| March 23, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
| | | | | | Lead Stories | | | GameStop investors are playing by rules you'll find in a casino more than a stock portfolio
Mark Hulbert - MarketWatch
The odds remain stacked against GameStop, even with the unexpected profit the company reported earlier this week.
That's because GameStop, at its now much-higher stock price, is just as overvalued as it was before, if not more so. Its share price has been pushed higher in no small part by speculators who are attracted to the stock's lottery-type trading characteristics. Stocks with similar characteristics tend to underperform the market, on average.
/jlne.ws/3THDcWb
Investors to the Fed: We Don't Believe You
Gunjan Banerji - WSJ
The game of chicken between the Federal Reserve and investors is back on.
For some time, investors had given up on rate cuts later this year and seemed to take Fed Chair Jerome Powell's message that interest rates would stay high in stride.
/jlne.ws/3M3wrfR
Options traders: Options traders could face big losses as NSE scraps 'do not exercise' facility
Rajesh Mascarenhas - Economic Times
Mumbai: The National Stock Exchange has decided to withdraw the 'do not exercise' facility for investors trading in the stock options segment from March 30. Brokers said the move could result in traders incurring unprecedented losses on the expiry day of the futures and options contracts.
In a circular on Monday, NSE Clearing Ltd said the facility of 'do not exercise' (DNE) available for stock options on the March 2023 expiry of F&O contracts should be discontinued. This facility allows brokers to stop exercising option contracts on behalf of clients.
/jlne.ws/3TFFl4B
Funds suffer record reversal on record US rate bets
Jamie McGeever - Reuters
First the record wager on higher U.S. interest rates, now the record wipe out.
Commodity Futures Trading Commission (CFTC) data released on Tuesday shows just how badly hedge funds and speculators were wrong-footed by the violent reversal in near-term interest rate expectations triggered by the U.S. and Swiss banking crises.
/jlne.ws/3JDwjk8
Democrats Say Fed Risks Economic Harm, Showing Unease With Hikes
Alex Wayne - Bloomberg
The Federal Reserve's latest rate increase drew rebukes from Senator Elizabeth Warren, Senate Majority Leader Chuck Schumer and a senior House Democrat on Wednesday, showing the party's anxiety about a potential recession before the 2024 presidential election.
"The Fed under Chair Powell made a mistake not pausing its extreme interest rate hikes," Warren said in a tweet, after the Fed bumped its benchmark rate a quarter-point and indicated further tightening was possible.
/jlne.ws/3LNgMB0
The stock market hit a pandemic bottom 3 years ago. Here's how it has performed since then.
Isabel Wang - MarketWatch
It has been three years since the U.S. stock market hit its COVID-19 bottom as the global economy suddenly shut down at the start of the pandemic in early 2020.
The S&P 500 has risen nearly 76% from its closing low of 2237.40 reached on March 23, 2020, while the Dow Jones Industrial Average is up 72.3% from its low of 18591.93 hit on the same day and the Nasdaq Composite has advanced over 70%, according to Dow Jones Market Data.
/jlne.ws/3ndSmGA
Fed hikes interest rates again, pencils in just one more rate rise this year
Greg Robb - MarketWatch
The Federal Reserve on Wednesday raised interest rates again and signaled at least one more hike this year, but the failure of Silicon Valley Bank also forced the central bank to adopt a more cautious strategy despite stubbornly high inflation.
The Fed lifted its benchmark federal funds rate by a quarter of a percentage point to a nearly 16-year high of 4.75% to 5%. A year ago, that rate was close to zero.
/jlne.ws/3lAh6s2
| | | | | | Regulation & Enforcement | | | SEC cautions against investing in crypto asset securities as they may not comply with law
Anushree Dave - MarketWatch
Investors should use caution when investing in crypto asset securities, the United States Securities and Exchange Commission's Investor Education and Advocacy office in a statement on Thursday morning.
Investments in crypto asset securities can be "exceptionally volatile and speculative," the statement said, adding that the platforms where investors trade crypto may lack proper protections for investors. The statement also says the risk remains significant.
/jlne.ws/408jVQ8
EU Regulators to Rethink Liquidity After Credit Suisse Unravels
Nicholas Comfort and Steven Arons - Bloomberg
The rapidly unfolding crises of confidence at Credit Suisse Group AG and Silicon Valley Bank are prompting some regulators gathered at the European Central Bank to rethink their treatment of liquidity risk.
The watchdogs are in the early stages of considering how to improve banks' liquidity management, according to people familiar with the matter. While no formal discussions are underway, individual regulators sitting on the ECB's Supervisory Board say they want a better picture of the share of deposits that lenders can expect to retain during a crisis, the people said, asking not to be identified discussing private conversations.
/jlne.ws/3JHpTjR
The SEC Is Coming for Coinbase
Matt Levine - Bloomberg
I don't know what the US Securities and Exchange Commission's Wells notice to Coinbase Global Inc. is about. The notice itself â a letter that the SEC sends saying that it intends to bring an enforcement action â is quite bare-bones and doesn't say what the issue is, though presumably the SEC has given Coinbase some more detail over the phone. Quite possibly the problem is something fairly contained, like, "recently you launched a new product that we think violates the securities laws, so we are going to bring an enforcement action focused on that product."
/jlne.ws/40aXREC
| | | | | | Strategy | | | Turbulence in Equity Options
Cboe (Video)
In #Vol411, Scott Bauer @cboesib discusses the outlook for #volatility in the wake yesterday's $VIX expiration/#FOMC, and active tickers in equity #options $SQ $COIN
/jlne.ws/3TAA52p
| | | | | | Education | | | Selling The Options Drama: How to Sell Premium in Today's Market
Nasdaq
Selling premium is a popular trading strategy that involves selling options contracts to other investors. Traders and investors can generate income for their long-term portfolios using strategies like the covered call and cash-secured put.
In today's market, selling premium has become an increasingly important strategy for traders and investors alike, allowing them to take advantage of market conditions and generate returns in various market types.
What Does Selling Premium Mean?
/jlne.ws/3nilVql
What Is Short Selling? Hindenburg Stock Bets Explained
Lisa Pham, Jennifer Surane and Phil Serafino - Bloomberg
If you buy low and sell high, chances are you'll be richer and everybody will be happy. Sell low after borrowing high â what's known as short selling â and you may be rich, but odds are that quite a few people will be displeased. Critics say that short sellers distort the market and that their practices can blur into market manipulation. "Shorts" say they're keeping markets and companies honest. A series of negative reports from a short-selling firm, Hindenburg Research, have added fuel to the fire, as it targeted companies affiliated with Gautam Adani, one of Asia's richest men, and by Jack Dorsey, one of the founders of Twitter.
/jlne.ws/42CnEac
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