| November 13, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Cboe today announced that Cboe Digital will launch margined Bitcoin and Ether futures on January 11, 2024, backed by crypto and traditional financial players. Cboe Digital says it is the first U.S regulated crypto and native exchange and clearinghouse to enable both spot and leveraged derivatives trading on a single platform. ~JJL
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To reinforce the function of margin, that is to "protect investors," Japan Securities Clearing Corporation (JSCC), a group entity of Japan Exchange Group (JPX), that handles clearing of JPX's derivatives market, has changed its Margin calculation methodology from "SPAN method" to "VaR method" on November 6, 2023
Under the VaR Margin calculation method, there are 2 types of calculation methods, Historical Simulation Method (HS-VaR Method) and Alternative Simulation Method (AS-VaR Method).
HS-VaR method is used for Index Futures/Options (such as our flagship contract Nikkei 225 futures, excluding dividends index futures), Japanese Government Bond (JGB) Futures/Options, Interest Rate Futures (3-Month TONA Futures) listed on Osaka Exchange (OSE), and TOCOM's Electricity and LNG Futures contracts. On the other hand, AS-VaR method is used for OSE's Dividends index futures, Precious Metals Futures/Options, Rubber Futures, Agricultural Futures and TOCOM's Energy Futures (other than Electricity/LNG Futures).
* In JST: JST minus 15 hours = Chicago time.
** Instruments subject to AS-VaR Method are also recorded.
CLICK HERE FOR MORE DETAILED INFORMATION
Note: Each Broker decides its handling of the amount of Margin to investors independently based on the Margin requirement JSCC notifies the Brokers. So, the Margin requirement JSCC calls for the Brokers and the amount of Margin Brokers require for investors to deposit may be different.
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Contact: Osaka Exchange / Tokyo Commodity Exchange Derivatives Business Development
E-mail: [email protected]
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| | | | | | Lead Stories | | | ETF to Cover $8 Billion in Short Options and the Market Knows It
Jan-Patrick Barnert - Bloomberg
The Nasdaq's November rally is set to get an extra boost this week from investors front-running an ETF's option expiration.
The $7.7 billion Global X Nasdaq 100 Covered Call ETF sells call options on the Nasdaq 100 to increase returns from the performance of shares in the index. Thanks to the technology benchmark's almost 10% rally since late October, the ETF's short position expiring Friday is now well below the index's current level, meaning the fund will need to buy thousands of futures contracts to cover.
/jlne.ws/3ubjOZ4
Excitement and worry as stock options trading booms in India
Jayshree P Upadhyay and Ira Dugal - Reuters
A sudden explosive growth in stock options trading in India this year has got the country's retail traders excited and regulators worried about the risks such speculative fervour could spawn. The boom in derivatives trading in the country's historically conservative markets, where some products such as stock futures are still too expensive, has come after stock exchanges changed some options contracts to facilitate quicker and cheaper bets and as online retail trading platforms mushroomed.
https://jlne.ws/477uiqR
Inside the super hedge funds that have Wall Street running scared; The latest wave of mega hedge funds is luring talent with $10 million golden hellos
Oliver Shah - The Times
Even on Wall Street, the sums being thrown at talent by a new breed of hedge funds inspires shock and awe. "I've never seen anything like it," said a senior figure at a bulge-bracket investment bank. "They have a bunch of people that just spend their time meeting for coffees, lunches, dinners, with any trader who will take their call. They know every person, from the first-year analyst to the partner ... They have an insatiable appetite and they're bidding up talent to a crazy, obscene level." Asked whether this was a headache for the old big beasts of finance - the likes of Citigroup, Goldman Sachs, JP Morgan and Morgan Stanley - the banker replied: "Oh, it's way more than a headache. They've gutted the street."
/jlne.ws/3QUUbEN
The real regulatory risk highlighted by a booming US Treasury arbitrage
Jonathan Guthrie - Financial Times
Some weird stuff is forbidden in the US. It is illegal to bring live snakes to Mardi Gras in Louisiana. North Carolina forbids drunken bingo playing. But no law yet prohibits "recklessly impair[ing] the basis trade". This is the esoteric misdeed imagined by Ken Griffin, chief executive of hedge fund group Citadel in a recent Financial Times interview.
The basis trade is an arbitrage between the price of Treasuries and futures contracts on them. Watchdogs are worried hedge funds are basis trading so prolifically that snarl-ups could destabilise markets that help set the cost of US public debt.
/jlne.ws/47sRGyU
Hedge funds are betting that stocks will fall and indexes will rise at the same time. What's going on?
Joseph Adinolfi - MarketWatch
The latest report from Goldman Sachs Group's prime brokerage, which facilitates trading for many of the world's largest and most prestigious buy-side firms, cut right to the heart of an issue that has been troubling Wall Street professionals all year.
/jlne.ws/49CCvoT
| | | | | | Exchanges | | | Cboe Digital to Launch Margined Bitcoin and Ether Futures on January 11, 2024, Backed by Crypto and Traditional Finance Players
Cboe
Cboe Digital today announced plans to launch trading and clearing in margin futures on Bitcoin and Ether, beginning January 11, 2024. With this launch, Cboe Digital will become the first U.S. regulated crypto native combined exchange and clearinghouse to enable both spot and leveraged derivatives trading on a single platform. Committed to bringing trust, transparency and responsible innovation to the crypto spot and derivatives markets, Cboe Digital presents an intermediary-inclusive model, ensures separation of duties to avoid conflicts of interest, and uses an integrated exchange-clearinghouse model that will allow it to potentially bring more unique and groundbreaking offerings in 2024.
/jlne.ws/46kketG
High agility, more opportunities: Eurex launches Daily Options on DAX
Eurex is expanding its diversified equity index products offering with the introduction of DAX End-of-Day Options (ODAP) on 13 November 2023.
Eurex
Following the successful launch of Daily Options (ODTE) on the EURO STOXX 50 Index, DAX Daily Options are designed to meet investor demand for options with short-dated expirations. DAX Daily Options enable investors to respond quickly to sudden market changes or events while providing more accurate and cost-effective trading.
/jlne.ws/47b3upS
London-based futures broker Marex preps for U.S. move
Swetha Gopinath, Isis Almeida and Ryan Gould - Bloomberg
Futures and options broker Marex Group is preparing for an initial public offering in New York, swapping venues two years after it pulled plans to list in London, according to people familiar with the matter. The UK firm, which is best known for its commodities business and is one of the largest dealers on the London Metal Exchange, is aiming to list next year, the people said. It's opted for New York due to the depth of the market and greater investor receptivity to growth stocks, according to the people, who asked not to be identified discussing private plans.
/jlne.ws/49yp0pW
| | | | | | Regulation & Enforcement | | | CFTC advisory committee focuses on power markets, touches on bank capital rules
Kyle Glenn - FIA
The US Commodity Futures Trading Commission's Energy and Environmental Markets Advisory Committee (EEMAC) held a meeting on 13 November in Washington, D.C., to discuss recent changes to electricity market trends, energy infrastructure, and other topics.
This marks the fourth EEMAC meeting held under the sponsorship of CFTC Commissioner Summer Mersinger.
| | | | | | Strategy | | | The Hottest Trade on Wall Street Is The FOMO Trade
Gunjan Banerji - The Wall Street Journal
The stock market's bulls are in charge now.
Sentiment in the U.S. stock market has rapidly flipped in recent weeks. Many investors are embracing a rally that sent the S&P 500 up around 7% over the past two weeksâthe best such stretch of the year.
SPX in the Lead
Cboe (Video)
/jlne.ws/3ue4NWn
| | | | | | Miscellaneous | | | Anger Is What's Driving the US Economy
A deep-seated resentment about a "rigged" system has been simmering since long before the pandemic and continues to affect consumer attitudes.
Betsey Stevenson - Bloomberg
As it turns out, the big economic story of 2023 is not a recession, as many had predicted â it's the disconnect between consumer sentiment and behavior.
Higher than normal inflation over the past two years is an obvious reason that people would be down about the economy. The puzzle is why people are still behaving as if their economic situation is good. Inflation-adjusted consumer spending is way up: Not only above 2019 levels, but above the pre-pandemic trend. In fact, it's largely the reason that US economic growth is above expectations. And yet consumer sentiment is at levels typically seen only in a recession.
/jlne.ws/49vR1yt
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
| | | Asma Awass
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