| July 28, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Chicago Options Exchange Market Rigging Case Ends in Appeal Win
Mike Leonard - Bloomberg
Cboe Global Markets Inc. escaped litigation over the Chicago Board Options Exchange's volatility index, or VIX, when a federal appeals court in Chicago rejected claims it should have done more to guard against market manipulation by unidentified commodities traders.
The US Court of Appeals for the Seventh Circuit upheld a decision by Judge Manish S. Shah, who in January 2020 dismissed class action claims brought against the exchange operator by a group of traders alleging violations of the Securities Exchange Act and the Commodities Exchange Act.
/jlne.ws/3cDbdFG
Quantitative Brokers Expands Cboe Collaboration, Adds VIX To The Liquidity Tracker; QB Provides Best Execution Analytics and New Analytics to Help Track and Achieve Best Execution on VIX Futures
Quantitative Brokers
Quantitative Brokers (QB), a leading provider of advanced institutional execution algorithms and data-driven analytics for global futures, options, and OTC fixed income markets -- today announced that it is adding the widely traded Cboe Volatility Index (VIX ) futures contract to QB's Liquidity Tracker open-source analytics tool. Cboe is a leading provider of global market infrastructure and tradeable products, and this latest move expands QB's support of Cboe products.
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***** QB continues to methodically add products to its mix. ~JJL
Crypto Exchange FTX US Expands Stock Trading, Plans Options Next; Stock-trading service launched to all US users after beta test; Plans to add options trading in future, following Robinhood
Yueqi Yang and Katherine Doherty - Bloomberg
Crypto exchange FTX US is expanding its no-fee stock trading service to all US users, including non-crypto investors, in a move to expand its customer base and increase assets under custody. "Our beta users were from a pool of existing FTX US crypto users," Brett Harrison, president of FTX US, said in an interview. "It will be very interesting when we open it to all to see how many FTX US users start to trade stocks, and to what it extent we will be able to bring new users."
/jlne.ws/3OAxvVW
Fasten your seatbelts for a bumpy ride, Euronext CEO warns
Huw Jones - Reuters
Investors should get ready for a bumpier ride as markets adjust to prolonged inflation, hefty interest rate rises and a fall in the euro to parity with the dollar, Euronext chief executive Stephane Boujnah said on Thursday.
Unavoidable volatility in share prices in months to come means that exchanges and their customers must remain agile to also cope with supply chain pressures and fallout from the war in Ukraine, Boujnah said.
/jlne.ws/3bekALC
Top Quant Says Markets Priced in a Recession Already. Here's What to Know.
Phil Rosen - Business Insider
1. The Federal Reserve announced a 75-basis-point interest rate hike. It mirrored the previous hike, matched the consensus expectation, and added to concerns that the Fed may put the US economy into a recession.
But even amid the Fed's aggressive tightening and the weak economic data of late, the worst of the volatility and risk in the stock market has come and gone, according to JPMorgan's Marko Kolanovic.
/jlne.ws/3ODG7Lr
| | | | | | Exchanges | | | Cboe Global Markets to Migrate Corporate Data and Analytics Platform to Snowflake Data Cloud
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced it is leveraging Snowflake, the Data Cloud company, to migrate its corporate data and analytics from on-premises systems to the cloud. The adoption of Snowflake's Data Cloud will help transform Cboe's data and analytics infrastructure into a modern cloud architecture, bringing speed, scalability, and efficiency to the company's handling of its internal, proprietary data and analytics.
/jlne.ws/3bewQMk
Trading Discontinuation of 9 Equity Index Futures / Options
HKEX
According to our Equity Index Futures / Options product review result, Hong Kong Futures Exchange Limited (the "Exchange") has decided to discontinue the trading of following 9 Equity Index Futures / Options.
/bit.ly/3PZv9kr
| | | | | | Regulation & Enforcement | | | CFTC Approves a Proposed Rule and a Proposed Order and Request for Comment
CFTC
Today, the Commodity Futures Trading Commission voted in favor of advancing two proposals. The first is a proposed rule on governance requirements for derivatives clearing organizations (DCOs). The second is a proposed order and a request for comment on an application for capital comparability determination submitted by the Financial Services Agency of Japan.
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| | | | | | Strategy | | | High-Probability Trades: Strategies for Trading SPX Weeklys Options
Cboe
Jobs reports, Fed policy meetings and earnings could trigger a large move in the S&P 500 Index. For options contracts that expire on a specific event day, it could mean higher implied volatility. And higher volatility generally means a higher premium.
With SPX Weeklys options (SPXW) expiring every day of the week, you can now target exposure to a single event and select expirations that align with company news or market events. Remember, you're trading short-term contracts, which have high gamma. That means a small change in the value of the S&P 500 could magnify gains and losses in the weekly options.
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These ETFs Promise Protection in a Down Market. It's Working.
Debbie Carlson - Barron's
Investors who are worried about the stock market declining, and who don't mind limiting potential upside gains, can consider a new breed of exchange-traded funds called defined-outcome ETFs.
The funds, also called buffered ETFs, use options to mitigate losses in exchange for capping some gains, creating guard rails on an investor's return. Since debuting about four years ago, assets in the funds totaled around $13.6 billion as of mid-July and took in $5.4 billion in 2022, according to Bloomberg data provided by Innovator ETFs.
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| | | | | | Miscellaneous | | | Extreme heat is a wake-up call for investors on infrastructure
Alice Ross - Financial Times
On the day the UK experienced its hottest day on record, people glued to their TV screens saw a row of burning houses. Rather than fretting like many of us did about the surreal sight of wildfires so close to central London, Mike Fox's attention was on a power cable in the background of the flames.
"My thought was OK, it probably isn't anything to do with that pylon. But supposing it hadn't been properly maintained and created a spark that created the fire," he says. The scenario made him think of PG&E, the largest utility in the US, which filed for bankruptcy in 2019 after trees that fell on its power lines caused widespread forest fires. US headlines labelled it the world's first climate change bankruptcy.
/jlne.ws/3oA60Bp
Powell says markets have been orderly as Fed has hiked rates
Reuters
Federal Reserve Chair Jerome Powell on Wednesday said he has been gratified to see that financial markets have behaved in an orderly way as the U.S. central bank has hiked interest rates.
/jlne.ws/3S9DLH1
Options are a way to lose money, unless you're the one selling them
Peter Hodson - Financial Post
When I first started in the investment world, I quickly discovered the joy â and pain â of trading options. At first, like most traders, I thought buying calls and puts was the key to quick riches. But after multiple losses as a 21-year-old, it became very clear to me that the riches were to be obtained from selling options, not buying them. Now, years later, I continue to sell options â mostly covered calls â to supplement my income.
/jlne.ws/3vnwUQG
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| | | Jeff Bergstrom
Editor
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