| January 17, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | What Does the Low VIX Mean For Stocks?
Gunjan Banerji - WSJ
The VIX Is low right now. That may be bad news for the stock market.
The Cboe Volatility Index, or VIX, edged up in trading Tuesday after closing at its lowest level since January 2022 on Friday.
/jlne.ws/3Jd4Ver
Yen Traders Brace for Wildest Day Since Global Financial Crisis; FX pair's overnight implied volatility at highest since 2008; Traders are bracing for another potential shift in BOJ policy
David Finnerty - Bloomberg
The Bank of Japan's policy decision due Wednesday is shaping up to be the biggest risk for the dollar-yen pair since the global financial crisis, with traders betting on a possible swing of 2% or more in favor of either currency. The pair's overnight implied volatility jumped to the highest since November 2008 as traders positioned for another policy tweak following a surprise move in December. Since the BOJ raised the ceiling for its yield curve control program last month, traders have turned up the heat on the central bank by pushing the 10-year bond yield above its ceiling for three straight days.
/jlne.ws/3ZGdZy4
Sell-side clearing firms are rethinking margin processes in response to increased market volatility, finds new research; New survey produced by Acuiti found that more than 50% of respondents were calling clients for more intra-day margin.
Wesley Bray - The Trade
Sell-side clearing firms in the derivatives market are calling clients for margin intra-day and increasing treasury buffers due to greater margin costs resulting from volatility experienced last year, according to new findings from Acuiti. The survey, produced in partnership with margin optimisation provider Quantile, found that more than 50% of respondents were calling clients for more intra-day margin, with 64% of surveyed participants already using or planning to use optimisation solutions to manage margin costs.
/jlne.ws/3H8eVnE
Will Oil Continue To See Extreme Volatility?
Markets Insider
Last year saw some quite significant swings in oil prices, mostly driven by geopolitical events but also by China's zero-Covid policy. This year appears to signal calmer waters for the world's most traded commodities. On the surface.
In a recent poll across industries, Reuters' market columnist John Kemp found that the majority of respondents expected oil prices to average $90 per barrel in the period 2023 to 2027. He also said this year's forecast average for Brent was $87 per barrel.
/jlne.ws/3CUmqMe
Crossover Hedge Funds Lost Big in 2022. They're Still Launching in 2023.
Juliet Chung - WSJ
Hedge funds investing in fast-growing public and private companies lost tens of billions of clients' money last year. That isn't stopping more "crossover" funds from launching.
Mala Gaonkar, 53 years old, a former co-investment chief of Lone Pine Capital LLC, launched her New York-based crossover fund, SurgoCap Partners, on Jan. 3 with $1.8 billion, people familiar with her firm said. Ms. Gaonkar's launch was widely anticipated given her experience and marks the largest-ever startup from a female hedge-fund manager. Lone Pine, which Ms. Gaonkar left roughly a year ago, lost 36% in 2022 in its flagship hedge fund.
/jlne.ws/3koAcAD
| | | | | | Exchanges | | | CME Group to Launch Micro E-mini Nasdaq-100 and S&P 500 Monday, Tuesday, Wednesday and Thursday Weekly Options on February 13
CME Group
CME Group, the world's leading derivatives marketplace, today announced it will expand its suite of weekly options expiries for its Micro E-mini Nasdaq-100 and S&P 500 futures with the launch of Monday, Tuesday, Wednesday, and Thursday Weekly options on February 13, pending regulatory review. These new weekly options contracts will complement the existing Friday Weeklies, End-of-Month and Quarterly options on Micro E-mini Nasdaq-100 and S&P 500 futures.
/jlne.ws/3CXpCH5
Euronext to switch derivatives clearing to Italy in 2024
Huw Jones - Reuters
Pan-European stock exchange Euronext (ENX.PA) will shift clearing of derivatives trading to its new clearing arm in Italy by the third quarter of next year, it said on Monday, to compete directly with London Stock Exchange Group and Cboe. Euronext currently clears its derivatives transactions at LCH SA, owned by London Stock Exchange Group (LSEG) (LSEG.L), but wants to build up its own in-house clearing operation, in tune with European Union efforts to deepen the bloc's capital market after Brexit.
/jlne.ws/3GEBZJe
| | | | | | Strategy | | | How Vanna and Charm Effects Work
Cboe
You might have heard the old #trading adage "never short a dull market" â in today's #Vol411, Cem Karsan @jam_croissant explains how some second order Greeks, vanna & charm, play a role in proving out that phrase.
/jlne.ws/3GNmFKn
| | | | | | Miscellaneous | | | FIA mourns industry icon Nick Carew Hunt
FIA
FIA joins the industry in mourning the loss of Nick Carew Hunt, an integral part of London's futures community and the growth of the derivatives industry in both the U.K. and Europe. He passed away at the age of 71 on 15 January after a short illness.
The long-time Market Secretary of the London International Financial Futures and Options Exchange (LIFFE), Nick led the trading venue through numerous phases of growth and innovation including the Royal Exchange floor creation and the move to electronic futures trading. He was also an integral part of the organization's incorporation into Euronext and later the Intercontinental Exchange, where LIFFE was eventually rebranded as ICE Futures Europe.
/jlne.ws/3QM8n1a
Traders Can't Predict the Market. Maybe Their Faces Can.
Parmy Olson - Bloomberg
The saying goes that our eyes are the window to the soul. Perhaps over time they'll serve a less romantic purpose, as windows to making money.
Researchers at Carnegie Mellon University in Pittsburgh, one of the leading institutions for artificial-intelligence research, have embarked on a study using facial-recognition algorithms to track the expressions of traders. Their goal: finding correlations between mood swings and market swings. If the traders look enthusiastic, it might be time to buy. Are there more furrowed brows than usual? Could be time to sell. The provisional US patent application was filed on Sept. 13, 2022.
/jlne.ws/3CWPCCt
Why Goldman Sachs Is Far, Far Behind Morgan Stanley
Paul J. Davies - Bloomberg
Morgan Stanley is showing Goldman Sachs the way to go, but the latter has a lot of catching up to do.
Both banks reported 2022 results on Tuesday: Investors cheered one and jeered the other. Morgan Stanley's shares jumped more than 6% in morning trading while Goldman's dropped more than 7%.
/jlne.ws/3GPaxbD
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| | | Jeff Bergstrom
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