| March 14, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Fad or foundation? Options industry executives weigh in the equity options trading boom in India and the US
Ben Voyles - FIA
In 2019, investors in the US traded about 4.9 billion equity option contracts. By 2023, that number had risen to 11 billion. Growth in India has been even more explosive: In 2023, the number of equity index options that traded on the National Stock Exchange of India and the Bombay Stock Exchange topped 84 billion contracts - over half the futures and options traded in the entire world.
In a recent panel discussion at the International Futures Industry Conference in Boca Raton, FL, several senior executives of the equity options trading ecosystem weighed in on the reasons for the explosive growth, why they think trading volume will continue to climb, and what the industry is doing to keep customers and regulators happy.
/jlne.ws/48XSX1j
Traders Pile Into Bullish Copper Options as Output Cuts Loom
David Marino and Yvonne Yue Li - Bloomberg
Traders bought into bullish copper options Wednesday, betting the industrial metal's rally will extend on possible supply tightness and monetary easing. Total options volume spiked to more than 52,000 contracts, according to exchange data. Implied volatility and the call skew jumped, signaling additional bets on higher prices.
/jlne.ws/49OYcBJ
China's Copper Smelters Vow Capacity Controls After Fees Plunge; Industry's response stops short of co-ordinated output cuts; Metal is also benefiting from Fed's expected pivot to easing
Bloomberg News
China's copper smelters pledged to control capacity as the industry responds to a tightening in the global concentrate market that's led to processing fees falling to near nothing.
Executives from 19 smelters have agreed to re-arrange maintenance work, reduce runs and delay the startup of new projects, the China Nonferrous Metals Industry Association said in a statement, following a meeting in Beijing on Wednesday. The group stopped short of outright production cuts and the statement didn't give details on the scope of the adjustments.
/jlne.ws/3ID2U9O
Commodities Get Pulled Into the Global Short-Volatility Trade
Alex Longley, Archie Hunter, Mark Burton and Priscila Azevedo Rocha - Bloomberg
Traders are betting against volatility in raw materials prices, countering the commodity sector's notoriously boom-and-bust history. Whether it's an oil market that is stuck firmly in a range due to OPEC+ cuts and abundant spare capacity, or copper prices torn between surging renewable demand and strains in more traditional consumption areas, there have been plenty of factors keeping the world's commodity prices stuck in recent months. Gas volatility is back to where it was before a supply crisis in Europe.
/jlne.ws/3PmPVwu
Millennium Trader Scored $40 Million Windfall in Egypt FX Plunge
Donal Griffin and Srinivasan Sivabalan - Bloomberg
Millennium Management, one of the world's biggest hedge funds, made tens of millions of dollars when Egypt allowed its currency to weaken after a successful bet by one of its senior traders, people familiar with the matter said.
Naveen Choppara, who joined Millennium in Dubai last year, wagered that Egypt would allow the devaluation in order to stave off an economic crisis, according to the people, who requested anonymity as the details aren't public. When the pound tumbled 38% on March 6 after the country's central bank introduced a record interest-rate hike, he made a profit of about $40 million, some of the people said.
/jlne.ws/3VdjioV
Nvidia CEO Faces Sky-High Investor Expectations at AI Conference; Attention is on AI darling's annual GTC conference next week
Carmen Reinicke and Subrat Patnaik - Bloomberg
Nvidia Corp.'s annual artificial intelligence conference is just days away and expectations are high for the semiconductor maker to deliver news that will sustain the blistering rally in its stock.
"Nvidia GTC," the company's graphics processing unit technology event, has quickly become a global AI conference for developers. It runs from March 18-21 in San Jose, California, with Chief Executive Officer Jensen Huang due to speak on the opening day. His comments may help Nvidia stock end a bout of volatility and resume its surge of more than 80% this year.
/jlne.ws/4abWYAm
| | | | | | Exchanges | | | How Spot Bitcoin ETFs are Performing Across Exchanges
Kevin Davis - Cboe
In January 2024, 10 spot Bitcoin ETFs launched in the U.S. after receiving approval from the Securities and Exchange Commission (SEC). It has been nearly a decade since the first spot Bitcoin ETF was filed and numerous milestones have been achieved along the way to get to this point. In late February 2021, Purpose Investments listed the world's first spot Bitcoin ETF in Canada. Eight months later, the first U.S. Bitcoin futures-based ETF was listed and gathered $1 billion in assets in just two days. In 2022, Global X and 21Shares partnered to list the first Australia Bitcoin ETF on Cboe. Europe followed suit in 2023, listing its first spot Bitcoin ETF from Jacobi Asset Management. After more than 20 U.S. exchange rule filings had been disapproved since 2017, 10 spot Bitcoin ETF filings received SEC approval in January 2024. Of those 10 spot Bitcoin ETF filings, six were filed by Cboe as the primary listing exchange.
/jlne.ws/3IB4dpC
Robinhood Trading Volumes Jump in February
Hannah Miao - The Wall Street Journal
Robinhood customers are trading more.
Trading volumes in February rose from the previous month and from a year ago, the company said Wednesday.
/jlne.ws/3Tzb9Kg
OCC Colleagues Celebrate Black History Month
OCC
Throughout February, OCC's Employee Network Group, Black Organization for Leadership and Development (BOLD), proudly celebrated Black History Month by hosting events and starting conversations about milestones in Black history that enacted change in the lives of all Americans.
This year BOLD celebrated the 70th anniversary of Brown v. Board of Education, a groundbreaking 1954 ruling by the U.S. Supreme Court, which declared that state laws establishing racial segregation in public schools are unconstitutional. BOLD created a presentation detailing the complex history of this landmark decision and how it ignited a movement to close the opportunity gap, and some members shared how the ruling personally impacted their families.
/jlne.ws/48V1u51
| | | | | | Regulation & Enforcement | | | Tom Hayes' Libor conviction 'extraordinarily unfair', court hears
Alistair Gray - Financial Times
The judge who oversaw Tom Hayes' conviction for conspiring to rig the Libor interest rate denied him a fair trial by giving "extraordinarily unfair" directions to a jury, the former trader's barrister argued in a fresh appeal on Thursday.
Adrian Darbishire KC told the Court of Appeal in London that the former UBS and Citigroup trader's conviction in 2015 â for which he served five and a half years in prison â was "unsafe".
/jlne.ws/4chrryD
| | | | | | Technology | | | 'Transformed' Trading Technologies Aims to Accelerate Growth
Editorial Staff - Traders Magazine
Fresh off a series of acquisitions and steady organic growth, Trading Technologies is seeking further expansion via multi-asset trading products and doing more business in Asia-Pacific. Speaking with Traders Magazine March 12 at the International Futures Industry Conference in Boca Raton, Trading Technologies Chief Executive Officer Keith Todd noted the company has "transformed" since his first FIA Boca event as CEO two years ago, with annual revenue up from $98 million to $170 million. Todd highlighted growth areas including a consolidated position in exchange-traded derivatives and traction in multi-asset class trading, including TCA and compliance. "We are focused on bringing multi- asset capabilities to the user."
/jlne.ws/3vaK6eR
| | | | | | Strategy | | | Are Option Income Funds Suppressing Volatility?
Mandy Xu - Cboe
What's Behind the Low VIX Index Level?
Equity volatility has fallen significantly over the past year, with the VIX index declining from an average of 26 in 2022 to just 17 2023. The 9 pt year-over-year decline ranks as the 3rd largest annual drop in equity volatility on record, behind only 2010 (post-GFC) and 2021 (post-covid). So far, 2024 looks to be much of the same, with the VIX index averaging just 13.5 YTD, well below levels we saw even pre-pandemic.
/jlne.ws/3PhcVwP
VIX Indices
Cboe (Video)
In #Vol411, Russell Rhoads describes how the #VIX Index and its variants (i.e. #VIX1D) relate to each other and how one could interpret those varying relationships.
/jlne.ws/4ad4omH
| | | | | | Events | | | Our next conference will be the Options Industry Conference to be held April 30 to May 2, 2024 in Asheville, NC. The early bird registration fee break ends tomorrow, so register today with this LINK.
| | | | | | Miscellaneous | | | Nvidia founder tells Stanford students their high expectations may make it hard for them to succeed: 'I wish upon you ample doses of pain and suffering'
Orianna Rosa Royle - Fortune
We are often told that setting the bar high is key to success. After all, if you shoot for the moon and miss, at least you'll land with the stars. But Nvidia's CEO Jensen Huang wants privileged Gen Z grads to lower their expectations. "People with very high expectations have very low resilience-and unfortunately, resilience matters in success," Huang said during a recent interview with the Stanford Graduate School of Business. "One of my great advantages is that I have very low expectations."
/jlne.ws/4cgNhSN
***** Looks like Nvidia's CEO is rebooting the age-old wisdom for the tech-savvy generation: to truly reach the stars, you might need to start by debugging your dreams first.~JJL
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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
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