| May 07, 2018 | | | |  | Spencer Doar
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
The Spread - Amelia Island - 5/4
JohnLothianNews.com
It took 30 minutes of Spencer messing up his lines for us to get 2 minutes of commentary about the Options Industry Conference which was held in Amelia Island, Fla. from May 2 through May 4. Next year's conference will be hosted by MIAX and held in... Miami!
Watch the video here »
| | | | | | Lead Stories | | | Fund says Wells Fargo unit worsened 'vol-mageddon' losses -court filing
Trevor Hunnicutt - Reuters
A Chicago fund manager that suffered catastrophic losses in a market plunge earlier this year has blamed the actions of its broker, a Wells Fargo & Co unit, according to court documents filed on Wednesday.
/jlne.ws/2FSAwNX
****SD: Missed this one earlier.
OCC's Morrison on combating the cyber threat to clearing; Cyber security chief eyes analytics and machine learning to help anticipate - and defend against - breaches
Dan DeFrancesco - Risk.net (SUBSCRIPTION)
Mark Morrison's resumé speaks for itself, and that's fortunate considering most of his previous employers can't do it for him. The chief information security officer at the Options Clearing Corporation has an ideal CV for cyber security, with stints at the US Department of Defense, Office of the Director of National Intelligence, Defense Intelligence Agency, and National Security Agency.
/jlne.ws/2jAZ997
****SD: If you don't have Risk.net access, check out our piece from the end of last year - Cybersecurity is very, very tough: How a SIFMU's cyber chief sees the threat.
Barron's Alum Steve Sears' Next Act: Helping Advisors
Steve Garmhausen - Barron's
It looks like my old Barron's colleague Steven Sears is finally making an honest living: He's joined the startup world, with an eye toward helping financial advisors.
/jlne.ws/2jzELFm
****SD: The accompanying picture is misleading - Sears rocks a beard now.
Market consolidation and return of volatility boost Virtu, Cboe
Philip Stafford and Nicole Bullock - Financial Times (SUBSCRIPTION)
Industry consolidation and a long awaited return of volatility helped to lift the results of high-speed market maker Virtu Financial and exchange operator Cboe Global Markets at the start of 2018.
Virtu reported what it called "an outstanding" first quarter as it benefited from its $1.4bn purchase of rival KCG Holdings. Similarly, Cboe cited the contribution of the legacy Bats business it bought in 2016 as a contributor to results in the period.
/jlne.ws/2JZxY32
The Warren Buffett Put Trade
Russell Rhoads, CFA - Cboe
A few years ago, I was asked to co-author the study guide that accompanies the 3rd version of The Warren Buffett Way. While doing research for this project I came across a discussion of a handful of index put options that Berkshire Hathaway had sold between 2004 and 2008. Every year when the Berkshire Hathaway annual report comes out, I dig in to see how these trades are doing. Here's the update as of the end of the first quarter 2018.
/jlne.ws/2JZxGcq
****SD: If Buffett called derivatives WMDs and uses them, does that mean he's actually trading bitcoin, too?
Cboe says VIX just needs more liquidity as manipulation rumblings continue
Rachel Koning Beals - MarketWatch
SEC and CFTC are taking a look, Bloomberg reported this week
That's the stance taken Friday by the Chicago Board Options Exchange, part of Cboe Global Markets Inc. as allegations its widely used VIX stock-market volatility benchmark is manipulated continued to swirl.
/jlne.ws/2rqqYWa
****SD: In case you missed Friday's news.
Volatility Strikes Back
Sergei Antoshin, senior economist, IMF via Seeking Alpha
The bouts of volatility in early February and late March that spooked investors were confined to equity markets. Nevertheless, they illustrate the potential for sudden market moves to expose fragilities in the financial system more broadly.
/jlne.ws/2HRxqQp
| | | | | | Exchanges and Clearing | | | US judge scraps trial into CME Group's defence of home market
Philip Stafford and Joe Rennison - Financial Times
?A US judge has cancelled a planned trial into the practices of CME Group defending its home turf against rivals, throwing into doubt whether a 14-year-old lawsuit alleging the world's largest futures exchange violated antitrust laws is heard in public.
/jlne.ws/2roZeB1
HKEX Monthly Market Highlights
Mondovisione
...The average daily turnover of futures and options for the first four months of 2018 was 1,304,497 contracts, an increase of 71 per cent when compared with the 763,773 contracts for the same period last year.
/jlne.ws/2HXIlHY
Cboe Global Markets Reports April 2018 Trading Volume; Year - to - date ADV across all Cboe exchanges up over 2017; April ADV in options, U.S. equities and global FX up over year ago
Cboe
Cboe Global Markets, Inc. today reported April monthly trading volume and average revenue per contract (RPC)/net revenue capture data at www.cboe.com/monthlyvolrpc.
/jlne.ws/2rph1s6
India's derivatives to cash market turnover ratio at highest among world markets
Moneycontrol
India has raced ahead of Korea Exchange, in terms of the ratio of equity derivatives turnover to the cash market turnover, according to data by World Federation of Exchanges Forum. The derivatives to cash market ratio for India has increased to 29.6 from around 15.0 two years ago, and is way ahead of Korea, which had a ratio of 18.8 at the end of March 2018.
/jlne.ws/2FSyi13
BSE to launch commodity derivatives trading from Oct 1
Hindu Business Line
BSE will launch trading in the commodity derivatives segment from October 1, and will focus on non-agri products to start with.
/jlne.ws/2FVx9pK
MCX to launch crude oil, metals options; also gets nod for diamond futures
Business Standard News
Multi Commodity Exchange (MCX) obtained permission late last week to launch options trading in crude oil, silver, copper and zinc, following its recent launch of options contracts in gold.
/jlne.ws/2JXfdgH
| | | | | | Regulation & Enforcement | | | Foes of market data fee hikes encouraged by SEC scrutiny
John McCrank - Reuters
A recent move by U.S. securities regulators demanding stock exchanges do a better job justifying price changes for public market data feeds could lead to more transparency around data costs, the head of one of the world's largest trading firms said on Friday.
/jlne.ws/2rpp5ZS
VIX Loss Notice: Rosen Law Firm Reminds Investors of Important Deadline in Class Action Lawsuit Against the VIX Exchange CBOE
Press Release
Rosen Law Firm, a global investor rights law firm, announces the filing of a class action lawsuit on behalf of purchasers who held or traded S&P 500 ("SPX") option contracts ("SPX Options"), CBOE Volatility Index ("VIX") option contracts ("VIX Options"), futures based on the VIX ("VIX Futures"), or VIX Exchange Traded Products ("VIX ETPs") on exchanges run by Cboe Global Markets, Inc. (formerly known as CBOE Holdings, Inc.) and its affiliates ("CBOE")
/jlne.ws/2FRoVPn
****SD: Add this one to the list...
Republican Regulator Who Blasted Dodd-Frank Rules to Step Down
Dave Michaels - WSJ
A Republican member of the Securities and Exchange Commission who was a frequent critic of post-crisis regulations and helped quash some rules embraced by Democrats plans to leave the agency in July.
/jlne.ws/2I11kli
Sebi extends trading hours for derivatives market till 11:55 PM from Oct 1
Business Standard News
The Securities and Exchange Board of India (Sebi) on Friday allowed domestic stock exchanges to extend equity derivatives trading till 11.55 pm, in a move aimed at attracting investors dealing in Indian products on overseas exchanges in Singapore and Dubai. The new timings will also help in better alignment with commodity markets  amid implementation of universal exchanges  which function till 11:55 pm.
/jlne.ws/2HYrRPW
****SD: From Moneycontrol - Extended F&O trading times: How it will impact option traders
Sebi writes to govt urging tax parity between cash and derivatives
Business Standard News
The Securities and Exchange Board of India (Sebi) intends to have tax parity in the futures and options (F&O) segment. Sebi is of the view that the differentiating tax structure, particularly the securities transaction tax (STT), is incentivising participation in the derivatives segment.
/jlne.ws/2FVwowU
| | | | | | Technology | | | StratiFi Technologies Announces Series A Funding Round
VentureBeat
StratiFi Technologies Inc., whose technology solutions help advisors improve investment outcomes for clients, while increasing the stability of their own businesses, has announced a Series A funding round that was led by Anthemis Group.
StratiFi raised $7 million from Anthemis Group, Wolverine Holdings, Cboe Global Markets, HOF Capital and AngelList. Finance and technology industry leaders who also participated, include Mike Curcio, E*Trade's chief brokerage officer, Matt Hougan, Bitwise Asset Management's global head of research, and ETF.com's former chief executive, Matt Wyndowe, formerly Uber's head of product partnerships and Facebook's platform games eco-system, and Luke Powell, formerly Prosper's director of institutional partnerships. StratiFi's existing investors include Khosla Ventures and Y Combinator.
/jlne.ws/2FRP1Sm
****SD: Steve Sears' aforementioned new employer.
| | | | | | Strategy | | | Gold: At the Crossroads of Fiscal and Monetary Policies
Erik Norland Topics: Metals - CME Group
Twice this year implied volatility in gold options spiked from 9% to around 13.5%. Proportionally, that represents a 50% rise and seems like a big move, at least by the standards of recent history. What is more remarkable, however, is how calm the gold market has generally been. For the past two years, implied volatility on gold options have been near the lowest levels in recent memory and are a far cry from the 17% average levels that prevailed in 2015 and 2016, much less the spikes above 30% in 2011 and 2013 (Figure 1). So why has the gold market been so placid and what will likely drive volatility?
/jlne.ws/2HXkxEo
The market's choppy, churning phase will give way to another climb
Michael Santoli - CNBC
If Wall Street's setback since January is indeed simply a routine correction in a still-vibrant bull market, the time is nearing for the market to prove it.
/jlne.ws/2JXfLTN
| | | | | | Miscellaneous | | | Libor Refuses to Die, Setting Up $370 Trillion Benchmark Battle
Alex Harris - Bloomberg
A struggle that will dictate the future of financial markets is brewing. Long beleaguered Libor is fighting to preserve its status as the premier global benchmark for dollar-based assets just as questions pile up over the credibility of its presumptive heir.
/jlne.ws/2jANsiT
Bitcoin drop tied to CME futures listing, Fed paper shows
Reuters
Bitcoin's drop in value from its December 2017 peak of $19,511 was tied directly to the listing of futures contracts tied to the cryptocurrency's value, new research published by the San Francisco Federal Reserve showed Monday.
/jlne.ws/2FSRVWX
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