| February 16, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Credit Hedging Boom Sets Up 'Extra Spicy' Options Day for HYG
Katherine Greifeld - Bloomberg
Wall Street's monthly expiry of options is normally associated with fireworks in the equity market, but corporate bonds could be in the mix when the next "OpEx" unfolds on Friday.
A surge in bearish positioning on the iShares iBoxx High Yield Corporate Bond ETF (ticker HYG) means this month's OpEx could be "extra spicy" for the $16 billion exchange-traded fund, reckons Charlie McElligott at Nomura Holdings.
/jlne.ws/3BpsGK9
Volatility in US Treasuries hits highest point since March 2020
Kate Duguid and Eric Platt - Financial Times
US government debt has been hit with the most serious bout of volatility since the pandemic-fuelled ructions of early 2020, making it more difficult for investors to transact in the world's most important bond market.
An Ice Data Services index tracking volatility in Treasuries hit its highest point this week in almost two years, as investors worried about tensions on the Russia-Ukraine border as well as signs of persistently high inflation and the prospect of the US Federal Reserve moving to rapidly tighten monetary policy.
/jlne.ws/3LBLIBN
With Energy Stocks, It's the Volatility That Kills You
Liam Denning - Bloomberg
For beaten-down energy bulls, the recent surge in oil and gas stocks â just as the technology darlings sell off â can feel like an overdue reversion toward not merely the mean but cosmic justice. Or maybe it's just that oil is back above $90 a barrel. Helpful as that is, however, it also presents a problem.
/jlne.ws/3BskwRh
IEA Wants More OPEC+ Oil Production to Cover Supply Gap and Cut Volatility
Salma El Wardany, Paul Wallace, Matthew Martin and Anthony Di Paola - Bloomberg
The International Energy Agency urged OPEC and its allies to address a widening shortfall in their oil production as a volatile market sends crude prices rocketing toward $100 a barrel.
While fuel consumption is bouncing back from the pandemic, the 23-nation alliance led by Saudi Arabia and Russia is struggling to restore output it halted. Members need to fix the issue as the supply gap versus their target spirals toward 1 million barrels a day, IEA Executive Director Fatih Birol told a conference in Riyadh via video-link.
/jlne.ws/34MvvsS
| | | | | | Exchanges | | | Nasdaq Europe to Launch New Equity Derivatives Platform
Shanny Basar - MarketsMedia
Nasdaq Europe will be going live with a new equity derivatives platform in the first quarter of this year after achieving records in its listings and trading businesses across the Nordic and Baltic regions in 2021. Bjørn Sibbern, president of European markets at Nasdaq, told Markets Media: "We want to be the leading exchange in Europe for both listings, trading and technology. This year we will go live with a new equity derivatives platform in the first quarter."
/jlne.ws/33oj4Tj
NYSE Group - Disaster Recovery Test - April 2, 2022
NYSE
On Saturday, April 2, 2022, NYSE will offer an opportunity for firms to test connectivity to the NYSE Disaster Recovery data center in Cermak. NYSE, NYSE Arca, NYSE American, NYSE National, NYSE Chicago, NYSE American Options, NYSE Arca Options, Global OTC, and FINRA/NYSE TRF will be available to test. The test will run between 8 AM ET and 12 PM ET.
/jlne.ws/3rSQinn
Opinion: Commission-free stock-market trading on some platforms may be raising costs and volatility for all of us
Tom Glynn and John Padrnos - MarketWatch
The growing use of payment for order flow in U.S. equity markets may be increasing volatility and costs for all investors by moving a greater share of money from exchanges to market makers.
Payment for order flow, or PFOF, drives some commission-free brokers' orders to off-exchange market makers including Citadel and Virtu rather than traditional exchanges. Last year the 12 largest U.S. brokerage firms earned a combined $3.8 billion from PFOF, up 33% from 2020, according to information compiled by Bloomberg Intelligence released Feb. 1.
/jlne.ws/3sOBFRh
| | | | | | Regulation & Enforcement | | | Episode 18: Advancing Crypto Derivatives
ISDA
With banks and institutional investors showing increased appetite for crypto assets, what role will derivatives play in this exciting asset class, and what steps need to be taken to build a robust and liquid derivatives market? Mark Wetjen, head of policy and regulatory strategy at FTX US, gives his views.
/jlne.ws/3gKpiA9
| | | | | | Strategy | | | Stock Market Strategy: 3 Investing Tips for Volatility From BNY Mellon
George Glover - Business Insider
BNY Mellon Wealth Management's director of investment strategy appears to be slightly more optimistic about the state of the stock market than some of his peers right now.
"I wouldn't say that I'm bullish, but I'm certainly not bearish," Jeff Mortimer told Insider in a recent interview. "Human beings like to fret and be skeptical, but I'm not telling our clients to take risk assets out of their portfolios - this feels like a neutral point in the market cycle."
/jlne.ws/3oUSRTR
| | | | | | Miscellaneous | | | People Are Worried About Block Trades
Matt Levine - Bloomberg
Most of what investment banks do is pitching. Sometimes an unsolicited transaction will show up at their door: A hedge fund will call to say "hey I was thinking about buying some derivatives, do you have any," an asset manager will call to say "hey I own a billion dollars of bonds I don't want anymore, will you buy them," a corporate client will call to say "hey I want to do a merger, what looks good," etc. But every time you get 10 minutes between inbound inquiries, you are pitching, or thinking up things to pitch. You dream up the derivative and then call the hedge fund to buy it. Clients mostly make money by owning things; banks mostly make money by making transactions happen. The banks are the ones who want the transactions to happen, so they're the ones suggesting the transactions.
/jlne.ws/3vbb3gf
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