 | | | | | | | | February 12, 2025 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |  Bob Pisani: Veteran CNBC Journalist Reflects on Electronic Trading, Investor Biases JohnLothianNews.com In part two of a wide-ranging interview with John Lothian News, veteran trader Bob Pisani of CNBC reflected on the dramatic changes he's witnessed in the financial markets over his decades-long career, highlighting the impact of technology, behavioral finance, and the challenge of market prediction. Pisani, who has covered the markets for CNBC since 1990, pointed to electronic trading as one of the most significant advancements. "Electronic trading destroyed that business, what we call the open outcry model," Pisani said, recalling the bustling trading floors of the past. "It was a more efficient way of transacting. It dramatically increased trading volumes." He also cited decimalization, the move to trading in pennies, as another key development that "dramatically reduced the cost of trading." Watch the video »
| | | | | | Lead Stories | | | Why the options market is hotter than ever and could be on track for more records; Activity hit a new monthly record in January, setting the stage for 2025 to be a sixth-straight record year
Joseph Adinolfi - MarketWatch
Options trading volume hit a fresh record in January as nearly 1.2 billion contracts changed hands, according to data from Cboe Global Markets.
Such a strong start to 2025 could set the stage for a sixth straight year of record activity in the U.S. equity options market, a representative from Cboe said. The exchange estimated that between 13 billion and 14 billion contracts could trade this year, compared with nearly 12.3 billion in 2024.
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India's crackdown on derivatives frenzy to hit online brokers; Intervention to curb options trading has brought down volumes by 70%
Krishn Kaushik in Mumbai - Financial Times
Indian online brokerages face a hefty hit to their revenues, say industry executives, after the regulator intervened to curb retail investors' frenzied trading of risky derivatives markets. The Securities and Exchange Board of India (Sebi) became concerned last year about millions of young Indians gambling in the derivatives markets to try to quickly profit from the country's soaring stock market. With nine out of 10 losing money, it unveiled plans to raise barriers to trading and temporarily ban some prominent "finfluencers" that young people looked up to for financial advice.
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Traditional index trackers shunned in January; US ETF flows Old-school passive vehicles grabbed less than 25% of new money, losing out to active rivals
Steve Johnson - Financial Times
Traditional index-tracking exchange traded funds bagged less than a quarter of the new money flooding into US-listed domestic equity ETFs in January, according to data from Citi. The flows may be a sign that the traditional low-cost passive bedrock of the ETF world is being challenged by the combined forces of actively managed ETFs, derivatives-heavy products that seek to limit risk, factor-based "smart beta" ETFs and sector funds.
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'Cost and chaos': Donald Trump's metal tariffs sweep across corporate America; Executives grapple with uncertainty and price volatility even before levies come into effect
Claire Bushey in Chicago and Amanda Chu and Gregory Meyer in New York - Financial Times
Donald Trump's threat to impose big tariffs on steel and aluminium is rippling across US industry, with companies ranging from manufacturers to oil and gas drillers facing increasing costs for the metals. Many executives are rushing to find ways to mitigate the political tumult and fallout from rising prices, even though the 25 per cent tariffs will not come into effect for another month. "So far what we're seeing is a lot of cost and a lot of chaos," said Ford chief Jim Farley at an automotive conference on Tuesday.
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El-Erian Sees Fed Holding Rates for Longer Than Markets Expect; El-Erian blasts central bank for overreacting to economic data; Fed should raise rates if committed to 2% inflation target
Unmute; There Is No Meaningful Forward Policy Guidance From Fed, El-Erian Says
Ye Xie - Bloomberg
The Federal Reserve is set to refrain from cutting interest rates for "quite a while," following a hotter-than-expected inflation report, according to Mohamed El-Erian.
The Fed, in theory, should be raising rates now, if it's truly committed to the 2% inflation target, El-Erian, president of Queens' College, Cambridge and a Bloomberg Opinion columnist, said in an interview on Bloomberg Television Wednesday. But it's more likely that the central bank will hold rates, tolerating higher inflation to protect economic growth and US exceptionalism, he added.
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| | | | | | Exchanges | | | The New York Stock Exchange to Launch NYSE Texas
Intercontinental Exchange
The New York Stock Exchange, part of Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced plans to launch NYSE Texas, a fully electronic equities exchange, headquartered in Dallas, Texas. Pending the effectiveness of regulatory filings, NYSE Chicago will reincorporate in Texas and be renamed NYSE Texas, offering companies the opportunity to list their securities on NYSE Texas. "As the state with the largest number of NYSE listings, representing over $3.7 trillion in market value for our community, Texas is a market leader in fostering a pro-business atmosphere," said Lynn Martin, President, NYSE Group. "We are delighted to expand our presence in the Lone Star State, which plays a key role in driving our U.S. economy forward." Building on the NYSE's 230 years of experience as the world's leading exchange operator, the launch of NYSE Texas will provide public companies with a listing and trading venue centered within the vibrant economy of the southwestern U.S.
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IEX Grows Displayed Market Share
Shanny Basar - MarketsMedia
Equities exchange IEX has tripled its displayed market share since June 2024 after introducing new pricing tiers, but said it has maintained market quality.
Bryan Harkins, president of IEX Group, told Markets Media: "We are particularly proud of our displayed market share as market quality has not been sacrificed for growth. On the contrary, our displayed growth has improved the performance of our dark venue."
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CME Group Inc. Reports All-Time Record Annual Revenue, Adjusted Operating Income, Adjusted Net Income and Adjusted Earnings Per Share for 2024
CME Group
CME Group Inc. (NASDAQ: CME) today reported financial results for the fourth quarter and full year of 2024.
The company reported revenue of $1.5 billion and operating income of $947 million for the fourth quarter of 2024. Net income was $875 million and diluted earnings per common share were $2.40. On an adjusted basis, net income was $919 million and diluted earnings per common share were $2.52. Financial results presented on an adjusted basis for the fourth quarter of 2024 and 2023 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1
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Kicking off 2025 with strong equity and options volume; Strong Volume in January; One-Cent Tick Size Hurts Exchange Competitiveness
MEMX
Highlights & Recent Developments
In January, consolidated industry volume increased by 34% year-over-year to 15.4 billion average daily shares. Higher retail activity in sub-$1 stocks and pre-market activity contributed to volume growth. Sub-$1 activity accounted for 17.0% of industry volume in January 2025, compared to 14.5% in January 2024. Additionally, pre-market activity increased to 6.2% of industry volume, up from 3.5% in January 2024.
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Cboe Global Markets Declares First-Quarter 2025 Dividend
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced its Board of Directors has declared a quarterly cash dividend of $0.63 per share of common stock for the first quarter of 2025. The first-quarter 2025 dividend is payable on March 14, 2025, to stockholders of record as of February 28, 2025.
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Important Updates to CME CORE Web-based User Interface - Effective February 13, 2025
CME Group
CME is pleased to announce enhancements to CME CORE, CME's interactive margin calculator tool. Enhancements are being made to the "Margin Calculator" ââ ' "Rates" page including UI workflow improvements for interest rate swaps and related interest rate futures and options in margin or optimization analysis. A minor but required change is also scope for the test environment direct URL. All enhancements can be tested from February 13 in the test environment and are described below in more det
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Deutsche Borse ends financial year 2024 with strong organic growth and announces new share buyback program
Deutsche Borse Group
Deutsche Borse Group has just published its preliminary financial results for 2024. Please scroll down for the link to the entire report.
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Nasdaq Announces End-of-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date January 31, 2025
NASDAQ
At the end of the settlement date of January 31, 2025, short interest in 3,109 Nasdaq Global Market securities totaled 12,170,722,591 shares compared with 12,402,417,655 shares in 3,099 Global Market issues reported for the prior settlement date of January 15, 2025. The mid-January short interest represents 2.69 days compared with 2.56 days for the prior reporting period. Short interest in 1,621 securities on The Nasdaq Capital Market totaled 2,410,655,463 shares at the end of the settlement date of January 31, 2025, compared with 2,424,890,788 shares in 1,635 securities for the previous reporting period. This represents a 1.00 day average daily volume; the previous reporting period's figure was 1.00.
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SIX Launches New Service to Transform Crypto Collateral Management
SIX via BME-X
SIX launched the new Digital Collateral Service (DCS) today, permitting financial institutions to post selected cryptocurrency assets as collateral alongside traditional collateral. The new product offers a solution through which clients can manage traditional securities and cryptocurrency collateral. Firms managing both bonds and bitcoin, for example, can now post both as collateral to cover a single exposure. This will simplify operations for traders and their counterparts significantly, enhancing portfolio management efficiency and minimizing counterparty risk. SIX has developed this service by combining and leveraging expertise from different areas in its international custody business and SDX.
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| | | | | | Technology | | | Intercontinental Exchange and Reddit Collaborate to Create and Distribute Data Products for Capital Markets
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, and Reddit, Inc., a community of communities, today announced an agreement for Intercontinental Exchange to leverage Reddit's Data API to research, create and distribute new data and analytics products for the financial industry. The products will leverage Intercontinental Exchange's extensive data science expertise and the vast data available through Reddit's Data API to offer innovative datasets and analytics to participants in capital markets. "The conversations that take place on Reddit on any given day or any given minute can offer a real-time look at the news and trends that are happening around the world," said Jonathan Flesher, VP Business Development and Partnerships, Reddit. "These conversations could be a valuable tool for commercial partners such as ICE to offer new products to their customers to help improve and inform trading strategies or algorithms, or understand public sentiment of markets as they are happening in real time."
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| | | | | | Strategy | | | The Markets Trust Trump. How to Trade It.
Steven M. Sears - Barron's
The stock market appears to have entered a Trust in Trump phase on Super Bowl Sunday. Rather than opening lower Monday after President Trump surprisingly revealed steel tariffs en route to the game, investors shrugged it off and stocks rallied.
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Tesla Unwind Gives Options Traders a Way to Hedge Market Selloff; Stock is down about 32% since touching record in mid-December; Buy Tesla put spreads as more selling on the way: Tallbacken
Esha Dey - Bloomberg
As a post-election rally in the shares of electric-vehicle maker Tesla Inc. rapidly unwinds, some market watchers are spotting a lucrative trading opportunity.
The premise is simple. Despite the recent rout, Tesla shares are still the most expensive next to expected profits among mega-cap technology firms, suggesting further room for a potential downside. Moreover, the stock has unmoored from the fundamentals of the car business after soaring on hopes President Donald Trump's return to the White House and Elon Musk's newfound political prominence will ease the way for Tesla's ambition for creating a fully self-driving vehicle.
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Traders' Bets on Higher US Rates Face Crucial Inflation Data; Jobs data spurred gains in open interest, signaling new shorts; CPI will provide first test for newly established positions
Edward Bolingbroke - Bloomberg
Traders who have been piling into wagers for higher US yields ever since last week's jobs report will see their convictions tested with the latest inflation readings.
Treasury yields remained higher on Wednesday after steadily climbing in the wake of data Friday, which revealed a healthy labor market and faster-than-expected earnings growth in January. The figures, which included upward revisions to the prior two months, support the argument for the Federal Reserve to go slow on further interest-rate cuts.
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| | | | | | Education | | | Skinny on Options Math
tastylive (Video)
Options pricing models all revolve around probability theory. Though the math is done for you by your trading platform, we believe that understanding the number crunching behind the scenes will jump-start your trading. Join us as we show you how it's done.
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| | | | | | Miscellaneous | | | Anatomy of a deal: What goes into a $50 million hedge fund portfolio manager hire
Alex Morrell - Business Insider
Has it ever been more expensive to hire a hedge fund portfolio manager?
Amid the war for talent among multimanager investment firms, sign-on bonuses have grabbed headlines as they've stretched into the tens of millions of dollars. Deals north of $10 million are now commonplace, according to hedge fund recruiters, and the superstars can land contracts that are many multiples larger, with bidding wars engorging deal prices.
In late January, it was Marshall Wace long-short equities PM Kevin Liu securing a $50 million bag to join Point72, Bloomberg reported. Peter Goodwin started his own equities unit at Balyasny in September, and his haul was said to be closer to $80 million. Other examples now abound.
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