| | | | | | | February 13, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Maurice Conti, a pioneer in emerging technologies, will be the keynote speaker at The Options Industry Conference 2025. A leading expert in AI, immersive reality, robotics, and sustainability, Conti blends hands-on expertise with big-picture vision. He advises top global companies, including Amazon Web Services, Lululemon, and Mercedes AMG, on leveraging AI for human-centered innovation. With a focus on disruptive technology, future cities, and climate solutions, Conti champions the development of purpose-driven advancements that shape the world for the better.
The Options Industry Conference, taking place May 6-8, 2025 in Palm Beach Gardens, FL, will feature an interesting lineup of moderators, each bringing extensive industry expertise and leadership. Henry Schwartz, VP of market intelligence at Cboe Global Markets, is a seasoned derivatives expert and the founder of Trade Alert, a market data company later acquired by Cboe. With a deep background in market analytics and innovation, Schwartz provides valuable insights into trading trends. JJ Kinahan, CEO of IG North America, oversees tastylive, tastytrade, and IG FX, focusing on scaling technology and content-driven trading solutions to enhance the investor experience. His expertise in trading education and engagement makes him a key voice in shaping market accessibility. Ivan Brown, COO of IEX Options, brings vast experience in options markets, business development, and regulatory strategy. Previously, as head of options & business development at NYSE, he led product development, trading operations, and revenue growth strategies.
For the non-golfers at The Options Industry Conference, there is a pickleball tournament. Personally, I will be nursing a virgin margarita at the pool after shooting our JLN Industry Leader series interviews. ~JJL
| | | | | | Lead Stories | | | 3x ETFs and zero-day options: Is the asset management industry becoming more predatory?
William Edwards - Business Insider
Late in the summer of 2023, Rob turned $2,500 into more than $18,000 in a matter of weeks.
He said he did it by trading zero-day put options on ETFs tracking the S&P 500 and Nasdaq 100 indexes. By buying the options, Rob was essentially betting that the market would fall before the close of trading, causing the options' value to increase and allowing him to sell them for a profit.
For a time, it worked with remarkable success. Then, his money quickly evaporated.
/jlne.ws/41efHJF
Indonesia to Allow Short-Selling to Broaden Stock Market Appeal; Benchmark index is nearing bear market from September high; IDX wants to offer options during 'dynamic market conditions'
Norman Harsono - Bloomberg
Indonesia plans to introduce short-selling in the second quarter this year, to increase options for investors at a time when the benchmark exchange sits just above bear-market levels. The local stock exchange, known as IDX, will allow domestic retail investors to short-sell 10 stocks including PT Bank Central Asia and PT Telkom Indonesia, said IDX development director Jeffrey Hendrik on Tuesday. More stocks and investor types will be included over the year, he added.
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Investors rush to protect against Wall Street 'volatility spikes'; US stocks have risen this year, but traders are hedging against big swings induced by Trump's erratic policymaking
George Steer in New York - Financial Times
Traders are piling into strategies that protect their share portfolios against "volatility spikes", underscoring how concerns over US President Donald Trump's policies have left investors on edge despite an upbeat start to the year for equities. Investors have turned to derivatives markets to protect against large swings in US equities even as measures of Wall Street volatility remain subdued and stocks have crept modestly higher since last year. The move to hedge against low-probability but high-impact shocks - known as "tail risks" - highlights how Trump's erratic shifts in trade and economic policies have left investors uneasy even if many are still betting that the new administration will be a boon to corporate America.
/jlne.ws/4gDEUBU
Wall Street Fear Index Still Signaling Calm After CPI Inflation Report
George Glover - Barron's
Wall Street's best-known gauge of fear and uncertainty was still indicating low volatility on Thursday, even after a higher-than-expected inflation reading appeared to slam the door on the Federal Reserve being able to cut interest rates by much in 2025.
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ETF industry braces for winds of change under Donald Trump; The temptation to move beyond traditional buy-and-hold vehicles is likely to increase, industry observers say
Emma Boyde - Financial Times
The exchange traded fund industry blasted through previous records last year, racking up $1.5tn in inflows, 95 per cent of which went into equity and fixed-income funds, but 2025 could look very different, industry observers say. With threats of tariffs and potential trade wars, and rapid changes to the geopolitical situation, nerves are being stretched tight and the appeal of moving beyond traditional buy-and-hold portfolio building blocks is likely to grow, industry figures say, even if that appeal is misguided.
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Record Stock 'Fragility' Sends Warning to Broader Market; Instability in S&P 500 megacaps soars to most in 30-plus years; DeepSeek selloff sees clusters of swings as in dot-com era
Natalia Kniazhevich - Bloomberg
Rising instability among some of the biggest US stocks is driving a measure of single-stock "fragility" to record levels, with the market increasingly vulnerable to whipsaw patterns among clusters of shares such as occurred in the dot-com bubble of the late 1990s. Stock fragility, a measure of a company's daily share-price move relative to its recent volatility, is on track to reach its highest in more than 30 years among the largest 50 stocks in the S&P 500 Index, based on the average magnitude and frequency of such individual shocks so far in 2025, according to Bank of America Corp. strategists.
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The Secretive Hedge Fund Rewriting the Rules of $4.5 Trillion Industry; Many of finance's brightest minds have stumbled trying to gatecrash the hedge fund aristocracy. QRT's rapid rise from unknown to the top 1% is rewriting the narrative of what's possible.
Nishant Kumar - Bloomberg
Under a low gray sky, a building site sits exposed amid the barren beauty of Iceland in winter. Rising from the frozen earth a timber frame stretches across the view, heralding the birth of a high-spec data center. This isn't just the usual tale of an AI-giddy tech giant looking to tap an abundant source of renewable energy and cooling power to help it crunch colossal amounts of information. The facility in the northern city of Akureyri is for a secretive hedge fund, Qube Research & Technologies. And it's almost certainly a first in this bitterly competitive $4.5 trillion industry. QRT wants the site to give it an edge in the race to find discrepancies in markets, and profit from them - a pursuit that's already handed it returns that make those of the established hedge fund elite look mediocre by comparison. But the data-center gambit is far from the only thing to set the firm apart.
/jlne.ws/4hyTmMV
| | | | | | Exchanges | | | Options Trading is Now Available in the UK
Robinhood
At Robinhood, we're committed to providing our customers with the tools they need to navigate the financial markets, no matter where they are. That's why we're excited to announce the launch of options trading for our UK customers. This is yet another step forward in our journey to expand access and empower investors across the UK.
/jlne.ws/42QkOBf
Gain Exposure to Bitcoin with Cboe's Bitcoin ETF Index Options
Cboe
Cboe launched the first SEC-regulated cash-settled index options related to the price of spot Bitcoin (Ticker: CBTX) for trading exclusively on Cboe Options Exchange in December 2024. Mini Bitcoin U.S. ETF Index Options (Ticker: MBTX) are available to trade at 1/10th the notional value of the standard options appealing to portfolios of all sizes.
Bitcoin ETF Index Options are cash settled and European-style exercise, meaning they can only be exercised on the expiration date. FLEX options are also offered on both the standard and mini Bitcoin ETF Index options, providing additional opportunities to create diversified trading strategies with exposure to Bitcoin. The new options leverage several strengths of the Cboe ecosystem, including ETP listings, index creation and index option trading and serve both retail and institutional investors.
/jlne.ws/410vGd2
Volatility Outlook: Why should all eyes be on Europe in 2025?
Eurex
We're only one month into 2025, and the financial markets have already dealt with what seems like a year's worth of news. Donald Trump began his second term in office by making market-impacting decisions from day one. European markets felt the impact of some of those actions as well. Also, Europe will have many events of its own impacting financial markets and volatility expectations throughout 2025, including national elections and central bank interest rate policy decisions. There will be a lot to keep up with in 2025, and Eurex has created a calendar highlighting these events. European traders should be prepared for extra volatility on the day of these events, and markets will exhibit some anticipatory behavior as we approach each event.
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| | | | | | Regulation & Enforcement | | | SEC Delays Short-Selling Disclosure Regime
Anna Lyudvig - Traders Magazine
The Securities and Exchange Commission (SEC) has delayed its first-ever short-selling disclosure regime by one year, pushing Rule 13f-2's initial reporting deadline to February 2026. As a result of the exemption, filings on initial Form SHO reports from institutional investment managers that meet or exceed certain specified thresholds will be due by February 17, 2026, for the January 2026 reporting period.
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JPMorgan, UBS, Nomura Face Korea Short-Selling Fines, Maeil Says; The banks, including MS, face $11 million in fines, Maeil says; Investigation identified 14 banks as rule violators: Maeil
Takashi Nakamichi and Shinhye Kang - Bloomberg
South Korea's financial regulator is imposing fines totaling 16 billion won ($11 million) on JPMorgan Chase & Co., Morgan Stanley, UBS Group AG and Nomura Holdings Inc. for allegedly violating the country's rules on short-selling stocks, the Maeil Business Newspaper reported. South Korean authorities previously announced that they found 14 banks in breach of short-selling rules after launching an investigation in 2023, the news outlet reported earlier, citing an unidentified official. The penalties are expected to be finalized before a ban on short-selling is lifted next month. The ban was put in place a little more than a year ago to weed out improprieties.
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| | | | | | Technology | | | Webull Connects to Kalshi to Offer Investors Innovative, Prediction Markets
Webull Financial
Webull, a leading digital investment platform, today announced that it has partnered with Kalshi, the first CFTC-regulated exchange with prediction markets. The partnership will offer users the ability to trade binary event contracts through the Webull platform. Prediction markets are one of the fastest growing asset classes in the US today. Kalshi has recently secured its ability to launch financial brokers on the platform. To ensure investors have access to best-in-class tools, Webull has relentlessly driven innovation over recent years, continually enhancing its platform to meet shifting market demands - as seen with the increase in short-dated options volume.
/jlne.ws/41aM4ZU
***** No one saw this one coming.~JJL
| | | | | | Strategy | | | Yen Options Are Signaling Vulnerability of Bullish Currency Bets; Plenty of room for bullish yen trades to unwind, Nomura says; Fukuoka Financial Group sees yen weakening to 157 per dollar
David Finnerty and Ruth Carson - Bloomberg
It took just a week for cracks to appear around wagers for a stronger yen in the $300 billion-plus currency options market.
Strong US inflation data and the prospect of a deal to end the war in Ukraine have dented the yen's appeal, according to Barclays Plc. That's after hawkish comments from a Bank of Japan official and upbeat wage data last week boosted the currency to its strongest level this year.
Moves in the options market are beginning to reflect bearish market views.
/jlne.ws/4hyU3Ww
| | | | | | Events | | | Options Industry Conference!
Join OCC and the U.S. option exchanges for the 43rd annual Options Industry Conference, May 6-8, 2025 at PGA National Resort, Palm Beach Gardens, Fl. The conference focuses on the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
The premier annual event for top-level management and trading professionals, the Options Industry Conference presents content at the intersection of business and regulation, delivering what the industry needs to advance together, year after year.
This three-day event brings together the most diverse and accessible group of key industry professionals, influential speakers, and top-quality content to curate an experience of connecting, learning, and engaging. Whether you seek to expand your network, dive deep into new topics or share knowledge of your own, we provide the forum to achieve it all.
The Options Industry Conference is open to leaders and representatives of exchanges, trading firms, institutional and retail brokerage businesses, professional service providers and financial technology organizations.
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| | | | | | Miscellaneous | | | Not Everywhere Is Insider Trading; CFDs abroad, Vanguard advice, Dow tracking error and Metaplanet.
Matt Levine - Bloomberg
Insider betting
Here's an insider trading hypothetical for you. I have a golf buddy who is a senior executive at a public company. One day on the course, she tells me: "My firm is going to announce a takeover of Anacott Steel at $15 per share; you should buy some." I go back to my office, open up my brokerage app, and am about to buy 10,000 short-dated out-of-the-money call options when I think: "Wait, no, this is insider trading, I will get in trouble for this." I close the app. Instead, I pick up my phone and call you. "Hey," I say, "I'll bet you a million dollars that Anacott Steel closes above $13 this Friday." You are a degenerate gambler and have never heard of the concept of adverse selection, so you say "ha, Anacott Steel is at $10 now, this is easy money, it's a bet." The next day, the takeover offer is announced, the stock goes to $14, and I collect $1 million from you.
/jlne.ws/3XmPExV
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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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