| August 19, 2021 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | CME Group Flatly Denies It's In Talks with Cboe Global Markets
Suzanne Cosgrove - John Lothian News
The CME Group Wednesday issued a firm denial that it was in talks to acquire Cboe Global Markets, a clear attempt to squash a story published by the Financial Times earlier in the day.
The FT story said the CME Group had "approached" Cboe Global Markets about an all-share deal for nearly $16 billion. It also was surprisingly specific about the alleged details of the proposed purchase. Citing unnamed sources, FT said the CME offered 0.75 of its own shares for every Cboe share, which would value Cboe at about $150 per share.
In a statement released publicly via PRNewswire, the CME Group said it "denies all rumors that [it] is in conversations to acquire Cboe Global Markets.
"The company has not had any discussions with Cboe whatsoever. While the company does not typically comment on rumor or speculation, today's inaccurate information required correction," it concluded.
To read the rest of this story, go HERE.
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****JJL: Funny how the MIAX/MGEX SPIKES futures make a new record volume day trading on August 17 and shortly thereafter there are rumors the owner of the competing volatility product (the VIX), Cboe Global Markets, is being sold. SPIKES traded 8,202 contracts, which was their best volume day since the product relaunched in December of 2020. -- MGEX
| | | | | | Lead Stories | | | CME Denies It's in Talks for $16 Billion Takeover of Cboe
Matthew Leising, Katherine Doherty, and Nick Baker - Bloomberg
August 18, 2021, 2:09 PM
CBOE shares surge, then fall back after CME Group's denial
Longstanding speculation has surrounded the two exchanges
CME Group Inc. said it's not in talks to acquire Cboe Global Markets Inc., whose shares surged after the Financial Times said it was the target of a $16 billion takeover approach.
"CME Group denies all rumors that is in conversations to acquire Cboe Global Markets," the company said in an emailed statement Wednesday. "The company has not had any discussions with Cboe whatsoever. While the company does not typically comment on rumor or speculation, today's inaccurate information required correction."
/bloom.bg/3y28hYa
******JJL: When was the last time the CME and Cboe talked about a deal? Those conversations ended. The CME and ICE were in talks for a deal too, back in 2016, but those talks ended when CME allegedly had "antitrust" concerns that were always present from the time they started the conversation.
****SR: Also see stories from The Chicago Tribune, The Wall Street Journal and Reuters.
CME/Cboe: logical exchange consolidation but the timing might be tardy; Combining the two groups would make a lot of sense
LEX - FT
The Second City of the US may not need two separate financial exchanges. The Financial Times has reported that Chicago-based CME approached smaller neighbour Cboe about an all-stock takeover. The deal would roughly value the company behind the Vix volatility index at $16bn. Even with a 20 per cent premium, Cboe would be a minnow in the consolidating world of exchanges.
/on.ft.com/3D4tGnA
Options, Taper, Virus: Nervous Stock Traders Picked Their Poison
Vildana Hajric and Lu Wang - Bloomberg
The stock market's perfect record of tumbling in the middle of the month remains intact. So does the record of pundits in disagreeing over what's causing it.
With the S&P 500 Index dropping as much as 0.7% Thursday, putting it on course for its worst three-day drop in a month, investors had a plethora of explanations to review, ranging from concern over Federal Reserve tapering to a resurgent virus to worries about the supply chain and volatility born of the expiration of equity options.
/bloom.bg/37XYTu4
Tech leads stock gains ahead of big options day
Rita Nazareth - Bloomberg News
Stocks climbed as dip buyers emerged after a two-day selloff in a volatile session ahead of Friday's options expiration. The dollar rose.
The S&P 500 erased losses, with giants Apple Inc. and Microsoft Corp. pacing a rally in technology companies. The Cboe Volatility Index was on track for its biggest weekly surge since January. An earlier equity slide was driven by anxiety over the withdrawal of Federal Reserve stimulus, the virus spread and global supply chains.
/bit.ly/3gi79tp
The Cryptocurrency Derivatives Market Is on Fire, Bitcoin Options Double to $7.86 Billion
Tim Sloane - Payments Journal
For those that feel holding bitcoin has an insufficient risk/reward profile there is always the cryptocurrency derivatives market to add spice your life:
The cryptocurrency market has successfully rebounded from the two-month slump it had gone into from late May to the end of July. Bitcoin (BTC) and Ethereum (ETH) have been leading the charge, posting impressive gains over the last two weeks. The market is seeing price levels that it had reached back in May of this year.
/bit.ly/3gdkG5p
Markets Gripped by Anxiety Over Covid, China, Fed's Tapering
Netty Idayu Ismail - Bloomberg
Iron ore, luxury stocks and the dollar are all sending the same message across markets: investors are getting uneasy.
That anxiety was on display on Thursday as global markets shuddered in the wake of concerns stretching from China's economy, Covid and the tapering of Federal Reserve stimulus. While the pain was sharpest in commodities and cyclicals, even defensive tech stocks slumped.
/bloom.bg/2Wazxq5
| | | | | | Exchanges | | | CME Group Denies Rumors of a Bid for Cboe Global Markets
CME Group
In response to press reports, CME Group today issued the following statement: "CME Group denies all rumors that it is in conversations to acquire Cboe Global Markets. The company has not had any discussions with Cboe whatsoever. While the company does not typically comment on rumor or speculation, today's inaccurate information required correction."
/bit.ly/37VXUup
CBOE whipsaws on reports of a possible CME acquisition, briefly halting trading in shares of the options exchange
Ethan Wu - Markets Insider
Shares in the Chicago Board Options Exchange whipsawed on Wednesday after a report emerged that CBOE was in talks to be acquired by CME Group for $16 billion, which CME later denied.
The report by the Financial Times, citing three people familiar with the talks, said that CME had approached CBOE with an all-stock deal that valued the options exchange at a roughly 20% premium to its current $13 billion market cap.
/bit.ly/3iZ0pSX
Cboe Advocates for Targeted Equity Market Structure Reform
Adam Inzirillo - Cboe
Adam Inzirillo, Senior Vice President, Head of North American Equities, recently wrote a note to customers detailing highlights from a paper written by Cboe's Market Policy and Government Affairs team regarding targeted equity market structure reform. Read his note below.
I wanted to share a paper our Market Policy and Government Affairs (MPGA) team recently published, which outlines Cboe's perspective on areas for increased efficiency and advocates for creating greater transparency and investor choice by modernizing certain rules and regulations that level the playing field between on and off exchange market centers. The paper outlines five key recommendations, highlighting that certain current rules and regulations in the U.S. equities market are outdated and need to be updated to fully align with modern markets.
/bit.ly/3z3JGDR
MGEX Announces SPIKES Futures Best Daily Volume and Overall Top 20 Day
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), reports that August 17th, 2021 was the 19th best overall day in the history of the Exchange with a total of 26,196 contracts. SPIKES Futures contributed 8,202 contracts to the total volume, which was the highest amount since the product relaunched in December 2020.
/bit.ly/3y1Pexk
'Ghost town' fears send Robinhood sliding as trading frenzy fizzles
Sruthi Shankar and Medha Singh - Reuters
Shares of Robinhood Markets Inc fell 9% on Thursday as the fee-free broker's warning about a slowdown in trading raised concerns about its reliance on a pack of small-time investors to sustain a frenzy in stocks, options and cryptocurrencies.
In its first results as a public company on Wednesday, Robinhood said the crypto trading mania this year helped double its second-quarter revenue, but also warned it expected retail investors who trade on its popular app to take a breather in the third quarter.
/reut.rs/3z1lmCo
| | | | | | Regulation & Enforcement | | | SEC sues three former Netflix engineers over insider trading
Anna Nicolaou - Financial Times
The Securities and Exchange Commission has sued three former Netflix engineers over insider trading, alleging they made more than $3m in profits by trading on subscriber numbers before they were released publicly.
As the entertainment business has moved towards streaming rather than traditional television, subscriber growth has become the most important metric for Wall Street in deciding whether to buy or sell media stocks.
/on.ft.com/2XwrfcS
Binance Stops Offering Crypto Derivatives in Australia
This came only a day after ASIC's general warning against unlicensed crypto exchanges.
Finance Magnates
Binance has restricted derivatives offering in yet another country, this time in Australia. The crypto exchange announced on Thursday that it is restricting Australian clients from opening new accounts for options, margin products and leveraged tokens.
The latest move is an extension of Binance's already imposed restriction on Australian users from opening new futures accounts. It also stopped offering crypto margin trading with the Australian dollar, along with pound sterling and euro.
/bit.ly/3y7K5E4
| | | | | | Strategy | | | How to Hedge Your Stock Portfolio Before Interest Rates Start Rising
Steven M. Sears - Barron's
If fairy tales were made into parables about investing, the boy who cried wolf would run a tail-risk fund.
To protect his stocks, the vigilant boy would perpetually buy bearish options contracts in anticipation that stock prices would fall. He would now be very busy, as many ominous events are bounding across the world's stage.
The fall of Afghanistan is a potentially destabilizing market event, especially ahead of the 20th anniversary of the Sept. 11 terrorist attack on the U.S.
/bit.ly/2WdeF1O
| | | | | | Education | | | Options clearing corporation leans into technology resilience
CIO.com
For 45 years, the Options Clearing Corporation (OCC) has been the only clearinghouse for all U.S. equity options trades. By serving as the buyer to every seller and the seller to every buyer in options trading, OCC manages risk for them. Join us to learn how technology resilience at OCC is part of its DNA, thereby ensuring confidence in the financial markets and the broader economy.
/bit.ly/3CUHXTH
| | | | | | Miscellaneous | | | Statement of Acting Chairman Behnam on the Passing of Philip McBride Johnson
CFTC
Commodity Futures Trading Commission Acting Chairman Rostin Behnam issued the following statement on the passing of former CFTC Chairman Philip McBride Johnson: "The CFTC shares in mourning the recent passing of former Chairman Philip McBride Johnson, who served as Chairman from 1981 until 1983. In 1982, as Chairman, he reached an agreement with the Securities and Exchange Commission Chairman John Shad on the Shad-Johnson Accord, which paved the way for futures on stock indexes. A true CFTC trailblazer, Chairman Johnson was instrumental in drafting key provisions of the Commodity Futures Trading Commission Act of 1974 that created the CFTC, giving life to a small independent agency that would become a world leader in the regulation and oversight of derivatives. "We at the CFTC offer our sincere condolences to his family, friends, and colleagues and recognize former Chairman Philip McBride Johnson as one of the CFTC's most influential leaders."
/bit.ly/38bByp7
VIX jumps 20% post-FOMC, USD gains [Video]
FX Street
FOMC minutes were hawkish, the market reaction was negative, but not alarmingly negative. But the VIX index jumped 20% as reaction to the latest FOMC minutes release. In this episode, I discuss why the VIX index is a good hedge for an eventual market turmoil.
The US dollar index advanced to the highest levels since November, and could further extend gains against its major counterparts on the back of a clear hawkish divergence from the Fed.
/bit.ly/3CXhbKt
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