| October 24, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Balanced trading is calming zero-day volatility fears
Faye Kilburn - Risk.net (Subscription)
Volumes in zero-days-to-expiration options, or 0DTEs, continue to break records - and split opinion. Market participants have questioned whether trading in the instruments is fuelling volatility in equity markets. The latest evidence suggests maybe not.
/jlne.ws/3QugNM7
The Unintended Consequence of Market Structure Reform: Cutting Out the Everyday Investor
Oliver Sung - Cboe
American investors have never had better access to markets than they do today.
There is more choice than ever on where to trade and how, and many barriers that once shut out the everyday individual investor are gone. Most individual investors also have access to the U.S. equities market through passive investments in their 401(K)s and pensionsâvehicles that help many Americans reach their goals. Collaboration between regulators and academia has allowed the U.S. equities industry to evolve greatly, improving accessibility while enhancing execution quality and liquidity, and maintaining safeguards that protect investors and the marketplace. This creates opportunities and enables individual retail investors to take matters into their own hands, with the freedom, access and ability to make informed decisions about their investments directly if they choose. This evolution of the equities markets will enable future generations to build better, more sustainable financial lives â if we keep that accessibility alive.
/jlne.ws/3FwJ6Dg
The Charts Revealing Treasuries Switching to Headache From Haven
Garfield Reynolds - Bloomberg
Wild swings in the "world's safest asset" are once again acting as a driver for volatility across global markets.
Treasury yields saw a sharp reversal Monday after the 10-year benchmark briefly breached 5%, with bonds flipping around as a resilient US economy makes it hard for investors to work out when the Federal Reserve will halt rate hikes. Surging government bond issuance and geopolitical tensions are also clouding the outlook.
/jlne.ws/3QhIbvI
'World's Safest Asset' Proves Anything But Amid Wild Treasuries
Liz Capo McCormick and Michael Mackenzie - Bloomberg
A surprisingly strong US economy and mixed signals from the Federal Reserve have fueled some of the wildest swings in Treasuries in recent memory. Add geopolitical angst and a surge in debt supply and you have a recipe for sustained volatility for months to come, market watchers say. Dubbed the "world's safest asset," Treasuries have not lived up to that title lately as dramatic moves in yields become an almost daily occurrence. Just last week, the rate on the 10-year swung in a range of almost 40 basis points, buffeted by crosscurrents including resilient retail sales and jobless figures, a bevy of comments from Fed officials and rising demand for haven assets amid concerns of an escalating conflict in the Middle East.
/jlne.ws/3Qsl2YG
A Wild Few Minutes Drive Bitcoin Above $35,000 as ETF Excitement Starts to Thaw the Crypto
Markets Insider
It was exciting enough for crypto observers when bitcoin [BTC] topped $31,000 on Monday.
And then its price went straight up. Late in the day, bitcoin took out $32,000, then $33,000, then $34,000 and finally $35,000 in just a few minutes. Perpetual contracts listed on Binance's exchange almost topped $36,000.
/jlne.ws/3Qxkm4l
Stock Market Outlook: Coming 'Macro Damage' Not Priced in, BlackRock Warns
Jennifer Sor - Markets Insider
Investors are adjusting to the new era of volatility in markets, but stocks still haven't priced in coming pain to the economy, BlackRock strategists warned.
The world's largest asset manager pointed to recent headwinds weighing on equities, with concerns over higher interest rates sending the 10-year Treasury yield past 5% on Monday while the S&P 500 continues its longest sell-off of the year. That shows that investors are adjusting to the "new macro regime," strategists said - a period defined by higher turbulence that will upend Wall Street's old investing playbook.
/jlne.ws/470Bu7V
Bond ETFs see 'crescendo' of investor demand after yield surge in fixed income
Christine Idzelis - MarketWatch
Heightened bond-market volatility has accelerated a "crescendo" of demand from large, sophisticated investors for exchange-traded funds focused on fixed income, according to Invesco's Anna Paglia.
Beyond ordinary investors, large institutional investors' interest in fixed-income ETFs has been picking up in the past couple months as Wall Street seeks to trade around the Federal Reserve's monetary policy and a spike in bond yields, said Paglia, Invesco's global head of ETFs and indexed strategies, during an interview on Monday.
/jlne.ws/46JzVLV
Nobody Wants Mutual Funds Now; Also contract redlines, bank bail-ins and carbon capture.
Matt Levine - Bloomberg
Barbell strategy
It feels like there are two dominant retail investment strategies: Buy and hold index funds, or Actively trade individual stocks and, while you're at it, maybe options or crypto.
Many ordinary people do not want to think about their investments much, and modern finance has designed a product that is ideally suited for them. It is the index fund (or index exchange-traded fund), whose essential thesis is that thinking about investments is unnecessary and in fact bad, and you should just buy the market and save on costs.
/jlne.ws/493pLr0
| | | | | | Exchanges | | | Euronext Clearing introduces an innovative VaR-based margin methodology for Italian equities, ETF and financial derivatives markets
Euronext
Euronext Clearing, Euronext's multi-asset clearing house, today announced the introduction of a new VaR-based margin methodology on the Euronext Milan equities, ETF and financial derivatives markets. As a reminder, the VaR-based margin methodology was already made available in 2022 for Italian, Portuguese, Spanish, and Irish government bonds on MTS and BrokerTec cash and repo platforms.
/jlne.ws/3FqRbtn
NGX To Promote Derivatives Market With Single Stock Futures Workshop
Mondovisione
Nigerian Exchange Limited ("NGX" or "The Exchange") is set to host a derivatives workshop in partnership with institutional investors and capital market stakeholders aimed at educating investors and other stakeholders on trading of Single Stock Futures on its Exchange Traded Derivatives (ETDs) market.
/jlne.ws/3tQnlvw
| | | | | | Regulation & Enforcement | | | 'No One Really Knows' When a Spot Bitcoin ETF Approval Could Come, Cboe Digital Chief Legal Officer Says
CoinDesk (Video)
Responding to whether spot bitcoin ETFs are likely to be approved before the end of the year, Cboe Digital Chief Legal Officer Katherine Kirkpatrick Bos discusses her thoughts on the potential timeline at CoinDesk's State of Crypto 2023 event in Washington, D.C. "No one really knows when we're going to get approval.. but even the fact that we're here talking about 'when' as opposed to 'if' is a massive shift."
/jlne.ws/490Tilf
| | | | | | Strategy | | | Biggest Week In Earnings
Cboe
In #Vol411, Tim Biggam @Delta_Desk shares that the $VIX Index is well under 20, so we'll see if that's the ceiling, lets us know that we're heading into the biggest week in earnings season (almost 40% of the S&P 500 reports this week) and more.
/jlne.ws/3FwdduM
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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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| | | Jeff Bergstrom
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