| October 01, 2018 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
|
| | | | Observations & Insight | | | OCC Cleared Contract Volume up 8.7 Percent in September
Press Release
OCC, the world's largest equity derivatives clearing organization, announced today that total cleared contract volume in September reached 365,152,938 contracts, up 8.7 percent compared to September 2017 volume of 335,867,813. OCC's year-to-date average daily cleared contract volume is up 18.6 percent with 20,209,877 contracts compared to 17,038,958 contracts in 2017.
Options: Overall exchange-listed options volume reached 358,572,914 contracts in September, up 10.3 percent from September 2017. Equity options volume reached a total of 322,566,988 contracts, a 14.3 percent increase from September 2017. This includes cleared ETF options volume of 116,971,793 contracts last month, a 4.6 percent decrease compared to September 2017 volume of 122,563,903 contracts. Index options volume was down 16.2 percent with 36,005,926 contracts in September, but year-to-date average daily volume was up 9.1 percent from September 2017.
/jlne.ws/2QoXKB7
****SD: The options train just keeps chugging along this year.
| | | | | | Lead Stories | | | Investors Say They Were Harmed by Manipulation in Volatility Products
Gunjan Banerji - WSJ (SUBSCRIPTION)
A group of investors filed a complaint against Cboe Global Markets Inc. CBOE -0.21% on Friday, alleging that they experienced losses because its popular volatility products were manipulated.
The complaint alleges that market players consistently manipulated prices of derivatives tied to the VIXÂa widely watched volatility measure that is also known as the Cboe Volatility Index. The investors claim that Cboe, which operates the largest options exchange in the U.S., knew about the activity, according to the complaint filed in the Northern District of Illinois. The proposed class-action lawsuit needs a judge's ruling in order to proceed.
/jlne.ws/2zIYLOF
****SD: Is it just me or does this suit seem a bit late to the party?
European banks weigh leaving UK derivatives market; Concern rises among executives about access to clearing houses after Brexit
Philip Stafford, Stephen Morris and Jim Brunsden - Financial Times (SUBSCRIPTION)
European banks are considering whether to begin closing out their trillions of pounds' worth of derivatives positions in London in the coming months as the UK struggles to finalise an agreement on leaving the EU.
/goo.gl/gpzjJN
Chicago's sharp traders are natural hunters in wild crypto markets; Volatility is no bad thing for those with an eye on the long term
Gregory Meyer - Financial Times (SUBSCRIPTION)
The prices of digital currencies have collapsed this year. But Chicago's proprietary trading industry is deepening its exposure to the wild crypto market nonetheless.
/goo.gl/h4DSbZ
****SD: Who cares about catching falling knives if you can trade based off expectations of the size of the knife, how fast it will fall and how far it will fall?
Battle intensifies over the costs of using US market data
Nicole Bullock - Financial Times (SUBSCRIPTION)
A new front is opening in the long-running battle between US stock exchanges and their customers over the cost of trading data, the lifeblood of markets.
The rise of electronic and automated trading, spread across dozens of venues, has meant accurate and timely data is crucial.
/jlne.ws/2QpitEZ
Ten years on, fresh trading risks seem to be emerging
Philip Stafford yesterday - Financial Times (SUBSCRIPTION)
Ten years on from the height of the financial crisis it is tempting to look back at the havoc precipitated by the collapse of Lehman Brothers and think we have come a long way.
/jlne.ws/2zIQASG
****SD: Doesn't the potential for new risks always come hand in hand with innovation?
| | | | | | Exchanges and Clearing | | | TABB Group considers implications if OCC capital plan is not re-approved
Brian Bollen - Securities Lending Times
TABB Research Group has published a note considering the implications for the exchange-listed options market should the US Securities & Exchange Commission (SEC) not re-approve the OCC's capital plan for the fourth time.
The note, OCC's Capital Plan: The Value of a Bird in the Hand, reviews the history and structure of the plan to date in some detail. It broadly approves the success of the plan in enabling OCC to build up a capital buffer from a level that was previously 'woefully deficient'.
The most recent payout under the plan was a refund of $78.7 million to clearing members, paid on 14 September.
/jlne.ws/2DHgZEt
****SD: For Russell Rhoads' piece in Tabb from September 20, go here.
Proposal to amend its fee incentive program for Lead Market-Makers in VIX during Global Trading Hours
Cboe
/jlne.ws/2QnLVel
****SD: Cboe proposes to increase the monthly compensation pool for VIX lead market makers (LMMs) from $15k to $20k due to the increased burden on LMMs streaming liquidity during global trading hours.
Cboe and Nasdaq Capture 73% of Options Market: Tabb Group
John D'Antona Jr. - Traders News
It's a tale of two exchanges.The two largest exchange groups, Cboe and NASDAQ, have captured 73.2% of options volume in 2018, but the three smaller exchange operators have gained market share. NYSE's share is up 2.8%, to 16.5%; MIAX has gained 2.7%, to 8.2%; and BOX's share is up 0.01%, to 2.2%.
/jlne.ws/2QlzlMB
CME Group and Nasdaq Extend Exclusive Nasdaq-100 Futures License Through 2029
CME Group
CME Group and Nasdaq today announced a ten-year extension of CME Group's exclusive license to offer futures and options on futures based on the Nasdaq-100 and other Nasdaq indexes, through 2029. As the world's leading and most diverse derivatives marketplace, CME Group operates the largest equity index futures complex in the world. Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.
/jlne.ws/2QoMbdb
Mapping Clearing Interdependencies and Systemic Risk
Kimmo Soramaki and Samantha Cook - MarketVoice
Global regulators are becoming increasingly aware of the importance of market infrastructures in the systemic risk topography. In particular, regulators are recognizing the need to understand the interconnections between clearinghouses and their members, which have the potential to transmit the shocks from a default or operational incident in unexpected ways. In this article, two experts on network theory show how this type of data analytics can provide regulators and market participants with a better understanding of the connections within the global clearing system.
/jlne.ws/2QjFrx5
Thomas Book: "We want to further increase fairness in pricing" (part II)
Eurex Exchange
In part 2 of this interview with the Börsen-Zeitung, he describes the process of dealing with open access as required by MiFID, the structural changes after Brexit and Eurex Clearing's Partnership Program.
/jlne.ws/2zJ6896
****JB: If you missed "Part I" you can read it here
Eurex launches functionality to strengthen order book liquidity
Eurex Exchange
Eurex has structured a market model called Passive Liquidity Protection, which provides benefits to market participants who provide liquidity in the order book.
/jlne.ws/2zITFC6
EEX Achieves Record Volumes In German, Austrian, Italian And Spanish Power Futures - Exchange Also Posts Significant Increases Across All Other Asset Classes In Portfolio
Mondovisione
In September 2018, the European Energy Exchange (EEX) increased volumes on its power derivatives markets by 42% to 377.1 TWh (September 2017: 265.8 TWh) and, as a result, reached the highest monthly volume since November 2016. In particular, record volumes in Phelix-DE Futures (232.8 TWh) and Phelix-AT Futures (0.5 TWh) as well as in Futures for the Italy (62.1 TWh) and Spain (12.2 TWh) contributed to this development. Furthermore, volumes in power options increased by 60% to 12.2 TWh (September 2017: 7.7 TWh).
/goo.gl/NTXJXT
****SD: It also coincides with a sharp uptick in media coverage of EU power trading.
Nasdaq ISE Updated Pricing Effective October 1, 2018
Nasdaq Options Trader Alert
Effective Monday, October 1, 2018, pending filing with the SEC, the following changes will apply to Nasdaq ISE.
/jlne.ws/2QpyrPr
| | | | | | Regulation & Enforcement | | | CFTC Chairman Giancarlo Releases Cross-Border White Paper
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo released a white paper titled "Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S. Regulation." Based on the principles set forth in this white paper, Chairman Giancarlo intends to direct the CFTC staff to put forth new rule proposals to address a range of cross-border issues in swaps reform.
/goo.gl/CG8bsP
Big U.S. Banks Face Increase in Attempted Cyberattacks
Emily Glazer and Maureen Farrell - WSJ (SUBSCRIPTION)
Some large U.S. banks have seen an uptick in attempted cyberattacks in recent weeks, according to people familiar with the matter, at a time when federal officials are stepping up warnings to banks about cyberthreats.
/jlne.ws/2QlGJrj
| | | | | | Strategy | | | After Another Quarterly Loss, Is Worst Over for Commodities?
Marvin G Perez and Susanne Barton - Bloomberg (SUBSCRIPTION)
Bloomberg commodity gauge posts third straight quarterly loss; Goldman, JPMorgan see prices bottoming in many raw materials
Commodities just posted the longest losing streak in more than three years, and analysts and investors are giving conflicting signals over whether the worst is over.
/jlne.ws/2QngUqN
History suggests the S&P 500 is about to begin its strongest stretch
Keris Lahiff - CNBC
Wall Street begins the home stretch of the year in good stead.
The S&P 500 ended the third quarter Friday with its best performance since 2013, and all three benchmark indexes closed out September one rally from record highs they set earlier in the month.
October has a reputation for monumental crashes such as those in 1928 and 2008, but historical data back up a push to new heights, says Ryan Detrick, senior market strategist at LPL Financial.
/jlne.ws/2Iywrla
What Always Matters Most
Steve Seras - OCCAM (SUBSCRIPTION)
We find ourselves surrounded by mixed signals and conflict. While this has been the very definition of the proverbial wall of worry climbed by bull markets it is also a reminder of how very high the wall has become.
/jlne.ws/2QpzTBn
Crude Oil Awaits Sanctions On Iran- Volatility Ahead
Andrew Hecht - Nadex
While many industrial commodities prices have declined under the weight of a stronger dollar since February and the ongoing trade dispute between the U.S. and China, the price of crude oil has quietly continued to make higher lows and higher highs. The active month November NYMEX futures market traded to a high of $73.73 on September 28 as it continues to forge to greater heights. December Brent crude oil was over the $80 per barrel level, a new high for 2018 and the highest level for Brent since 2014.
/jlne.ws/2QlgKQG
ETF Risks: What Can Go Wrong With ETFs And What to Do About It?
Lawrence Carrel - Investor's Business Daily
With $4 trillion in assets, exchange traded funds have become important parts many investors lives, but are there ETF risks that put those assets in jeopardy? ETFs have been called by some "weapons of mass destruction" because they've been blamed for causing stock market flash crashes and some ETFs have "blown up," causing momentary market panics.
/jlne.ws/2QmF1pQ
Brexit Is a Buy for the Brave
Jon Sindreu - WSJ (SUBSCRIPTION)
Brexit is the kind of risk stock investors hate: Unpredictable, noisy, irrational. Therein may lie the opportunity.
/jlne.ws/2QlrMFA
****SD: First thing I thought was, "There is a thin line between bravery and stupidity."
| | | | | | Miscellaneous | | | GE's $500,000,000,000 Market Loss Is Like Erasing Facebook
Rick Clough - Bloomberg (SUBSCRIPTION)
On August 28, 2000, Apple's hottest product was a candy-colored computer, Donald Trump was a New York real estate mogul and General Electric Co. was worth some $600 billion.
Apple and Trump have gone on to greater things. GE? It's on the verge of a staggering milestone: a half-trillion dollars in market value wiped out since that all-time high 18 years ago. On Monday the company made the surprise announcement that it was replacing Chief Executive Officer John Flannery, who has been unable to stem the slide in the company's shares after just more than a year in the job.
/jlne.ws/2zIekWU
Cannabis Short Interest Soars Amid Accusations of Naked Shorting
Kristine Owram - Bloomberg (SUBSCRIPTION)
Short interest in high-flying cannabis stocks surged 52 percent in the third quarter, and some investors say the wild price swings indicate there may be even more activity than the data reflect.
/jlne.ws/2Qp58MQ
****JB: Not really an options story but I liked the title too much to let it pass unnoticed.
Elon Musk's Volunteer Army Out in Force at Buzzing Tesla Outlets
Dana Hull - Bloomberg (SUBSCRIPTION)
Priority number one for the embattled Elon Musk going into the weekend was striking a deal with federal regulators -- a task he achieved Saturday by agreeing to pay a hefty fine and step down as Tesla Inc.'s chairman.
/jlne.ws/2zJpz1C
****SD: Now back to the real question - can Tesla make enough cars?
| | | | | | | | | JLN Options is sponsored by: | | | | | | | | | | | | | | | | | | |
|
|
| | | |
| | | | 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
Managing Editor
| | | Jeff Bergstrom
Editor
| | | Spencer Doar
Editor
| | |
|
|
Disclaimer: All John Lothian Newsletters, JohnLothianNews.com, MarketsWiki.com and MarketsReformWiki.com are products of John Lothian News, a division of John J. Lothian & Company, Inc. The opinions expressed in all John J. Lothian & Company, Inc. publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers. Futures and options trading involve risk. Past results are no indication of future performance. Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any website or newsletter content.
© 2017 John J. Lothian & Company, Inc. All Rights Reserved. |
|
|
