | | | War-Risk Premium in Oil's Options Markets Is Virtually Gone
Alex Longley and Devika Krishna Kumar - Bloomberg
Get The Brink for coverage of corporate distress, bankruptcies, financial meltdowns and turnaround stories, delivered Tuesdays and Saturdays.
In the oil market, the price of bullish call options is no longer higher than bearish puts, another sign of crude's fading war-risk premium.
Since shortly after the war between Israel and Hamas broke out, options had shown a rare call skew, where traders pay premiums for contracts that hedge against a surge in prices. But now, options protecting against lower crude prices are more expensive, as the conflict is yet to spill over into a wider regional confrontation.
/jlne.ws/3slGp4E
Call-Options Trading Surged During Recent Rally
Gunjan Banerji - The Wall Street Journal
Traders rushed to the options market to wager on stocks during the S&P 500's best week of the year.
/jlne.ws/3Spadba
Short-Selling Ban Sparks Biggest Rally in Korean Stocks Since 2020; Kospi surges 5.7%, boosted by shorted stocks like LG Energy; Ban 'unusual' in absence of a financial crisis: Eugene's Huh
Youkyung Lee - Bloomberg
South Korean stocks soared after the country reimposed a full ban on short-selling, a controversial move that regulators said was needed to stop the illegal use of a trading tactic deployed regularly by hedge funds and other investors around the world. The nearly eight-month ban may help appease retail investors who have complained about the impact of shorting - the selling of borrowed shares by institutional investors - ahead of elections in April, several market watchers said. However, it could deter participation by foreign funds in the $1.7 trillion equity market and complicate Korea's bid to seek a developed-market status in MSCI Inc.'s indexes.
/jlne.ws/3Sva4TI
****** Here is the Financial Times' version of the story. ~JJL
Short-Selling Debuts in the Philippines After a 27-Year Wait
Ian C Sayson - Bloomberg
After a nearly three-decade wait, traders will finally be able to short-sell stocks in the Philippines.
A total of 52 stocks and one exchange-traded fund, including all the equities on the benchmark gauge, will be available for short-selling on Monday after regulators signed off on a proposal first made by the Philippine Stock Exchange Inc. in 1996.
/jlne.ws/4775YWo
Hedge Funds Catapulted Treasury Shorts to Record at Wrong Time
Ruth Carson and David Finnerty - Bloomberg
Hedge funds extended short positions on Treasuries to a record just before smaller-than-expected US bond sales and weaker jobs data spurred a rally. Leveraged funds ramped up net short Treasury futures positions to the most in data going back to 2006, according to an aggregate of the latest Commodity Futures Trading Commission figures as of Oct. 31. The bets persisted even though the cash bonds had rallied the week before.
/jlne.ws/3Qpdcxz
'Stock-market correction is over' after broad surge amid 'epic' market rallies
Christine Idzelis - MarketWatch
The S&P 500's big jump amid last week's "epic rallies" for stocks and bonds was driven in part by interest-rate-sensitive sectors that broadened the breadth of the index's gains, putting it on course for a rally into year-end, according to Yardeni Research.
"All 11 sectors gained ground last week, many enjoying their best week in nearly a year," said Yardeni analysts led by the firm's president and chief investment strategist Ed Yardeni, in a note Monday. "We think the stock market's correction is over and that the S&P 500 is back on track to end the year at 4,600."
Viewpoint - Trends to watch in APAC derivatives markets
Walt Lukken, President and CEO - FIA
We're gearing up for another great FIA Asia conference later this month, and I'm excited to mark what will be my 13th year at this important gathering for the cleared derivatives industry.
Headlines from Europe and the US sometimes squeeze APAC issues out of the spotlight, but it's increasingly clear that this region is where the action is. Every time I attend our Asia conference, I am struck by just how much growth and innovation is happening in this region - and I expect this year will be no exception.
APAC derivatives markets are dynamic and complex. Heck, even the acronym itself is an oversimplification as issues differ greatly from China to Korea to India to Australia.
/jlne.ws/3FJUhZA
| | | | | | Exchanges | | | Cboe Global Markets Reports Trading Volume for October 2023
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today reported October monthly trading volume statistics across its global business lines. The data sheet "Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report" contains an overview of certain October trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
/jlne.ws/3MvK86t
Nasdaq October 2023 Volumes
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for October 2023 on its investor relations website. A data sheet showing this information can be found at: http://ir.nasdaq.com/financials/volume-statistics.
/jlne.ws/47gLUAp
TMX Group Consolidated Trading Statistics - October 2023
TMX Group Limited
TMX Group Limited today announced October 2023 trading statistics for its marketplaces - Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montreal Exchange.
/jlne.ws/3G6pgPP
FIA submits comments to SGX on proposed changes to Futures Trading Rules
FIA
FIA has responded to the Singapore Exchange's consultation on proposed changes to its Futures Trading Rules and other rulebooks. While FIA generally supports the proposed changes, it also makes some recommendations and raises concerns about several proposals.
FIA commends SGX for proposing to grant members the discretion to accept certain types of collateral from customers. However, FIA also recommends excluding instruments and associated currencies subject to restrictions from the list of eligible collateral as they could add complexity and uncertainty to margin funding.
/jlne.ws/3snzMic
OCC's Dallas Office Receives 2023 Best Place for Working Parents Designation
OCC
OCC is proud to share that in 2023, our Dallas office has earned the Best Place for Working Parents business designation for the third consecutive year in recognition of our family-friendly policies and practices. Fostering a culture of inclusion, belonging and trust inclusive for working parents and all colleagues is part of OCC's #WeAreOCC value and ensures OCC continues to attract, retain and develop talent with a wide range of backgrounds and perspectives.
/jlne.ws/3FHCxhx
| | | | | | Regulation & Enforcement | | | Citadel's Ken Griffin warns against hedge fund clampdown to curb basis trade risk; Founder of $62bn firm hits out at US proposals to treat big players in his industry like broker-dealer arms of banks
Costas Mourselas and Harriet Agnew - Financial Times
Ken Griffin, the founder and chief executive of $62bn US hedge fund Citadel, has warned regulators that they should focus their attention on banks rather than his industry if they want to reduce risks in the financial system stemming from leveraged bets on US government debt.
/jlne.ws/3QLmhSO
US Lays Path for More Financial Giants to Get Fed Oversight; Officials led by Janet Yellen describe bid to mitigate risk; The systemically important tag would mean stepped-up oversight
Viktoria Dendrinou and Katanga Johnson - Bloomberg
The US government laid out a pathway for placing firms other than banks under strict Federal Reserve oversight, a major regulatory threat to hedge funds and investment companies. After months of back-and-forth, Washington's top financial officials on Friday released a new framework for designating financial firms as systemically important. That too-big-to-fail tag, which brings significant compliance costs and regulatory headaches, has mostly been applied to large Wall Street banks since its introduction more than a decade ago.
/jlne.ws/47kIf4I
US Treasury Trading Under Regulatory Focus
Shanny Basar - Markets Media
The Securities and Exchange Commission has proposed an expansion of central clearing for US Treasuries, while a number of regulators have warned that Treasury basis trades may destabilise financial markets due to hedge funds building up leveraged short positions in US Treasury futures. US Treasury markets currently consist of transactions which are either bilaterally cleared or centrally cleared transactions though Fixed Income Clearing Corporation (FICC), part of US financial market infrastructure DTCC.
/jlne.ws/3QLvaf6
FIA speaks on capital, exchange volatility controls before CFTC committee
Jeff Reeves - FIA
FIA offered presentations before an advisory committee of the US Commodity Futures Trading Commission on 6 November, touching on best practices for exchange volatility controls and the potential impact of proposed capital reforms on derivatives clearing.
The CFTC's Global Markets Advisory Committee (GMAC), which is sponsored by Commissioner Caroline D. Pham, held a wide-ranging meeting that voted to approve eight various recommendations for submission to the Commission for consideration. CFTC advisory committees have no direct rulemaking authority, but allow a forum for public and private sector stakeholders to discuss important issues and trends.
/jlne.ws/47m133u
| | | | | | Technology | | | AI Pioneer Kai-Fu Lee Builds $1 Billion Startup in Eight Months; 01.AI's model outperforms Meta's Llama 2 on certain metrics; Startup to offer open-source model; proprietary options later
Saritha Rai and Peter Elstrom - Bloomberg
A Chinese startup founded by computer scientist Kai-Fu Lee has become a unicorn in less than eight months on the strength of a new open-source artificial-intelligence model that outstrips Silicon Valley's best, on at least certain metrics.
/jlne.ws/3seMfVw
| | | | | | Strategy | | | A short seller with a 95% win ratio shares 5 stocks he recently traded and why his strategy of finding cash-strapped companies to bet against is working better than ever
David Capablanca - Insider
In 2016, David Capablanca was on track to become an architect as he worked through earning a graduate degree from the University of California, Los Angeles. That year, he had also taken up an interest in stock trading. He began testing his skills in short selling, the process of borrowing a stock to sell and repurchase at a lower price to pocket the difference. During the first few years, he began by trading a couple hundred dollars at a time while he tested his skills and got a feel for the stock market.
/jlne.ws/49fpvFk
Bullish Momentum
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop shares that trading action on the $VIX and $SPX Indexes on Friday 11/3 indicated some bullish momentum, some of the most active #VIX options today are the 15-strike puts expiring Nov. 15, some notable economic data for this week include trade balance and consumer credit tomorrow, 11/7, and more.
/jlne.ws/3QMqULp
| | | | | | Miscellaneous | | | Journalism at hedge funds
Felix Salmon - Axios Markets
It's not often that a new journalistic business model comes along, but Hunterbrook wants to resuscitate one that has, until now, never really taken off: using hedge fund profits to pay for journalism that, in turn, generates trading ideas for the fund. Why it matters: It's very early days yet - Hunterbrook hasn't even launched - and there's certainly no guarantee of success. But the idea is intriguing.
/jlne.ws/3MrzbTq
****** There is a reason I stay away from price oriented news. ~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
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