| January 05, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Options Discovery Episode 28: Understanding Market Movements to Make Options Trades; Matt Amberson, Principal and Founder of ORATS, Discusses This and More With JLN's Asma Awass.
JohnLothianNews.com
In this episode of Options Discovery, Asma Awass discusses the different stages of a market cycle. This episode includes a breakdown of the four different stages of a market cycle, what tools traders can use to analyze the markets, and some potential options strategies! Asma then sits down with Matt Amberson, the founder of Options Research and Technology Services, and he shares more insight on different market movements. You can check out ORATS here: https://orats.com/
Watch the video »
| | | | | | Lead Stories | | | Investors trim upside options bets as 'euphoric' US stock rally stalls
Saqib Iqbal Ahmed - Reuters
Investors are losing their taste for chasing U.S. stock gains in the options market and are eying downside protection as the S&P 500's rally wobbles at the start of 2024.
The S&P 500 (.SPX) fell 1.7% in the first three trading days of the year, its worst stumble out of the gate since 2016. That comes after a surge in which the S&P 500 rose 11% during a dizzying fourth-quarter rally. The index gained 24% in 2023.
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Trader Makes Massive Bet Treasuries Will Get Slammed After Jobs Report
Edward Bolingbroke - Bloomberg
The options market for US Treasuries was abuzz Thursday following the emergence of a large bearish wager that Friday's jobs report will trigger the biggest backup in benchmark yields in more than nine months.
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Navigating "Too Much of a Good Thing" via Buffered ETF Fund-of-Funds
Marc Odo, Client Portfolio Manager, Swan Global Investments - Cboe
"Too much of a good thing can be wonderful." -Mae West
With apologies to Ms. West, too much of a good thing can also be overwhelming. Since 2018 the market has become saturated with buffered or defined outcome ETFs. In 2023 alone over 40 new buffer funds were made available.
Clearly investors have embraced the basic value proposition of a buffered ETF: if the market is up over a one-year period, the ETF should participate in gains up to (but not beyond) a predetermined breakpoint. If the market is down, the ETF's put options should shelter the ETF from losses, up to a point. If the market is down by a larger amount, the investor willingly accepts that far "left tail" risk. Given the uncertainty surrounding equities, bonds, and the global economy people have been flocking to relative certainty of buffered ETFs.
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Traders Quickly Revise Bets On Fed Rate Cuts
Eric Wallerstein - The Wall Street Journal
The evolving market reactions to two pieces of economic data on Friday showed why investors say they expect more volatility this year.
The U.S. jobs report hit stock and bond prices before the open Friday morning, in part because the hoped-for signs that inflation was continuing to cool down were mixed.
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Climate refugees, zero-day options and the wrong long; A look at the investment risks that just missed our annual list
Rob Mannix - Risk.net
Risk.net published its Top 10 investment risks for 2024 earlier this week - covering threats ranging from geopolitical hazards to a slump in private markets. What about the risks, though, that just missed the cut - those that investors considered meaningful, but for which the consensus of opinion was narrower (at least for the time being)?
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Outlook 2024: Dave Howson, Cboe Global Markets
Anna Lyudvig - Traders Magazine
What were the key theme(s) for your business in 2023? In 2023 we celebrated 50 years of Cboe and listed U.S. options and launched a reinvigorated brand identity to reflect our new global reach and ambitions. It was a momentous year following a years-long period of transformation and global integration for Cboe. As we enter our next phase of growth, we remain focused on solidifying our position as a trusted global exchange leader and delivering innovative solutions that drive the trading ecosystem forward across the globe.
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Citadel and Millennium outpace smaller hedge fund rivals; Big-name managers post double-digit returns as costs of talent war weigh on some smaller players
Harriet Agnew and Costas Mourselas and Ortenca Aliaj - Financial Times
Big-name managers such as Citadel and Millennium outpaced rivals in the world's hottest hedge fund strategy last year, illustrating how an arms race for talent and technology is taking a toll on smaller players in the sector. Ken Griffin's Citadel gained 15.3 per cent in its flagship Wellington fund in 2023, according to people familiar with the numbers. It told clients in December that it planned to return $7bn in profits to investors and said it would start 2024 with $58bn in assets.
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Currency Volatility Rises in Asia as Year's First Elections Near
Tania Chen and Matthew Burgess - Bloomberg
Asia's currency markets are growing increasingly jittery as the first presidential elections of a politically eventful year are about to take place.
An index of expected volatility in the Taiwan dollar over the next two weeks â which now includes the presidential vote on Jan. 13 â jumped to the highest level in more than a year this week. A gauge that measures anticipated volatility of the Indonesian rupiah before a similar vote in February is also increasing.
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Bitcoin Edges Lower as Traders Await SEC Bitcoin ETF Move
Emily Nicolle - Bloomberg
Bitcoin stumbled as traders braced for an upcoming decision by the US Securities and Exchange Commission on whether to approve an exchange-traded fund tied directly to the world's largest cryptocurrency.
The token fell as much as 4.3% to $42,563 in New York on Friday, before paring the decline. Bitcoin had risen as high as $45,911 earlier this week, but crashed more than 9% on Wednesday as leverage built up in the market and investors grew nervous about the SEC's impending decision. Other cryptoassets generally fared worst, with Ether, Solana's SOL and Ripple's XRP all down between 2% and 7%.
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Do hedge funds make portfolios more or less risky?
Editorial Team - UBS
Hedge funds are seen as too risky by some. Investors must be able to bear certain risks not always experienced in stocks and bonds. But adding hedge funds to a portfolio can reduce risks to overall wealth.
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| | | | | | Exchanges | | | Cboe Global Markets Reports Trading Volume For December And Full Year 2023
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today reported December and full year 2023 trading volume statistics and projected rate per contract/net revenue capture for the fourth quarter of 2023 across its global business lines. The data sheet "Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report" contains an overview of certain December and full year 2023 trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
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Nodal Exchange achieves record traded volume in power and environmental markets in 2023
Nodal Exchange
Nodal Exchange announced today that it achieved record trading volumes in 2023 in both power and environmental markets. Nodal achieved a record 2.7 billion MWh power futures volume traded in 2023, representing 15% growth over 2022. Nodal is the market leader in North American power futures having the majority share of the open interest with a record 1.3 billion MWh as of end of year 2023. The open interest represents over $107.6 billion of notional value (both sides). Nodal, with its collaborator IncubEx, continued to grow trading in the environmental futures and options markets. Nodal achieved a record 344,582 lots of environmental futures and options volume traded in 2023, representing 23% growth over 2022. Nodal US environmental futures and options open interest at year end 2022 was 278,110 lots, up 25% from the end of 2022.
/jlne.ws/3vmIrCG
Full year and December 2023 figures at Eurex; Eurex with a 5 percent increase in number of traded contracts and 20 percent rise in interest rate derivatives in December
Eurex
OTC clearing volumes at Eurex continued their overall upward trend Volumes in Eurex Repo's GC Pooling market grew by 142 percent in December y-o-y Eurex, Europe's leading derivatives exchange, ended the year with a 5 percent increase in contracts traded in December 2023 compared to December 2022, led by interest rate derivatives - with a 20 percent increase. Overall volumes in 2023 decreased by 2 percent to 1,915.1 million contracts and index derivatives decreased by 9 percent while interest rate derivatives grew by 6 percent.
/jlne.ws/47ojC6A
EEX Group Monthly Volumes - December 2023
EEX Group
EEX Group reports its December 2023 volumes with the following highlights: The total trading volume on global power markets of EEX Group increased by 73% compared to the same month last year, with a monthly volume of 775.4 TWh. European power spot markets reported a +25% growth, while European power derivatives volumes more than doubled YoY, reaching a volume of 545.2 TWh. EEX saw strong growth rates across the majority of markets, with German, French, Italian and Greek Power Futures reporting 3-digit growth compared to December 2022. In addition, 13 December marked the highest daily volume of 2023 on the EEX power derivatives markets, with 42.1 TWh traded.
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TMX Group Consolidated Trading Statistics - December 2023
TMX Group Limited
TMX Group Limited today announced December 2023 trading statistics for its marketplaces - Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha), including Alpha-X and Alpha DRK, and Montréal Exchange.
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ASX Group Monthly Activity Report - December 2023
ASX
Attached is a copy of the ASX Group Monthly Activity Report for December 2023.
Release.
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NYSE US Exchanges to Close in Observance of Martin Luther King Jr. Day
NYSE
In observance of Martin Luther King Jr. Day, the New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, NYSE National, NYSE American Options, NYSE Arca Options, and NYSE Bonds markets will be closed on Monday, January 15, 2024.
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| | | | | | Strategy | | | In This Market, Sustainable Gains Matter More Than Home Runs
Scotty C. George - Barron's
Today's investment landscape has been punctuated by the impact of Covid and, to a lesser degree, the monetary and fiscal aftereffects of the response. A profound period of calamity and psychological despair nearly obliterated all of the financial gains of the previous generation. Unfortunately, we now know that crisis is metaphorically and literally but a sneeze away.
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Midcap Stocks Are Often Ignored. They Shouldn't Be.; Advocates say these companies offer financial stability, growth potential and industry diversification, and could outperform in 2024
Dan Weil - The Wall Street Journal
Midcap stocks are like the middle children of the investing world, sometimes ignored by investors who focus on their large-cap and small-cap siblings. But some market professionals say that these midcap-shunning investors are making a mistakeâand that now may be a good time to buy.
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3 Iron Condor Trade Ideas For January 5th
Gavin McMaster for Barchart - Nasdaq
Volatility is on the rise which could mean it's a good time to be on look lookout for Iron Condor trades.
An iron condor aims to profit from a drop in implied volatility, with the stock staying within an expected range.
/jlne.ws/4aHyNut
| | | | | | Miscellaneous | | | Why the Strength of the Dollar Matters So Much for Stock Investors; As U.S. companies earn more from overseas, the greenback's performance has an outsize impact on quarterly resultsâand often the stock market's direction
Simon Constable - The Wall Street Journal
There are a lot of things to watch when investing in stocks. But some people forget to keep an eye on the dollar.
"It used to be that only people investing in overseas companies had to worry about the dollar," since companies with foreign nondollar earnings were exposed to currency movements, says Sam Stovall, chief investment strategist at Charlottesville, Va.-based CFRA Research. "The prices of foreign stocks could get minimized or maximized by the volatility of the dollar."
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Tepper's $2 Billion Hedge Fund Payday Marred by NFL Meltdown; The founder of Appaloosa Management has struggled running the Carolina Panthers even as bets on tech stocks boost his personal fortune.
Tom Maloney and Katherine Burton - Bloomberg
David Tepper went all-in on two trades last year. One quietly helped make him about $2 billion. The other has gone south in a very public way. At Appaloosa Management, his $17 billion hedge fund, Tepper loaded up on tech stocks just as the artificial intelligence boom was picking up steam. That, along with other bets, powered a roughly 20% return for the firm, pushing his fortune to $19.4 billion, according the Bloomberg Billionaires Index. It's been a different story in the National Football League. Outside the world of finance, Tepper, 66, is best known as the owner of the Carolina Panthers, who are wrapping up their sixth straight losing season. Tepper, in quintessential Tepper fashion, went big, mortgaging the team's future to get University of Alabama quarterback Bryce Young, a massive bet he hoped would transform the franchise into contenders. Instead, it has won a league-worst two games.
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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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