| March 21, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Goldman Sachs Conducts Its First OTC Crypto Options Trade With Galaxy Digital
Yueqi Yang - Bloomberg
Goldman Sachs Group Inc. executed its first over-the-counter crypto options trade, a further step in its expansion of digital-asset offerings to Wall Street investors.
The bank traded a non-deliverable Bitcoin option, a derivative tied to Bitcoin's price that pays out in cash, it said in a statement. The transaction was facilitated by Galaxy Digital Holdings Ltd., a crypto financial-services firm started by former Goldman partner Michael Novogratz. Options are used by crypto investors to hedge risks or boost yields, and over-the-counter transactions are typically larger trades negotiated privately.
/jlne.ws/3Ju78PV
**** JB: Also see the Barron's story, Goldman Sachs Breaks Ground on Wall Street With Bitcoin Options Trade and the Markets Insider story, Goldman Sachs Makes OTC Crypto-Options Trade With Galaxy Digital.
Markets Are Piling on Risk Again and Finding Pre-War Levels. Some Reasons Why
John Authers - Bloomberg
It is approaching a month since the Russian invasion of Ukraine started to dominate all thoughts and all discourse. And if you look at the markets, it appears as though it's safe to take risk again and the worst is over. U.S. stocks are now comfortably higher than they were at the point of the invasion, while bond yields have risen to significant new highs after a brief flight to safety:
/jlne.ws/3CWFpVv
Hedge Funds Stage Epic U-Turn as Aussie Dollar Shorts Backfire
Melissa Cheok and Ruth Carson - Bloomberg
Hedge funds beat a hasty retreat from bearish Australian dollar bets last week after wrongly wagering the risk-sensitive currency would suffer from Russia's invasion of Ukraine.
Leveraged funds slashed net-short futures and options positions on the currency by more than 70% during the week ended March 15, according to the latest data from the Commodity Futures Trading Commission. Their net purchases were the biggest in a decade -- a Herculean reversal from a week earlier when the funds were the most bearish since 2016.
/jlne.ws/36DUrn3
Market Gyrations Ease With Traders Recalibrating Russia Risk
Payne Lubbers and Ruth Carson - Bloomberg
Traders are beginning to re-evaluate the impact of the Russia-Ukraine war on their strategies as the conflict grinds into a fourth week.
The greenback edged higher against major peers as Asia trading began Monday, after its first weekly loss in a month, which came even as the Federal Reserve hiked rates. Japan's yen was steady after hitting a six-year low.
/jlne.ws/3ilDzUG
Russian Default Fears Send Bond Yields to New High As Trading Resumes
Phil Rosen - Business Insider
The yield on Russia's 10-year benchmark bond soared to a new all-time early Monday amid fears of a default as Western sanctions cripple the economy.
The OFZ ruble treasury yield skyrocketed to 19.7% before steadying at around 14% later as bond trading on the Moscow Exchange resumed. Russia halted trading three weeks ago after its invasion of Ukraine, though stock trading remains on hold indefinitely.
/jlne.ws/3tstCuZ
Nickel price volatility resumes as the metal plummets 15% on the London Metal Exchange to hit limit down
Bethany Dawson - Business Insider
Nickel dropped 15% to $31,380 a metric ton Monday, hitting its limit down trading range for the third straight session on the London Metal Exchange.
It also marked another session that the lower limit was reached despite the LME widening the trading range to accommodate high volatility.
/jlne.ws/3DdPihP
Hedge funds cut oil positions as volatility surges
John Kemp - Reuters
Investors trimmed bullish petroleum positions for the second week amid elevated volatility, with prices oscillating between the twin threats posed by sanctions-driven supply disruptions and a demand-destroying recession.
Hedge funds and other money managers sold the equivalent of 36 million barrels in the six most important petroleum-related futures and options contracts in the week to March 15.
/jlne.ws/3D14HBZ
Cash Crunch Drives Wild Moves in Commodities
Joe Wallace, Julie Steinberg and Ben Dummett - WSJ
Commodity traders are being hit by huge cash requests from banks and exchanges, propelling whipsaw moves in markets and hindering the movement of materials beyond Russia and Ukraine.
The outbreak of war sparked steep price changes by clogging commodity shipments in the Black Sea and leading Western importers to shun Russian exports. A vicious financial cycle is exacerbating the volatility and could worsen shortages in some parts of the world, traders say.
/jlne.ws/3JsWAAr
Bill Gross lost sleep and money betting against 'nonsense' GameStop and AMC meme stocks â but now he's up as much as $20 million
Hamza Fareed Malik - Business Insider
The Pimco co-founder estimates he's up at least $15 million now, after popular meme stocks slumped.Meme stock "nonsense" has come from the inability to earn a decent return in your 401k, Gross said.
Billionaire investor Bill Gross has said he lost money and sleep betting against GameStop and AMC, but he now feels vindicated after a slide in the popular meme stocks.
/jlne.ws/3JwpYWz
| | | | | | Exchanges | | | Special Executive Report; Amendments to the Disclaimer Rule in Connection with The Baltic Exchange Futures and Options Contracts
CME Group
Effective Sunday, April 3, 2022, for trade date Monday, April 4, 2022 and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. ("NYMEX" or "Exchange") will implement administrative amendments to NYMEX Chapter iv. ("Disclaimers") to modify the disclaimer rule in connection with all of the Exchange's futures and options contracts in Table 1. below (the "Contracts") which utilize prices from The Baltic Exchange. Exhibit A. further below provides amendments to Chapter iv. In blackline format.
/bit.ly/3wq8VBS
B2C2 becomes first crypto liquidity provider to join FIA
B2C2 via Finestra
B2C2, the crypto-native liquidity provider across market conditions, today announced that it has joined FIA, the leading global trade organisation for the futures, options and centrally cleared derivatives markets, as Associate Member, alongside global institutions supporting open, transparent and competitive markets.
/jlne.ws/3KUgpAM
Position Limits - Government Of Canada Bond Listed Products (All Months)
TMX
The applicable position limits for the Government of Canada Bond futures and options on the Government of Canada Bond futures have been updated and are reflected in the position limit file.
/bit.ly/3iuHU7P
| | | | | | Regulation & Enforcement | | | Behnam mulls market structure reform for crypto derivatives; FTX wants to bypass FCMs by integrating margin financing, execution and clearing activities
Bernard Goyder - Risk.net
Commodity Futures Trading Commission chairman Rostin Behnam has said the CFTC will "carefully consider" a proposal by cryptocurrency exchange FTX that would give retail traders direct access to cleared derivatives, bypassing brokers. The remarks come as exchanges including CME Group and Cboe Global Markets race to better integrate crypto derivatives into US financial markets. FTX's proposal bypasses the traditional gatekeeping role of futures commission merchants (FCMs) by integrating margin
/jlne.ws/3N6He6L
Vitol urges regulators to maintain 'integrity' of financial markets
Neil Hume - Financial Times
The world's biggest independent oil trader has called on regulators to maintain the "integrity" of the financial markets that underpin dealings in global commodities.
In its annual results statement, Vitol said policymakers needed to consider "market integrity and liquidity" on futures exchanges, which are used by the industry to manage price risk.
/jlne.ws/3ttRChp
| | | | | | Strategy | | | Technical Indicator Update Giving Bulls Hope for the VIX
Nasdaq
Stocks exploded higher and volatility expectation continued south last week, even after an initial negative reaction to the Federal Open Market Committee's (FOMC) decision to raise the fed funds rate by 25 basis points. Clearly, market participants are worried about inflation, but showed relief when Federal Reserve Chairman Jerome Powell said the Fed would utilize all tools to fight inflation, including raising rates more than they projected just a few months ago.
/jlne.ws/36y4WYU
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