| October 20, 2021 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
Cboe's Global Reach Into EU and Asia Gets Ready Assist From EVP Dave Howson - Part 1
JohnLothianNews.com
When Dave Howson took on the role of EVP and president, Europe and Asia Pacific at Cboe Global Markets in January 2020, two major external events â the U.K.'s transition away from the EU and the global pandemic â threw him some immediate curve balls.
Contending with the complications of Brexit, COVID-19, and the remote work-at-home environment required more one-to-one customer interaction calls and more educational webinars for market participants so they would be well-prepared for the changes, he said.
Watch the video »
| | | | | | Lead Stories | | | Bourse operator Cboe to buy digital asset exchange ErisX
John McCrank - Reuters
Cboe Global Markets said on Wednesday it was buying Eris Digital Holdings (ErisX), a spot and derivatives exchange for digital assets, as the exchange operator seeks to become a major player in the cryptocurrency industry.
ErisX, which also runs a regulated clearing house, will be renamed Cboe Digital.
Terms of the deal were not disclosed. It is expected to close in the first half of 2022, subject to regulatory approval.
/reut.rs/3AZhGBr
****JB: Also see the Bloomberg article, Cboe Re-Enters Crypto With Deal to Buy Digital-Asset Platform and the Markets Insider article, Cboe acquires crypto derivatives exchange ErisX, betting big on the soaring digital asset space.
Stock Fear Gauge Defies Bond Turmoil. Here Are Four Reasons Why
Joanna Ossinger - Bloomberg
The global pandemic is still raging, U.S. policy makers are about to cut stimulus, energy prices are surging and bonds are being sold off. And yet, Wall Street's fear gauge is near an 18-month low.
The Cboe volatility index or VIX, which measures expected fluctuations in the S&P 500 Index, has been on a downtrend for the past month and dropped to 15.7 on Tuesday, near the lowest since February last year. The gauge is now well below its lifetime average of about 19.5, according to data compiled by Bloomberg stating in 1990.
/bloom.bg/3C1YDb1
Bitcoin Options Open Interest Tops $14B as ProShares ETF 'BITO' Goes Live
A pickup in options activity ahead of bitcoin's ETF listing signifies increased participation by sophisticated investors.
Omkar Godbole - Coindesk
Investor interest in the bitcoin options market increased, with the cryptocurrency nearing record highs in the lead up to Tuesday's launch of the first-ever U.S.-based bitcoin futures exchange-traded fund (ETF).
Bybt data shows the cumulative dollar value of bitcoin options contracts open on major exchanges rose to $14 billion on Tuesday, hitting the highest point since April. The tally was a whisker away from the peak of $14.68 billion reached on March 24.
/bit.ly/2Z6YKTQ
New Bitcoin ETF Creates More Options for Crypto Leverage
Katherine Greifeld and Vildana Hajric - Bloomberg
As the Bitcoin rally nears records and takes Wall Street by storm, crypto bulls and bears can now jack up their bets with derivatives on the newly minted futures ETF -- the latest industry watershed.
After the second-busiest exchange-traded debut on record, options on the ProShares Bitcoin Strategy ETF (ticker BITO) will begin trading on the NYSE Arca Options and NYSE American Options exchanges on Wednesday.
/bloom.bg/3vv0fr4
China Tech ETF Balloons to Record Size as U.S. Cash Floods In
Kamaron Leach - Bloomberg
Turns out, China's tech crackdown is having few lasting effects on U.S. investor demand for the country's megacap technology stocks.
Since slumping to a low in mid-August, KraneShares CSI China Internet Fund (ticker: KWEB) -- which holds shares of 53 U.S.-listed Chinese tech companies -- has jumped 21%. Cash flooding into the exchange-traded fund has also helped buoy total assets to a record $8.1 billion on Tuesday.
/bloom.bg/3aSQA4e
'Dazed and confused' investors are feeling the most bearish since the pandemic began as surging inflation and market volatility dent confidence, E-Trade says
Carla Mozée - Markets Insider
Investor enthusiasm toward stocks has dropped for the first time since the COVID-19 crisis unfolded in the US last year as inflation soars to multi-year highs, but the leap in gas and oil prices makes the energy sector more attractive, according to a quarterly survey from E-Trade.
Bullish sentiment has slid by 11 percentage points to 54%, a pullback from the third quarter when such sentiment hit a three-year high, the trading platform said about its fourth-quarter Streetwise survey. The impact of inflation on investment portfolios was the top concern among respondents to the online survey that ran from October 8 through October 16, at 52%.
/bit.ly/3pns2sC
'Trillions' Review: The Rise and Rise of the Index Fund
Burton G. Malkiel - WSJ
Index fundsâwhich buy and hold all the stocks in an index, such as the S&P 500ânow account for more than 40% of the money invested in mutual funds and exchange-traded funds. Literally trillions of investment dollars are currently indexed. Hence "Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever," a chronicle of financial innovation by Robin Wigglesworth, a correspondent for the Financial Times. "Trillions" is a magisterial, delightfully written history offering up portraits of the academic scribblers and entrepreneurial practitioners who created the index-fund revolution. It also contains common-sense wisdom that will benefit all investors.
/on.wsj.com/2Z6jdIy
China Evergrande Calls Off Plans to Sell Key Unit for $2.6 Billion
Serena Ng - WSJ
China Evergrande Group called off plans to sell a majority stake in its property-management unit for the equivalent of $2.6 billion, a major setback in the real-estate giant's attempts to ease its liquidity crunch.
The cash-strapped developer said Wednesday that it had planned to sell 50.1% of the profitable subsidiary, Evergrande Property Services Group Ltd. , to a unit of rival developer Hopson Development Holdings Ltd.
/on.wsj.com/3m6eMXv
Against the herd: trader Mark Spitznagel on contrarian investing; The fund manager says embracing risk and losses in good times is the way to prosper in a crisis
Laurence Fletcher - FT
When the coronavirus pandemic sent financial markets tumbling in March last year, fund manager Mark Spitznagel had one of his most profitable periods ever. His Miami-based Universa Investments, which trades options and aims to make "explosive" returns in times of market crisis, posted hefty profits as the S&P 500 index dropped 20 per cent in the first quarter of 2020.
/on.ft.com/3pkMcna
Options traders now betting on oil prices hitting US$200 â report
Surin Murugiah - The Edge Markets
KUALA LUMPUR (Oct 20): Some speculative traders are betting on the options market that oil could exceed US$100 (about RM415.20) a barrel by year end and even reach a record US$200 per barrel by the end of 2022.
In a commentary on Tuesday (Oct 19), energy portal OilPrice.com said call options give traders the right â but not the obligation â to buy assets at a certain price, the so-called strike price, by a certain date.
/bit.ly/30B3ulu
| | | | | | Exchanges | | | Cboe Agrees to Acquire ErisX, Entering Digital Asset Space with Spot, Derivatives and Clearing Platform
Cboe Global Markets
Ownership of ErisX provides Cboe with entry to digital asset spot and derivatives markets, including clearing and settlement; Cboe plans Digital Advisory Committee of industry participants to develop industry standard-setting platform; Opportunity to build comprehensive digital asset market data offering, create indices and explore further derivatives products; Deal is expected to close in the first half of 2022, pending regulatory approvals
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, announced it has entered into a definitive agreement to acquire Eris Digital Holdings, LLC (ErisX). ErisX operates a U.S. based digital asset spot market, a regulated futures exchange and a regulated clearing house. Ownership of ErisX presents a unique opportunity for Cboe to enter the digital asset spot and derivatives marketplaces through a digital-first platform developed with industry partners to focus on robust regulatory compliance, data and transparency.
/bit.ly/30KSxxZ
The Binance backlash
Jamie Campbell - Legal Cheek
Durham University law student Jamie Campbell looks at the potential dangers of crypto derivatives
Since the release of Bitcoin on 9 January 2009, the cryptocurrency market has steadily grown to be valued at over GBP1.5 trillion. While the median holding of investors in 2021 is relatively low at only GBP300, cryptocurrency investors, traders and enthusiasts have been able to speculate and increase their returns by utilising risky cryptocurrency derivatives. For those that don't know, a derivative is a "contract between two or more parties whose value is based on an agreed-upon underlying financial asset".
/bit.ly/3jkU4kH
Exchange Coordinated Contingency Closing Auction Testing - November 6, 2021 And December 11, 2021
NYSE
On Saturday, November 6, 2021 and Saturday, December 11, 2021, NYSE, NYSE American, NYSE Arca, Nasdaq and Cboe BZX will conduct testing of contingency closing auction procedures. The contingency closing auction procedures apply if a marketplace disruption prevents the primary listing exchange from conducting a closing auction. In the event of such a disruption, one exchange may designate another as the alternate exchange for the determination of the official closing price for its listed securities.
/bit.ly/3lUzCsr
| | | | | | Moves | | | Associate Principal, Member Services (Production)
OCC Help Wanted
The Relationship Manager's primary responsibility is to maintain exceptionally high levels of client satisfaction by enhancing the Clearing Member's experience with clearing their existing and new products. The Relationship Manager must possess a thorough understanding of OCC's products, systems, and processes as well as a broad understanding of the industry as a whole. The Relationship Manager provides daily support to members related to operational questions or issues which includes research and analysis of trade and position data. The Relationship Manager is expected to work independently with initiatives and define, quantify and analyze relationships to ensure each firm's operational requirements are met as they relate to their membership at OCC.
/bit.ly/30KQsC7
| | | | | | Education | | | Dawn of a New Era Brings on the Existence of Skew
Kevin Davitt - Cboe
The End of History
Francis Fukuyama's The End of History was published in 1989, just before the fall of the Berlin Wall on November 9. That event signaled the end of the Soviet Union, the end of the Cold War era, and the beginning of something new. A new global order emerged. Fukuyama described that point as "not just the passing of a particular period of post-war history, but the end of history as such."
A similar cataclysmic event occurred two years prior. October 19, 1987 came to be known as Black Monday. That session marked the end of history in option markets and the dawn of a new era, an age defined by the existence of skew.
/bit.ly/3ATFaYA
| | | | | | Miscellaneous | | | Bitcoin ETFs should not exist; And a few more words on margins
Robert Armstrong - FT
Bitcoin ETFs: a bad idea whose time has come
You can now buy a bitcoin exchange traded fund. Or rather, a Bitcoin derivatives ETF: ProShares Bitcoin Strategy, which tries to capture returns from the cryptocurrency using futures contracts, started trading yesterday. I'm sure this is good news for someone, but on the face of it, it is hard to imagine a less appealing financial product.
/on.ft.com/3jllpmJ
Squid Game has lessons for investors
Moira O'Neill - Financial Times
If there's ever been a warning about taking extreme risks, Netflix's biggest hit Squid Game is it: 456 debt-ridden adults risking their lives playing children's games for a huge cash prize.
But I'm hoping that among the bloodshed and high drama, some of the 111 million viewers clocked the reference to investment.
/on.ft.com/3nf5WWJ
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