| February 08, 2021 | | | | | Matt Raebel
Editor
John Lothian News | |
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$28,101/$300,000 (9.4%)
Scott Eisner, Robert Schaffer, Michael Shore, Mike O'Connor
| Observations & Insight | | | JJL: The CME Group has launched Ether futures, expanding its crypto derivatives offerings in this emerging asset class. Tim McCourt, CME Group's global head of equity index and alternative investment products, said in a press release, "The addition of Ether, along with our liquid Bitcoin futures and options, will create new opportunities for a broad array of clients, whether they are looking to hedge ether positions in the spot market or gain exposure to this cryptocurrency on a regulated derivatives marketplace."
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The Spread: Meme Wars
JohnLothianNews.com
I can honestly say that I didn't expect the hysteria around options traders on Reddit to go away in a week, but I am surprised at just how intensely the furor has persisted. Some are framing this as a "David and Goliath" moment, a point in history when amateur traders - many of them presumably unemployed because of the pandemic and jaded by the current economic system - struck out against wealthy hedge funds using Robinhood, a trading platform that prides itself on bringing financial inclusivity to Average Joe investors. The appropriateness of that analogy is debatable, but it has gained traction nonetheless.
Watch the video »
| | | | | | Lead Stories | | | JPMorgan Team Watching for Signs Inflation Is Riling Traders
Moxy Ying - Bloomberg
The link between stocks and bonds is the "most important indicator" in global markets right now and shows investors aren't yet worried about inflation getting out of control, according to strategists at JPMorgan Chase & Co.
The fact that short-term correlations between the two have not spiked, even as inflation expectations increase, suggests traders are not yet concerned about the negative impact of price rises, a team including Mixo Das wrote in a note Monday. A high-frequency measure of 72-hour correlation between S&P 500 futures and 10-year Treasury equivalents stood at minus 0.35 on Monday, up from minus 0.57 at the end of January, according to calculations by Bloomberg.
/bloom.bg/3aJ7TUR
Bonds Are Sending a Message: Inflation Is Coming
Randall W. Forsyth - Barron's
The stock market has been the path to wealth for generations of American families. That's even though only about half of them have shares; in fact, the richest 1% of U.S. households account for more than half of the equities ownership, according to Federal Reserve data. In most cases, the route that has been taken is to buy shares in companies. But for a few, the way has been to sell out.
bit.ly/3p1QUCu
How IBM Is Helping Send Palantir Stock Higher
William Canny - Barron's
Renaissance Technologies and Pershing Square, titans of the hedge fund investment world, have had a tumultuous start to the year according to an HSBC industry report, as some managers have scrambled to reposition amid a spike in market volatility.
/bit.ly/2LwBbO5
Social media sentiment ETF to launch in wake of Reddit rebellion
Steve Johnson - Financial Times
The Reddit rebellion might have died down for the moment, but New York asset manager VanEck is betting that there is long term value in listening to social media chat and is launching a social sentiment exchange traded fund.
The fund will invest in the stocks being most talked up on social media and appropriately enough, the company most likely to be sent "to the moon" by the new ETF is Virgin Galactic, Richard Branson's space tourism company, currently the largest stock in the underlying index.
/on.ft.com/39XcRhK
Alex Kearns died thinking he owed hundreds of thousands for stock market losses on Robinhood. His parents are set to sue over his suicide.
Tony Dokoupil, Michael Kaplan, Martin Finn and Cassidy McDonald - CBS News
20-year-old Alex Kearns took his own life last June mistakenly believing he'd lost nearly $750,000 in a risky bet on Robinhood, the stock-trading app where he started trading as a teenager.
His parents plan to file a lawsuit, first obtained by CBS News, on Monday accusing Robinhood of wrongful death, negligent infliction of emotional distress and unfair business practices.
/cbsn.ws/3aPpr1C
***** JB: It should be noted the allegation is Kearns was misinformed about his losses and, the family claims, had he sold all his positions, he might have even turned a small profit. Does that make Robinhood liable for his suicide? Guess we will find out.
| | | | | | Exchanges and Clearing | | | ICE to transition European Union Emission Allowance Contracts to ICE Endex in the Netherlands during the Second Quarter of 2021
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced today that it plans to transition ICE EUA Futures and Options and ICE EUA Daily Futures (collectively, "ICE EUAs") and ICE EUAA Futures ("ICE EUAAs") from ICE Futures Europe, ICE's London-based exchange, to ICE Endex, ICE's exchange in the Netherlands, during the second quarter of 2021, subject to the completion of regulatory processes. A more specific date for the transition will be announced in due course.
/bit.ly/3cZS3b4
CME Group Announces Launch of Ether Futures
CME Group
CME Group, the world's leading and most diverse derivatives marketplace, today launched Ether futures, further expanding its crypto derivatives offerings in this emerging asset class. "As institutional demand for transparent, exchange-listed crypto derivatives continues to increase, we are pleased to launch our new Ether futures contract," said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products. "The addition of Ether, along with our liquid Bitcoin futures and options, will create new opportunities for a broad array of clients, whether they are looking to hedge ether positions in the spot market or gain exposure to this cryptocurrency on a regulated derivatives marketplace."
/bit.ly/3aKpc87
Hong Kong bourse to take 7% stake in Guangzhou Futures Exchange
Reuters
The Hong Kong stock exchange operator will invest 210 million yuan ($32.5 million) in the Guangzhou Futures Exchange (GFE), saying on Friday it was the first equity investment in a Chinese futures exchange by a non-mainland Chinese investor. Hong Kong Exchanges and Clearing (HKEX) has in recent years looked to diversify away from cash equities into other products including derivatives, with mainland China linked products one focus. HKEX said in a statement it will have a 7% stake in GFE.
reut.rs/2OiXub2
ETFS Capital acquires ETF.com from Cboe Global Markets
Cboe
ETFS Capital, a strategic investment company, today announced it has acquired the business of ETF.com, one of the world's leading authorities on ETF news, analysis and education, from Cboe Global Markets (Cboe), a market operator and global trading solutions provider. ETF.com was founded in 2001 with a mission to deliver clear, independent and authoritative exchange traded fund (ETF) news, analysis and education to help participants make better investment decisions. When Cboe (previously Bats) acquired ETF.com in 2016, its goal was to help retail investors and advisors understand the benefits of ETFs through best-in-class educational content. Under Cboe's ownership, ETF.com expanded its multimedia business with webinars, events, videos and podcasts, growing its readership and solidifying ETF.com as a leading media platform serving the wider ETF industry.
/bit.ly/3tGOTir
Product Modification Summary for Clearing Firms, Bookkeeping Software Providers, ISVs
CME Group
Effective Sunday, February 7 for trade date Monday, February 8, please be advised that the Chicago Mercantile Exchange, Inc. (CME or EXCHANGE) decreased block minimum quantity in Lumber Futures and Options for submission for clearing on CME ClearPort.
/bit.ly/3cTuX5W
| | | | | | Regulation & Enforcement | | | GameStop Frenzy Is Tough Call for Regulators Focused on Transparency; Little imperative to act if no market manipulationâand little political will to rein in small investors
Paul Kiernan and Dave Michaels - WSJ
Washington was quick to react to the wild ride of GameStop Corp. GME 11.37% stock and the social-media-fueled trading frenzy that by some accounts pitted everyday people against Wall Street. Oversight committees in the Senate and House announced hearings, the Securities and Exchange Commission vowed to root out any wrongdoing and the Treasury Department convened a meeting of top financial regulators to discuss the volatility.
/on.wsj.com/3q76SwA
| | | | | | Technology | | | Nasdaq at 50: The company behind the tech-stock index reinvents itself as a financial-tech heavyweight
Shawn Tully - Fortune
When most people hear the name "Nasdaq," they think of the world's premier venue for buying and selling tech stocks. The Nasdaq exchange is where the cool kids of Silicon Valley and other points West - - from Jeff Bezos to Steve Jobs to Mark Zuckerberg to Elon Musk - - first offered their shares to all and sundry, and its fame grew as their fledgling companies mushroomed into the world's most valuable enterprises.
bit.ly/39W3JK9
| | | | | | Strategy | | | Opinion: These 12 lessons from the GameStop and AMC frenzy can help you make money trading stocks (or at least lose less)
Michael Sincere - MarketWatch
I can hear the cries from investors who racked up huge profits in GameStop or AMC Entertainment Holdings for a few hours or days, only to watch their gains evaporate.
This coordinated bull raid was initiated by thousands of retail investors on Reddit, a popular website forum. We heard stories of fortunes made and lost. The ones we didn't hear were from the folks in-between â small retail traders and investors who suffered thousands of dollars (or more) in losses.
/on.mktw.net/3p2oqsj
3 Options Strategies For Trading Rising Volatility
Gavin McMaster - See It Market
Market volatility picked up in recent weeks with the VIX Volatility Index rising from the low 20s to 37 before falling back to 21 again. Learning strategies for trading a rising volatility environment is the key to becoming a successful options trader. Let's look at 3 options strategies to trade when we are expecting volatility to rise.
bit.ly/3q7QP1y
(Podcast) Volatility Views 433: Can you Squeeze The VIX?
Volatility Views - Options Insider Radio Network
bit.ly/2Z0cDQo
| | | | | | Events | | | Registration is open! - FIA Boca 2021
FIA.org
/bit.ly/3qADb6G
Save the Date - April 28 & 29
The Options Industry Conference is Going Virtual in 2021
Join OCC and the options exchanges for the 39th annual Options Industry Conference, April 28-29, 2021. While the conference will be held virtually for the first time in history, the focus will continue to be the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
jlne.ws/2PPGgQh
Mini Index Options & Futures - Uses and Strategies
Cboe
Air Date: Wednesday, February 10, 2021
Start Time: 12:00 PM EST
Duration: 60 Minutes
Panelists include: Joe DeSipio, Arin Risk Advisors; Joe (JJ) Kinahan, TD Ameritrade; Daniel J. Powers, Vector Wealth Management; and Matt Moran, Cboe Options Institute.
This 60-minute webinar explores the uses of mini index options and futures as well as strategies for portfolio management.
bit.ly/36UCi1t
| | | | | | Miscellaneous | | | Trading Titan Don Wilson Has Advice for Yellen on Market Fixes
Nick Baker - Bloomberg
DRW founder details how he boosted trading during March chaos; Rise of firms like DRW has officials mulling fresh regulations
As Janet Yellen takes over the Treasury and mulls whether to overhaul rules governing financial markets, one of the world's biggest traders wants her to know that doing so could make it harder for his firm to step up during times of crisis -- as he says it did last year. Don Wilson's Chicago-based DRW, which emerged from the city's trading pits three decades ago, counts among the largest players in key derivatives markets like interest rates and equities. Because of its ultra-fast communications infrastructure, some lump it in -- unfairly, Wilson says -- with high-frequency traders, firms whose automated systems can flit in and out of positions in tiny fractions of a second. The knock against these companies has long been that their liquidity purportedly doesn't stick around when things get hairy.
/bloom.bg/2YUpfsD
GameStop's Reddit-driven surge exposed shocking market vulnerabilities - but overall stock gains will be unimpeded as profit growth surges, Goldman Sachs says
Ben Winck - Markets Insider
GameStop's recent rally highlights several weak spots in market functioning, Goldman Sachs said Friday. Still, the firm says investors need not worry.
The video-game retailer has stabilized around $70 after hordes of retail investors pumped up shares and subsequently fled the stock in January. The extraordinary price action prompted regulatory oversight, interest in Congress, and disruption to global trading platforms.
/bit.ly/2YW8Q6L
Is a new era of retail trading emerging after GameStop saga?
Robin Wigglesworth - Financial Times
Three centuries ago, the Sephardi merchant Joseph de la Vega wrote the first-ever book on a mysterious, disruptive new invention that was taking off in Amsterdam at the time. His evocative description of the stock market still resonates.
"This enigmatic business which is at once the fairest and most deceitful in Europe, the noblest and the most infamous in the world, the finest and the most vulgar on earth. It is a quintessence of academic learning and a paragon of fraudulence; it is a touchstone for the intelligent and a tombstone for the audacious," he wrote in Confusion of Confusions, first published in 1688.
/on.ft.com/2YSZsAU
GameStop Mania Was the Wrong Way to 'Democratize' Finance
Jon Sindreu and Rochelle Toplensky - WSJ
Was the Reddit mania a win for "democratizing" investment? Or was it a demonstration that too much people power in financial markets stokes dangerous bubbles? As with all democracy, it will depend on the outcome for those less powerful.
On Friday, GameStop closed at around $64, 87% below its peak on Jan. 28. Other companies recently targeted by individual investors online, such as AMC and BlackBerry , also deflated. The Treasury Department concluded on Thursday that "the core [market] infrastructure was resilient."
/on.wsj.com/3p0uFg3
SoftBank's Vision Fund Profit Undercut by Trading Losses
Pavel Alpeyev - Bloomberg
SoftBank Group Corp. reported a record profit in its Vision Fund as a surging stock market lifted the value of its portfolio companies, but founder Masayoshi Son wiped out a significant chunk of those gains with his controversial trading in derivatives. The Vision Fund reported a 844.1 billion yen ($8 billion) profit in the December quarter, surpassing record numbers set just a quarter earlier. A global rally in technology shares has boosted the value of SoftBank's stakes in publicly traded firms like Uber Technologies Inc. and paved the way for initial public offerings from the likes of DoorDash Inc.
bloom.bg/3tCsOSj
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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
Publisher | | | Sarah Rudolph
Editor-in-Chief
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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.
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