| August 16, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Zero-Day Options (0DTE) Fueled S&P 500 Stock Selloff, Goldman Sachs Says
Lu Wang - Bloomberg
Look closely at the contours of Tuesday's tumble in the S&P 500 and fingerprints of a new market force come into focus.
They're options tied to S&P 500 with a maturity less than 24 hours. A flurry of trading in the contracts known as zero days to expiration, or 0DTE, was the backdrop to a jarring acceleration of the day's decline, one in which the equity benchmark slid roughly 0.4% in 20 minutes, according to Goldman Sachs Group Inc.'s managing director Scott Rubner.
/jlne.ws/3DYECEJ
Yen Option Traders Unfazed by Risk of Intervention From Japan; Japan's Finance Minister watching FX with sense of urgency; Dollar-yen's option implied volatility remains near 2023 low
David Finnerty - Bloomberg
The yen may have slumped to within a whisker of levels that saw Japan intervene in the currency market last year, but options traders see little need to prepare for a jolt from authorities in Tokyo.
/jlne.ws/47x9N7H
Tencent Options Show Sudden Spike of Caution Ahead of Results
Jeanny Yu - Bloomberg
Investors are turning more wary on Tencent Holdings Ltd. hours before China's most valuable company reports quarterly results.
A put option betting the stock will drop 6% from now until the end of August is the one of the most popular contracts traded in Hong Kong on Wednesday. That marks a sharp contrast to just a day before, when three of the top ten most traded options in the city were bullish calls on the online gaming giant. Tencent's stock fell as much as 1.5% ahead of June quarter earnings due later in the day.
/jlne.ws/3P0vpSS
Bitcoin's Extreme Volatility Vanishes Amid 'Extreme Apathy and Exhaustion'; 90-day volatility at lowest since 2016, Bloomberg data show; Bitcoin has hovered around $29,000 throughout August
Vildana Hajric - Bloomberg
Ask anyone to name a typical characteristic exhibited by Bitcoin and they might mention that it's volatile. But it turns out that of late, the most popular digital token has been anything but.
Gauges that measure the price swings of the original cryptocurrency, which is trading at around $29,100, have been trending down â 90-day volatility is at its lowest since 2016, according to data compiled by Bloomberg.
/jlne.ws/3DWs4hh
Why 'Big Short' Burry's Bets Against S&P 500, Nasdaq Are No Surprise
Theron Mohamed - Markets Insider
Michael Burry disclosed sizable bets against the S&P 500 and Nasdaq-100 in his latest portfolio update. The wagers won't surprise his close followers.
Burry's Scion Asset Management held bearish put options on 200,000 shares of the SPDR S&P 500 ETF Trust â an exchange-traded fund that tracks the benchmark US stock index â at the end of June, a Securities and Exchange Commission filing showed on Monday.
/jlne.ws/3OYWLIM
S&P 500 Is Hugely Overvalued, Stock Market Tumble Is Likely: Rosenberg
Theron Mohamed - Markets Insider
Get ready for a repeat of last year's slump in stocks, as investors wake up to the mounting risks in markets today, David Rosenberg has warned.
The Rosenberg Research president pointed to deflation in China, the prospect of higher borrowing costs for the US government after Fitch downgraded the country's credit rating, and a looming credit crunch after Moody's cut the credit ratings of several US regional banks. He also singled out the resumption of student-loan payments in September as a likely drag on young Americans' future spending.
/jlne.ws/45cZqUU
Caroline Ellison caught on secret recording blaming Sam Bankman-Fried for FTX collapse: prosecutors
Ariel Zilber - NY Post
Caroline Ellison, the former girlfriend of disgraced FTX founder Sam Bankman-Fried, was secretly recorded as she blamed her ex for a fateful decision to use customer funds to plug financial holes in the crypto giant's failed hedge fund, according to court documents. The recording of Ellison, the former CEO of Alameda Research, the hedge fund through which Bankman-Fried allegedly used FTX customer funds to make risky bets, was made by an Alameda employee during an all-hands meeting on Nov. 9.
/jlne.ws/458iNib
World Economy Latest: Top Economists Lay Out Their Biggest Worries
Chris Anstey - Bloomberg
Whipping inflation has been the top economic priority for both the US Federal Reserve and Treasury Secretary Janet Yellen for some time now. But that's not the main worry emerging from an informal sound-taking of top economists by Bloomberg.
/jlne.ws/452XD4R
| | | | | | Exchanges | | | Coinbase (COIN) to Offer Crypto Derivatives Directly to Retail Users
Bloomberg
Coinbase Global Inc. has gained approval to sell cryptocurrency derivatives directly to retail consumers in the US.
Coinbase Financial Markets Inc., a subsidiary of the US's biggest crypto exchange, has secured approval from the National Futures Association to operate a Futures Commission Merchant and offer access to crypto futures. The offering will launch within weeks, according to a company spokesperson.
/jlne.ws/47CkPZc
Cboe Global Markets Appoints Mandy Xu as Vice President and Head of Derivatives Market Intelligence
Cboe via PRNewswire
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced Mandy Xu has joined the company as Vice President and Head of Derivatives Market Intelligence. In this role, Xu is planning to produce high-level insights and analysis on derivatives market themes and flows, with a focus on furthering client education on Cboe's markets and its leading suite of derivatives products.
/jlne.ws/445drTq
CME Group Realigns Foreign Exchange Businesses, Expanding Trading Opportunities and Efficiencies for Clients Across Futures, Cash and OTC Markets
CME Group
CME Group, the world's leading derivatives marketplace, today announced a realignment of its FX futures, options, cash and over-the-counter (OTC) FX businesses into a single unit led by Paul Houston, who has overseen CME Group's futures and options business for seven years.
Under the new structure, Houston will serve as Global Head of FX Products and will be responsible for the company's FX derivatives markets as well as its EBS cash markets business, leveraging a combined team to further improve client service, increase efficiencies and enhance product development across the entire FX marketplace. Jeff Ward, Global Head of EBS, will be leaving CME Group in September.
/jlne.ws/3KKwhbH
Meet Our Chief Human Resources Officer, Carla Dawson
OCC
"OCC has a strong team culture, and everyone here is committed to the important work we do for the financial markets. My colleagues inspire me because they're all highly knowledgeable, sophisticated and kind, and they drive me to work harder and think more creatively every day."
/jlne.ws/3OWwQ4u
2023 Interim Results, Interim Dividend And Closure Of Register Of Members (Incorporated In Hong Kong with limited liability) Stock Codes: 388 (HKD counter) and 80388 (RMB counter) (Financial figures in this announcement are expressed in Hong Kong dollar (HKD) unless otherwise stated)
HKEX
Strategic And Financial Highlights: Nicolas Aguzin, Chief Executive Officer said: A good half year for HKEX, despite continued global macro uncertainty and market fragility. Six-monthly Group revenue and other income was up 18 per cent, core business revenue was up 5 per cent and profit attributable to shareholders was up 31 per cent against the comparable period last year. This strong half-yearly and quarterly financial performance was matched by further significant strategic progress in Q2, including the launch of Swap Connect, the launch of our new Dual Counter Model and the opening of HKEX's first North American office. The Group also continued to benefit from the positive impact of its diversification, strategy, with robust growth in derivatives volumes, a strong performance from Stock Connect and good returns from a burgeoning ETF market.
/jlne.ws/45uNOwp
| | | | | | Strategy | | | DIY and Analysis: 100% Downside Protection with Upside Participation on the SPX
Joe Halpern, CEO, Exceed Investments - Cboe
What if I offered you 100% downside protection with significant upside potential in the S&P 500 Index? Depending on your personality, you may be skeptical or excited. A good portion will believe it is too good to be true or that there is a catch, but there really is not - though there is nuance!
Not only are these types of characteristics regularly offered in vehicles like structured notes and insurance products, now there is a new self-proclaimed "first ETF" to offer just this sort of investment [1]. This follows in the footsteps of other ETF products that have competed with buffered notes. This (structured note strategies) was a common approach used by banks, and the industry has evolved to include the strategy within variable indexed annuities, and now ETFs as well. And, like those initial buffered ETFs, this new 100% downside protection vehicle is garnering a lot of attention from both the press and investors.
/jlne.ws/45aWus5
Retail Sales Impact
Cboe (Video)
In #Vol411, @JoeTigay reminds us that the Fed minutes will be released at 2:00 pm EST today, lets us know that interest rate volatility is currently higher, retail sales data will move interest rates, and therefore the market, and more.
/jlne.ws/3E12FmG
| | | | | | Miscellaneous | | | Today's investors don't understand the impact of geopolitics; Having lived through a period of relative calm, we need to reassess how to generate long-term, sustainable returns
Saker Nusseibeh - Financial Times
There was a time when investors understood that geopolitics had a real impact on financial volatility and economies. During the cold war, international tensions played out via a blend of proxy wars and high-stakes diplomacy. As a young boy in East Jerusalem in the late sixties, I lived through one such proxy war in June 1967. That experience taught me that risk is not the same as volatility - the former carries the possibility of losing everything.
/jlne.ws/3DUzTnH
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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
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