| May 17, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
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| | | | | | Lead Stories | | | Bear Market Rallies Can Be a Treacherous Lure; The descent from a historic top tends to be punctuated with violent reversals. Playing these rebounds is best left to traders who can move fast.
John Authers - Bloomberg
The dizzying volatility continues. Markets don't generally fall in a straight line, and bear market cycles provide plenty of opportunities. The problem is that those include the chance both to make and lose money.
/jlne.ws/3sF39JV
A Stock Bull Case Is Forming Around Bearishness at Hedge Funds, Quants
Lu Wang - Bloomberg
The repositioning has been fast and deep among the biggest stewards of investment money, a retreat from risk that may aid the bull case on stocks.
From speculative stock pickers to computer-driven traders, equity exposure has been cut to the bone. Hedge funds that make both bullish and bearish equity wagers have slashed their risky bets to a five-year low, while quantitative strategies have gone outright short, Goldman Sachs Group Inc. said.
/jlne.ws/3wygYLl
Morgan Stanley says there is a 27% chance of a recession in the US in the next 12 months, up from 5% just two months ago
Hamza Fareed Malik - Business Insider
Investment chief Lisa Shalett said slowing global growth and persistent inflation added to fears of a hard landing.Shalett said volatility in the commodity, currency, and credit markets is another risk factor for recession.
/jlne.ws/3yO2mu5
Shorts Who Bet Against Russia ETFs Get Hit by Never-Ending Fees
Elaine Chen - Bloomberg
Investors who bet against ETFs tracking Russian assets in the build up to the Ukraine invasion made the right call -- and they've been paying the price ever since.
Stocks linked to Russia plunged following the outbreak of war and subsequent economic punishment meted out to the country, vindicating bearish wagers. But sanctions also made trading Russian securities almost impossible, leaving short sellers unable to exit their positions.
/jlne.ws/3wvwyY8
VIX ETFs Haven't Really Reflected Enough Fear in the Current Market Pullback
Nasdaq
While the markets have experienced a bout of wild swings, the lack of extreme volatility reflected by the CBOE Volatility Index and VIX-related exchange traded funds suggest that market fears have not peaked and the bottom may not have actually passed.
/jlne.ws/3yKzHG6
| | | | | | Exchanges | | | Euronext posts record revenue, improves cost guidance
Reuters
Euronext (ENX.PA) reported on Tuesday record quarterly revenue as the pan-European stock exchange profited from high market volatility during a time of international crises, and improved cost control.
"Including the consolidation of the Borsa Italiana Group, Euronext delivered more than 50% growth year on year in reported revenue, adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) and adjusted net income," Chief Executive Officer Stephane Boujnah said in a statement.
/jlne.ws/3PoehV8
NYSE Pillar Options: Updates Available for Testing, May 19th Webcast
NYSE
Updates Available for Testing
On May 16th, 2022, the previously announced additional requested system enhancements will be available for testing in the Certification environment In preparation for NYSE Arca Options' migration to NYSE Pillar, which begins on Monday, July 11th, 2022.
/bit.ly/3lelh9k
NYSE US Exchanges to Close in Observance of Memorial Day
NYSE
MARKETNYSE, NYSE AMERICAN, NYSE AMERICAN OPTIONS, NYSE ARCA EQUITIES, NYSE ARCA OPTIONS, NYSE BONDS, NYSE CHICAGO, NYSE NATIONALSERVICETRADING
In observance of Memorial Day, the New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, NYSE National, NYSE American Options, NYSE Arca Options, and NYSE Bonds markets will be closed on Monday, May 30, 2022.
/bit.ly/3Nia1o9
| | | | | | Regulation & Enforcement | | | Allianz Unit to Plead Guilty, Pay $5.8 Billion on Alpha Hedge Fund Collapse
Bob Van Voris and Stephan Kahl - Bloomberg
A unit of Allianz SE agreed to plead guilty to fraud and pay $5.8 billion after misrepresenting the risk posed by a group of its hedge funds that collapsed amid pandemic market gyrations.
Allianz Global Investors US, which is wholly owned by the German insurance giant, will plead guilty to a single count of securities fraud and will pay, along with its parent company, more than $5 billion to victims. The total payout, including a $1 billion fine to the US Securities and Exchange Commission, is covered by provisions the company has already taken, it said.
/jlne.ws/3yF7r7T
| | | | | | Education | | | How a Fed Rate Hike Can Affect Option Prices
OIC
The price of every listed option is the result of many factors, one of which is interest rates. As a result, it is important for option investors to be aware of Federal Reserve policy decisions.
While rates may not be as influential on option prices as other factors, their impact is nonetheless a component of major pricing models. When rates change, the effect on option premium is represented by one of the option Greeks, called Rho. Specifically, Rho measures the impact of a 1% change in interest rates on an option price. If the Federal Open Market Committee (FOMC), the Fed's policy-setting group, alters its target federal funds rate, that would subsequently affect option premium, in theory, by the amount of Rho.
/jlne.ws/3LeraO9
Nasdaq Launches Digital Education Program to Increase Knowledge of Equity Derivatives
Nasdaq
Nasdaq Derivatives Academy is a digital learning program aimed toward a multitude of investor groups
Next step in Nasdaq's efforts to educate investors and increase financial literacy
Nasdaq (Nasdaq: NDAQ) today announced the launch of Nasdaq Derivatives Academy in the Nordics. The set of training programs, developed for Nasdaq by leading educational partners, addresses the growing interest among both investment professionals and retail investors to utilize equity derivatives and aims to increase knowledge about the opportunities and risks associated with trading the asset.
/bit.ly/3PpkIY6
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