| September 26, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Exchanges don't trade. They provide a platform for others to trade, but if someone was trying to send a message to the market on Thursday about where there is the best liquidity, it came through clear as a bell. A record-breaking trade occurred in the short-term interest rates market on Wednesday at the CME, involving 118,000 futures contracts linked to the Secured Overnight Financing Rate (SOFR), Bloomberg reported. This massive block trade, the largest ever recorded for SOFR, surpassed the previous record of 75,000 contracts set in April. The trade, executed at 9:38 a.m. New York time, may represent either a bet on less Federal Reserve easing than expected or an investor taking profits by unwinding a long position as the contract neared its yearly highs. Following the trade, the December 2024 SOFR price dropped sharply, indicating a seller-initiated transaction. The CME Group confirmed the trade's record size. The deal, equating to about $3 million in risk per basis point move, suggests a potential $60 million profit from a 20-tick price increase. Preliminary open interest data indicated a modest rise, hinting at the possibility of a new position being established. ~JJL
| | | | | | Lead Stories | | | Bitcoin Climbs Past $65,000 Ahead of $5.8 Billion Options Expiry; Resistance at $65,000 persists amid steady rally in Bitcoin; Heightened volatility is set to come on Friday as expiry looms
David Pan - Bloomberg
Bitcoin rose above $65,000 for the first time in four weeks before the expiration of options contracts on Friday that some analysts say may result in heightened volatility in the cryptocurrency market.
Dipping back below that price level would prompt a sharp decline, while a sustained breakthrough could be followed by a rally, according to Chris Newhouse, director of research at Cumberland Labs.
/jlne.ws/4eivGKT
JPMorgan Rises on Tide of Active ETFs; It's dominance among options income ETFs is complemented by other areas of strength.
Gabe Alpert - Morningstar
At a time when many investors turned tail on traditional, actively managed funds and instead poured money into index funds, JPMorgan Asset Management has found a different recipe for success.
The mutual fund arm of the giant bank parlayed what had been niche investment strategy based on options into an exchange-traded fund juggernaut that has hauled in tens of billions of dollars. This franchise is led by the world's largest actively managed ETF, the $35.5 billion JPMorgan Equity Premium Income ETF JEPI.
/jlne.ws/3BmCSY0
TCW backtracks on ETF conversion plan; Manager has cancelled plans to convert investment-grade credit fund and will opt for a corporate bond fund instead
Daniel Gil, Ignites - Financial Times
TCW has backtracked on its decision to convert an investment-grade credit mutual fund into an ETF, opting to switch over another one of its bond mutual funds instead, regulatory filings show. In April, the manager filed to refashion the now-$28mn TCW MetWest Investment Grade Credit Fund into an ETF. However, last week, the fund's board voted to reverse its decision, determining that "proceeding with the reorganisation [was] no longer in the best interest of the fund and its shareholders," according to a filing.
/jlne.ws/4ehUAKD
| | | | | | Exchanges | | | OCC and OIC Support World Investor Week 2024
OCC
World Investor Week (WIW) is an annual global campaign spearheaded by the International Organization of Securities Commissions (IOSCO) to raise awareness about the importance of investor education and protection. Explore the World Investor Week website for details on events and other opportunities to participate.
During the week of October 7- 13, OCC and The Options Industry Council (OIC) are joining organizations around the world to support this important initiative.
/jlne.ws/4ehB6pH
| | | | | | Regulation & Enforcement | | | Federal Court Orders Texas Man and Six Companies to Pay Over $9.5 Million in Fraudulent Scheme Involving Futures, Options, and Foreign Currency
CFTC
The Commodity Futures Trading Commission today announced Judge Samuel A. Lindsay of the U.S. District Court for the Northern District of Texas entered multiple orders and a judgment against Rudy Avila; L.I.F.T. Group LLC (LIFT), Trading Ventures Group (TVG), Capital Ventures Group, LLC, (CVG), and Ventures Group, LLC ( VGL), all U.S. companies; and CIG Internacional Sociedad Anónima (CIG) and Trading Technologies Group Sociedad Anónima (TTG), both Costa Rican companies, requiring monetary relief totaling over $10.5 million The orders and judgment resolve the CFTC's enforcement action against these defendants filed Sept.14, 2021. [See CFTC Press Release 8424-21]
/jlne.ws/3MYsl7P
SEC Charges Merrill Lynch and Harvest Volatility Management for Ignoring Client Instructions; SEC penalizes firms, recovers more than $6 million of excess fees tied to options trading strategy
SEC
The Securities and Exchange Commission today announced charges against Harvest Volatility Management LLC and Merrill Lynch, Pierce, Fenner & Smith Inc. for exceeding clients' designated investment limits over a two-year period beginning in March 2016, which resulted in clients paying higher fees, being subjected to increased market exposure, and incurring investment losses. As part of the separate settlements, Harvest and Merrill have agreed to pay a combined $9.3 million in penalties and disgorgement to resolve the SEC's claims.
/jlne.ws/3zwAnBO
Dubai Adopts Stricter Rules Around Marketing Crypto Investments
Kateryna Kadabashy - Bloomberg
Dubai's crypto regulator updated its marketing guidelines for virtual assets, with the new rules requiring firms to include a disclaimer clarifying the risks of such investments. As of Oct. 1, companies looking to market virtual assets in the United Arab Emirates will have to include a "prominent" disclaimer stating that "virtual assets may lose their value in full or in part, and are subject to extreme volatility," the Virtual Assets Regulatory Authority said Thursday.
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SFC and HKMA conclude on further proposals to enhance Hong Kong's OTC derivatives reporting regime
SFC
The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) today (26 September) jointly published the conclusions paper on a further consultation on enhancements to the over-the-counter (OTC) derivatives reporting regime in Hong Kong.
/jlne.ws/3XXqaHO
| | | | | | Technology | | | Trading Technologies recognized as Technology Vendor of the Year, TT platform honored as Trading System of the Year in FOW Asia Pacific Awards
Trading Technologies
Trading Technologies International, Inc. (TT), a global capital markets technology platform provider, announced that it won two major categories at the FOW Asia Pacific Awards 2024. The firm received the award for Technology Vendor of the Year while its TT platform earned the honor of Trading System of the Year at a ceremony yesterday in Singapore. Hosted by Futures & Options World (FOW), the awards are designed to recognize the "best and brightest innovations in the derivatives industry," and the winners in the two categories were decided by a specialist panel of experts from across the Asia-Pacific (APAC) region. TT's Alice Pocklington, EVP Head of APAC, and Alun Green, EVP Managing Director, Futures & Options, accepted the awards on behalf of the firm at the ceremony following FOW's Trading Singapore conference.
/jlne.ws/3zAnzug
****** Just memorialize the award in their name and be done with it. ~JJL
| | | | | | Strategy | | | Sector View of Gold and Silver, Plus Two Trade Ideas
Michael "Dr. Data" Rechenthin - tastytrade
This week, we focus on a short strangle trade and an iron condor strategy.
/jlne.ws/3XZOmta
Is the VIX signaling another volatility spike is coming?
Sam Boughedda - Investing.com
Investing.com -- The CBOE Volatility Index, or VIX, often referred to as the "fear gauge," is showing signs of another potential spike in market volatility, according to the latest Sevens Report.
After surging above 60 in early August, the VIX has since fallen sharply and currently sits around 15.
/jlne.ws/3TN1rnk
| | | | | | Miscellaneous | | | Trump and Harris Want More Crypto Innovation. Yikes.; Rate cuts are a guide to what digital currencies are actually good for: speculation.
Lionel Laurent - Bloomberg (Opinion)
With only a few weeks to go before US elections, in a race where every vote and dollar counts, Donald Trump and Kamala Harris are courting the cryptocurrency crowd. Not quite to the same extent, of course: Trump is predictably going the extra mile to promote cringey NFTs and a crypto lending platform with dubious connections. But hearing both candidates laud digital-asset "innovation," mentioning it in the same breath as artificial intelligence, requires chutzpah - or a very short memory.
/jlne.ws/3N0WZO0
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