| February 17, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | The video for the 40th Annual Options Industry Conference is out. You can watch it on the conference website HERE. Registration for the conference is open.
| | | | | | Lead Stories | | | Liquidity worries resurface as implied volatility in U.S. Treasuries spikes
Davide Barbuscia - Reuters
A measure of expected volatility in U.S. Treasuries spiked this week to a nearly two-year high, reflecting investor concerns that rate hikes and geopolitical worries will translate into sharper price swings.
The ICE BofA MOVE Index hit a reading of 102 on Monday, its highest since March 2020, before easing back a little.
/jlne.ws/34MowA9
2022 Market Volatility Demands a Greater Premium on Liquidity
Kirsten Wegner - Modern Markets Initiative
A day after Facebook reported earlier this month that its streak of user growth had come to an end, its parent company's stock plunged over 26% in its biggest one-day drop ever, losing more than $230 billion in market value and triggering Wall Street's worst drop in close to a year. That followed a January where Wall Street's fear gauge, the Cboe Volatility Index, was up 75 percent for the month.
/jlne.ws/3uWpnJo
The rise of crypto on Wall Street could end up triggering another financial crisis, global watchdog warns
Hamza Fareed Malik - Business Insider
Wall Street institutions' growing connections to crypto markets could threaten financial stability and cause a credit crunch-style financial crisis, global regulators have warned.
The Financial Stability Board said "ongoing vigilance" of institutional investors such as big banks and hedge funds is needed as they deepen their involvement in the $1.9 trillion crypto market.
/jlne.ws/3JAbVPj
World's Most-Important Oil Price Tops $100, Signals More to Come
Alex Longley - Bloomberg
Forget the futures market, the world's most important oil price just smashed through $100 a barrel with every sign it is going to push higher.
Dated Brent, the price of cargoes bought and sold in the North Sea, reached $100.80 a barrel on Wednesday for the first time since 2014, according to S&P Global Platts, the company that publishes the marker. Price spreads in the futures market are pointing to one the tightest markets ever.
/jlne.ws/3LKPFnU
Most traders believe meme stocks will impact markets: Charles Schwab
Thomas Hum - Yahoo Money
Having been around a year since GameStop's (GME) stock gained notoriety through the infamous short squeeze, "meme stocks" continued their rise to prominence throughout 2021 and remain at the forefront of investors' minds today. According to data collected in a recent Charles Schwab (SCHW) Trader Sentiment Survey, the majority of investors believe meme stocks still have the ability to move markets this year.
"When asked if meme stocks are likely to have an impact on markets in 2022, 65% of traders said it's likely â with 40% saying somewhat likely and 25% saying very likely," the survey reads. "If there is another meme stock trading event this year, 30% of traders indicate an appetite to participate."
/jlne.ws/3LFDJ6E
| | | | | | Exchanges | | | Risk Magazine Names OCC Clearing House of the Year
OCC
OCC, the world's largest equity derivatives clearing organization, has been honored as the Clearing House of the Year in 2022 by Risk Magazine. "This award highlights the importance of OCC's role in providing resiliency, stability and integrity to financial markets and the broader economy," said Craig Donohue, OCC Executive Chairman. "We are proud of this recognition and will continue to strive for excellence while fulfilling our commitment to delivering world-class clearing, settlement and risk management services to our participant exchanges, clearing member firms and market participants, and to serve as the foundation for secure markets."
/jlne.ws/33tEVc1
CME Group Announces Senior Leadership Changes
CME Group
CME Group, the world's leading derivatives marketplace, today announced changes to its management team structure to position the company for long-term success.
"CME Group has a proven history of evolving our business to meet changing market demands and opportunities," said Chairman and Chief Executive Officer Terry Duffy. "This is an exciting and dynamic time for financial markets. We are fortunate to have built a strong leadership team, each person with a track record of working successfully across our company. As we continue to transform our business, we are restructuring our management team to further sharpen our focus and enhance our ability to achieve our strategic priorities for our clients, shareholders and employees."
The new management team structure is detailed below, with all positions reporting to Duffy unless otherwise noted:
/jlne.ws/3JDcEzo
| | | | | | Regulation & Enforcement | | | Morgan Stanley's role in Archegos collapse sped up block trade probes
Mehnaz Yasmin in Bengaluru and Chris Prentice - Reuters
Morgan Stanley's (MS.N) role in the collapse of Archegos Capital Management deepened a probe by U.S. authorities into Wall Street's lucrative market for block trades, Bloomberg News reported, citing people with knowledge of the matter.
The investment bank lost nearly $1 billion last year when Bill Hwang's Archegos failed to meet margin calls, forcing several investment banks including Morgan Stanley to attempt recouping losses by liquidating shares and assets.
/jlne.ws/3LB0lW1
| | | | | | Technology | | | Innovation in technology: International Swaps and Derivatives Association; Risk Awards 2022: Isda takes a fintech turn with quant analysis tool Perun, leveraging data standards legacy
Risk.net
International Swaps and Derivatives Association (Isda) Standardised approaches Capturing variability in capital calculations, a problem that has vexed regulators and banks alike, has been resolved by a natty piece of kit from an unlikely candidate. The kit in question - a quantitative engine named Perun - is among the latest tech innovations to spin out of the International Swaps and Derivatives Association, a once-traditional trade body that these days looks increasingly like a fintech.
/jlne.ws/36biLME
****** Winning for a "natty piece of kit from an unlikely candidate" is ISDA! ~JJL
| | | | | | Moves | | | William Hult Named as Tradeweb CEO from January 2023
MarketsMedia
The Board of Directors of Tradeweb Markets Inc., a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, announced a number of changes to the Board and succession plans for its executive leadership.
Tradeweb co-founder and Chief Executive Officer Lee Olesky has been elected Chairman of the Board effective February 11, 2022, and will retire as CEO effective December 31, 2022. The Board elected Tradeweb President William Hult to be the company's next CEO, effective January 1, 2023.
/jlne.ws/3oYMwad
| | | | | | Strategy | | | How to Invest: Protecting Your Portfolio From a Volatile Market
Charlie Wells, Claire Ballentine and Suzanne Woolley - Bloomberg
Investors knew this year would be different. But lately, they've been getting a lesson in just how different it is shaping up to be.
Most analysts expected some action on interest rates from the U.S. Federal Reserve in 2022 â but maybe not the five rate hikes they're now pricing in. Inflation was clearly driving upwards, but we're seeing much higher, more consistent price increases. People have been moving their money away from growth-led tech companies and toward those in the value category, or stocks considered underpriced. And banks are now forecasting slower growth in the months ahead. All this is creating a wave of volatility not seen since the start of the pandemic era.
/jlne.ws/33tuCEZ
Opinion: Stay bearish on the S&P 500
Lawrence G. McMillan - MarketWatch
The S&P 500 index continues to be quite volatile, and its chart retains a negative bias. That's because the chart is in a downtrend (blue line on the accompanying chart), and the "modified Bollinger Bands" (mBB) and the short-term moving averages are sloping downward. There is short-term support at last week's lows - near 4360, with stronger support below that in the 4200-4300 area. As for resistance, that is at 4600.
For this reason, we continue to recommend a "core" bearish position, and then one can trade individual signals around that "core" position. A strong move above 4600 would be required to change the S&P chart's bearish status.
/jlne.ws/34JQZ9U
| | | | | | Miscellaneous | | | Whip-sawed cryptocurrency traders are seeking therapy for help with addiction
Gabrielle Bienasz - Business Insider
Some therapists are seeing a wave of clients seeking help for addiction to buying and selling cryptocurrency and crypto-related mental health issues, according to Quartz.
Cryptocurrency made its first big appearance in Super Bowl commercials this year, notably trading platform Coinbase's, which drove so much traffic to the site that it crashed. Currencies like Bitcoin, ethereum have minted millionaires and even spurred a series of robberies and kidnappings targeting cryptocurrency and NFT owners.
/jlne.ws/3LH0B5B
Does Crypto Have Value? A Bitcoin Pioneer Spelled It Out Years Ago.
Leah McGrath Goodman - Institutional Investor
In May 2012, Autumn Radtke, chief executive of the fledgling virtual currency exchange, First Meta, gave a remarkable talk on how otherwise intelligent people began reaching for their wallets to shell out for code.
The event where she spoke had nothing to do with Wall Street or investing. Rather, it was a game industry summit in Suntec City, Singapore. Walking the audience through what she warned would, for most, be an "exotic" journey, Radtke explained how the trading of virtual assets didn't spring from a garage in Silicon Valley or a basement on the East Coast, but from one of the earliest metaverses: online games played by thousands, even millions, of people â known as "massively multiplayer online games." She described how trading virtual assets began in the 1990s with players' game accounts as they competed for "wealth, access, credentials, status inside a game."
/jlne.ws/3oWQCQ2
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