| July 11, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Cboe's Henry Schwartz shared on LinkedIn that "28.7 million FLEX option contracts traded in the first half of 2022 with record average daily open interest of 2.87M contracts. Volume is 52% above the same period in 2022 while OI is 27% higher."
| | | | | | Lead Stories | | | Miami International Holdings Wins Patent Case Against Nasdaq; All Asserted Patents Invalidated And Patent Claims Permanently Dismissed with Prejudice
MIAX
Miami International Holdings, Inc. (MIH), the parent holding company of the
MIAX Options , MIAX Pearl and MIAX Emerald exchanges (collectively, MIAX ), today announced that the United States District Court for the District of New Jersey has entered a stipulation and order (the Order) in Nasdaq, Inc., et al v. Miami International Holdings Inc., et al (Civil Action No.: 3:17-cv-06664-ZNQ-DEA) dismissing with prejudice all of the six patent infringement claims asserted by Nasdaq against MIH and its affiliates. The Order was signed on June 30, 2022 by the Honorable Zahid N. Quraishi - United States District Court Judge for the District of New Jersey.
/bit.ly/3AFLczu
Cash-Like ETFs Are Finally Paying Pennies Again
Katherine Greifeld - Bloombreg
Fixed-income ETFs are finally all living up to their name.
The most aggressive Federal Reserve tightening in decades has boosted rates on Treasury bills back above the annual expense ratios of all US exchange-traded funds buying ultra-short bonds.
That means for the first time in well over a year, funds like the $21 billion iShares Short Treasury Bond ETF (ticker SHV) are reliably paying out dividends.
/jlne.ws/3NSNi20
Funds' bullish CBOT corn views fall to lowest since Oct. 2020
Karen Braun - Reuters
Chicago corn and soybean futures have undergone a significant downward correction within the last month, fueled largely by signs of an economic slowdown and waning U.S. crop concerns.
Speculators during this time have notably eased their bullish bets, which have stood for more than two years in soybeans and nearly two years in corn. They have yet to firmly plant their feet on the short side of the market, though there was increasing indication of that in the latest week.
/jlne.ws/3ywIF89
Oil dumped by hedge funds on heightened recession risk
John Kemp - Reuters
Investors dumped petroleum-related derivatives last week at one of the fastest rates of the pandemic era as recession fears intensified.
Hedge funds and other money managers sold the equivalent of 110 million barrels in the six most important petroleum-related futures and options contracts in the week to July 5.
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Hedge funds up the bear ante on Doctor Copper and friends
Andy Home - Reuters
Hedge funds are piling the pressure on Doctor Copper and his metallic friends.
Money manager positioning on the CME copper contract is as bearish as it has been since the first quarter of 2020 when industrial metals prices collapsed as China, followed by just about everyone else, went into COVID-19 lockdown.
/jlne.ws/3Rje1ro
When stagflation looms, investors get no satisfaction
Rob Mannix - Risk.net
Summer 2022. The dinosaurs of rock rule the airwaves and throwbacks litter the news headlines: heatwaves and cold wars; social and political unrest. And now, possibly, stagflation - the toxic mix of ratcheting rates, stagnant growth and rising inflation that was a major feature of the 1970s economic landscape.
And if history can teach us anything about stagflation, it's that in conventional asset classes at least, investors really can get no satisfaction.
/jlne.ws/3ypu9Pm
| | | | | | Exchanges | | | Statement by CME Group Chairman and Chief Executive Officer Terry Duffy on John W. O'Brien, Sr.
CME Group
CME Group Chairman and CEO Terry Duffy today issued the following statement on behalf of the company:
"The futures industry lost a great leader with the passing of John O'Brien, Sr., who was a Board member, former Chairman and former CEO, as well as a founding family member of RJO & Associates, the oldest and largest independent futures brokerage and clearing firm in the U.S.," said CME Group Chairman and Chief Executive Officer Terry Duffy. "John spent his career championing the U.S. futures industry and was instrumental in expanding its reach to customers around the world. As someone who literally grew up in this business, he fostered a culture of treating all clients and employees as family - a legacy that continues within RJO today. John was a friend and mentor to many within the business and will be deeply missed. On behalf of everyone at CME Group, our heartfelt condolences go out to his wife, Pat, their children, the entire O'Brien family and all of his RJO colleagues."
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Miami International Holdings Reports June 2022 Trading Results;
Sets Year-to-Date Volume Records
MIAX
Miami International Holdings, Inc. (MIH) today reported June 2022 trading
results for its U.S. exchange subsidiaries - MIAX , MIAX Pearl and MIAX Emerald (together, the MIAX Exchange Groupâ¢), and Minneapolis Grain Exchange (MGEXâ¢).
June 2022 Trading Volume Highlights. Total U.S. multi-listed options market share for the MIAX Exchange Group reached 13.74%, down 171 basis points year-over-year (YoY) and representing an 11.1% decrease. A total of 101.9 million multi-listed options contracts were executed on the MIAX Exchange Group, representing a 20.2% decrease YoY and an average daily volume (ADV) of 4,852,472 contracts. Total year-to-date (YTD) volume reached a record 662.8 million contracts, an increase of 2.6% from the same period in 2021.
/bit.ly/3PcPIJK
NYSE Pillar Options: Final Reminder - Arca Options Migration July 11th Go-Live
NYSE
NYSE Arca Options Pillar Migration - Tranche 1 (ICE, AFRM, HYG, XLF)
NYSE Arca Options' migration to the NYSE Pillar trading platform will begin on Monday, July 11, 2022. The following symbols will migrate in Tranche 1: AFRM, HYG, ICE, XLF. The migration will take place over two weeks in five tranches. If required, any adjustments to the schedule will be announced via Trader Update.
/bit.ly/3c4VJdb
| | | | | | Regulation & Enforcement | | | FTX Presses for Crypto Derivatives Approval, Agitating Legacy Exchanges; U.S. investors could deal directly with FTX instead of going through a broker, raising objections from CME and others on risk
Alexander Osipovich - WSJ
The cryptocurrency exchange FTX is seeking a green light from regulators to let individual investors use derivatives to place leveraged bets on bitcoin, a move opposed by rivals. Traditional exchanges and financial-industry groups say FTX's proposal might endanger market stability. Their concerns center on a key element of the plan, under which investors could deal directly with FTX instead of going through a broker. This approach represents a change from the way derivatives markets have operated for decades.
/jlne.ws/3yuWi7Y
ESMA stress test finds that concentration and operational risks should be reduced in CCPs
Wesley Bray - The Trade
The European Securities and Markets Authority (ESMA) has published the results of its fourth test exercise of Central Counterparties (CCPs), confirming the overall resilience of CCPs in the Bloc and third-country Tier 2 CCPs.
Despite being resilient overall, the stress test identified areas where CCPs could strengthen their risk management frameworks or where additional supervisory work should be prioritised, including around concentration and operational risks.
/jlne.ws/3uDnNe8
Prosecutors Say JPMorgan Traders Scammed Metals Markets by Spoofing
Dave Michaels - WSJ
JPMorgan Chase & Co.'s precious-metals traders consistently manipulated the gold and silver market over a period of seven years and lied about their conduct to regulators who investigated them, federal prosecutors said Friday.
/jlne.ws/3azeVzG
| | | | | | Strategy | | | BlackRock Warns Against Dip Buying as High-Volatility Era Dawns; Strategists are underweight government bonds, DM equities; Prepare to be nimble amid sticky inflation, economic swings
Anchalee Worrachate - Bloomberg
There's no quick recovery in sight for stocks and bonds that are having their worst year in at least three decades, according to strategists at BlackRock Inc. Russia's grinding war in Ukraine and supply bottlenecks from labor shortages will keep the pace of price growth elevated. Central banks will tighten policy until the economic pain forces them to shift direction and live with inflation. Constrained by the "hyper-politicization of everything," policy makers will struggle to tackle the fallout.
/jlne.ws/3c1yvEY
Investors Should Think Risk Factors, Not Asset Classes
Mohamed A. El-Erian - Bloomberg
Rather than using the traditional asset-class analysis, I have found employing a risk-factor approach particularly helpful in understanding the impact of economics and policy on markets this year â not only in explaining the evolution of valuations, correlations and volatility, but also in pointing to what to look for in the near term.
/jlne.ws/3nTwopr
The Case for Covered Call Writing Just Got Stronger
Jim Pearce - InvestingDaily
I spent last weekend with more than 40 extended family members at our biannual Pearce family reunion in Lewes, Delaware. Actually, we last convened in 2019 due to the coronavirus pandemic so we had a lot of catching up to do.
Since most of my cousins are my age or older, they want to know how they could increase their incomes in retirement. Three years ago, I explained to them how writing covered call options is a good way to do that.
| | | | | | Miscellaneous | | | Top Fed official warns of 'serious vulnerabilities' in crypto industry; Sector needs tighter regulation as it is susceptible to same risks as traditional finance, Lael Brainard says
Scott Chipolina and Gary Silverman - FT
Federal Reserve vice-chair Lael Brainard has said recent crypto volatility has exposed "serious vulnerabilities" in an industry in need of tighter regulation. Brainard told a Bank of England conference in London on Friday that crypto is not yet "so large or so interconnected" with traditional finance to pose systemic risk but raises familiar regulatory concerns.
/jlne.ws/3Iryfvd
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