| July 08, 2016 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Knowledge Is Power: A MarketsWiki Education Journey
Doug Ashburn - JLN
"There is a lot of competition out there, but that is what our markets are all about. It is the essence of what we do. We innovate because of competition."
With those words, CME Group Chairman Emeritus Leo Melamed kicked off the inaugural MarketsWiki Education event in 2013. We have come a long way since then; the event has expanded its reach each year and in 2016 will visit five cities, beginning in Chicago July 12-15. For more information on the Chicago event, or to register, click HERE
The goal of the series is quite simple. We connect industry professionals with students and young professionals and give them the information that will inspire a career in this industry.
To read the rest of the story, click HERE.
***** We have added Justin Schack of Rosenblatt Securities to our lineup in New York for the series. For a full lineup of the July 19th New York event, click HERE.
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"Cannot be done": ISE's Gary Katz Tells The Inside Story Of The Biggest Disruptor To The Options Industry
Jim Kharouf - JLN
It's been quite a ride for almost 20 years for Gary Katz, now officially the former co-founder, president and CEO of the International Securities Exchange
Nasdaq closed the deal to buy ISE from Deutsche Boerse on June 30, ending one of the most pioneering and successful runs for an exchange in the history of financial markets. The exchange launched in 2000, but the road was bumpy, funny and frustrating, even on good days. But in five years, ISE went from being an interesting upstart to an exchange holding more than 30 percent of the US options volume. The truth is, it wasn't an easy five years, not to mention the years it took to develop and create the exchange.
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| | | | | | Lead Stories | | | Why Traders Have Lost Their Touch
Satyajit Das - Bloomberg View
Today's traders and portfolio managers -- self-described Masters of the Universe -- have hardly covered themselves in glory recently. Their surprise and initial panic at the Brexit result doesn't say much for the extraordinary foresight, skill at managing risk and large pay packages many of them claim. Truth is, whatever successes they've notched till now probably owed more to specific economic conditions than to their talent and brains.
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Lifted hedges leave credit and equity exposed for new woes
Dan Alderson - GlobalCapital
Credit and equity fund managers taking off hedges may have contributed to the resilience of these markets in the wake of the UK's EU referendum, according to derivatives traders, but a cocktail of calamities this week hinted at a precarious exposure to any further sudden moves. There was an air of complacency about credit and equity markets going into this week, said some trading officials at banks, after five days of positive trading. But a turn for the weaker, accompanied by a lack of options trading activity, suggested few are well hedged.
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Americas Will Continue to Dominate the Global Algorithmic Trading Market Until 2020, Says Technavio
Yahoo Finance
The global algorithmic trading market is expected grow at a CAGR of more than 10% during the forecast period, according to Technavio's latest report. In this report, Technavio covers the market outlook and growth prospects of the global algorithmic trading market for 2016-2020. To calculate the market size, the report considers the net commission earned from algorithmic trading platform providers in the Americas, APAC, and EMEA.
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June Was A Wild Month For Volatility Strategies
ValueWalk
Looking at its panoply of systematic volatility strategies in June, Barclays US Equity Derivatives Strategy research team notes winners and losers in what was an odd month for systematic price action. Going forward they make five volatility strategy recommendations but don't clearly identify their forward looking market environment thesis. That said, the recommendations point to an expectation for potential volatility in the EU relative to the US and somewhat contained near term price movement.
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Record in Sight Yet Again for S&P 500 After Erasing Brexit Drop
Joseph Ciolli and Dani Burger - Bloomberg
Strongest job gains since October give stocks another leg up
Banks, consumer shares lead rally amid optimism on economy
A week of evidence that the U.S. economy's ill health may have been overstated and dovish talk from the Federal Reserve is putting the possibility of stocks at an all-time high back on the table for American investors.
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Oil volatility index jumps as U.S. crude plunges
Reuters
Oil price volatility jumped to its highest level in more than four months on Thursday as U.S. crude plunged 5 percent, after data from the U.S. government showed inventories fell less than expected, disappointing market bulls worried about a glut of crude supply.
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OptionsHouse is now a Futures Commission Merchant!
OptionsHouse
Since the beginning, we've been dedicated to helping active traders succeed in trading stocks, options, and ETF's. As part of that mission, we've always strived to provide the best trading experience in not just options, but the whole gamut of trading and investing. Of course, we recognize the importance of futures trading for our customers too. That's why we're so excited to announce that OptionsHouse is now a non-clearing Futures Commission Merchant (FCM)!
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****SD: Check out our story on OptionsHouse's FCM.
Brexit flows help Thomson Reuters FX volumes hit 15-month high
Reuters
Average daily trading volumes on currency trading platforms run by Thomson Reuters jumped 14 percent in June to their highest since March 2015, the company said on Friday, helped by a surge in flows following Britain's shock vote to leave the European Union.
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| | | | | | Exchanges | | | Nasdaq Completes Acquisition of ISE Exchanges
Nasdaq
As of June 30th, Nasdaq completed its acquisition of the International Securities Exchange (ISE) from Deutsche Börse Group, including three electronic options exchanges - ISE, ISE Gemini and ISE Mercury, as well as PrecISE Trade, ETF Ventures and Longitude. The addition of ISE will improve efficiencies, expand technology & opportunities to innovate within the equity options industry.
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Global exchanges react to EU benchmark plan
Julie Aelbrecht - Futures & Options World
Esma released over 30 comment letters to its proposed benchmark reforms
The world's largest exchanges have expressed concerns over the new European Benchmark Regulation (BMR) in a series of comment letters released by the European Securities and Markets Authority. Several of the comment letters, including those of the Intercontinental Exchange (ICE) and Deutsche Boerse Group, highlighted concerns over the definition of an issuer of a financial instrument, objecting to the inclusion of exchanges and regulated markets.
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CME Raises Margins Again And Here Is What It Means For Gold Investors
Seeking Alpha
The CME just raised margins on gold and silver contracts. Raising margins makes it more expensive for speculators to keep their positions. Since most of this recent rally has been driven by paper market investors, we think the implications of this move are bearish for short-term gold prices.
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DB may try to move HQ post-merger - lawyers
Luke Jeffs - Futures & Options World
Exchanges have seen opposition to plan to have merged entity HQ in London
Deutsche Boerse may try to placate German opposition to its plan to move its group headquarters to London after merging with the London Stock Exchange with assurances the HQ may move back to Europe after the merger completes, lawyers have suggested. Deutsche Boerse and the LSE said in their offer document dated June 1 the merged group headquarters will be in London but this plan has been met with opposition by German regulators and politicians since the UK Brexit vote on June 23. This has left Deutsche Boerse in a difficult situation as LSE shareholders overwhelmingly endorsed the original merger plan, including the London-based headquarters, when 99.89% of shareholders backed the proposal on Monday.
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| | | | | | Regulation & Enforcement | | | Industry mauls ESMA over benchmark proposals
Hayley McDowell - The Trade
Industry heavyweights have savaged the European Securities and Markets Authority in their responses to the recent consultation on benchmarks regulation. Responses from trading venues, index providers, banks and trade groups lambasted ESMA for suggesting that commercial licensing agreements could be used to identify which financial instruments are referencing a benchmark.
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****SD: From FOW: Trade body WFE latest to slam leverage ratio
CFTC reaches too far on sweeping registration requirements and creation of a source code repository
Jason P. Gottlieb and Daniel C. Isaacs - Pensions&Investments
Financial regulators are continuing their push to modernize rules and regulations to accommodate the algorithmic trading that now dominates both securities and commodities futures markets. The Commodity Futures Trading Commission estimates between nearly 50% and 80% of trading volume on regulated derivatives markets is algorithmic.
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New FINRA Proposed Rule
Matthew R. Silver, Drinker Biddle & Reath LLP - Lexology
FINRA and the SEC have approved an amendment to NASD Rule 1032(f) (the "New Rule"), expanding the scope of individuals associated with a FINRA member broker-dealer who will be required to register as Security Traders as defined in the New Rule.
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Breaking: CySEC Fines OptionFair EUR138,000 on Multiple Counts
Victor Golovtchenko - Finance Magnates
The operator of binary options brokerage brand of TechFinancials, OptionFair has been fined by the Cyprus Securities and Exchange Commission (CySEC). The amount of the penalty against B.O. Tradefinancials Ltd is EUR 138,000. As stated by CySEC, the fine is related to multiple compliance issues.
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| | | | | | Strategy | | | Gold - Where's the Risk?
Russell Rhoads - CBOE Options Hub
I've kept my eye off gold this year and boy have I missed a ride. The GLD ETF is up about 28% in 2016 which leaves most markets in the dust. Apparently #Gold is a trending topic today on Twitter as well. S0 even though the shiny metal is higher, is there any opportunity being anticipated for the rest of 2016?
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Enhanced Risk-Adjusted Returns with BXMD Index - Blog #4 on 30-Year Price History
Matt Moran - CBOE Options Hub
Over the past thirty-year time period (ending June 30) the CBOE S&P 500 30-Delta BuyWrite Index (BXMD) rose 1955%, with higher returns and lower volatility than the S&P 500, MSCI EAFE, and S&P GSCI indexes. Note in the line chart below that the BXMD index (which writes out-of-the money (OTM) SPX options) generally had bigger upside moves during bull markets than the CBOE S&P 500 BuyWrite Index (BXM), (which writes at-the-money (ATM) SPX options).
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Managing Risk and Return with CLLZ and Zero-Cost Put Spread Collar - Blog #5 on 30-Year Price History
Russell Rhoads - CBOE Options Hub
In recent years I have heard from some money managers that the put-spread collar strategy is becoming more popular, and in 2015 CBOE introduced the CBOE S&P 500 Zero-Cost Put Spread Collar Index (CLLZ). The CLLZ Index now has more than 30 years of price history.
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The Importance of Sentiment and Timing
Celeste Taylor - Schaeffer's Research
Traders are always looking for an advantage, and staying ahead of the market curve is the best way to maximize profits. Here at Schaeffer's, one of the three tiers of our Expectational Analysis methodology is sentiment. Combined with fundamental and technical factors, sentiment can be a powerful tool for analyzing stocks, sectors, or the overall market. And, as contrarians already know -- and as we will demonstrate below -- there is often money to be made in going against the crowd, if you time it right.
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Earnings Next Week - 7/11 - 7/15
Russell Rhoads - CBOE Options Hub
Things start to get interesting as the early reporters give us results for the second quarter beginning next week.
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| | | | | | Miscellaneous | | | Frankfurt wants to steal London's place as Europe's financial centre
Business Insider
The German city of Frankfurt is pitching itself as the most attractive destination for financial institutions following the UK's vote to leave the European Union, as fears about the role of the City of London as Europe's financial hub continue to grow.
jlne.ws/29Cffh8
Taiwan, China batten down hatches as super typhoon approaches
Reuters
Taiwan and China began battening down the hatches on Thursday ahead of the arrival of super Typhoon Nepartak, the first of the year, with fears in China that storm could worsen already severe flooding in the east of the country.
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Exclusive: OptionRally Phone Support Offline, Major Restructuring on its Way
Victor Golovtchenko - Finance Magnates
One of the big binary options brokerages in Cyprus, OptionRally has suspended its 24-hour phone support services. The telephone support numbers of the company are not being picked up across the European Union. According to industry sources familiar with the matter, the company has laid off up to 120 employees.
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