| May 02, 2019 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
The Thorny Speed Bump Question
JohnLothianNews.com
If the industry can agree on one thing, it's to disagree about speed bumps. In this video, Chicago Trading Company Head of Market Structure and Electronic Trading Strategy Steve Crutchfield talks about why he is in favor of ICE's recently announced latency protection mechanism.
Watch the video »
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MIAX in Minneapolis - SPIKES Futures to List on MGEX
Spencer Doar - JLN
DORAL, FLA. - In the first quarter of 2019, MIAX launched options trading on the SPIKES Index, a competing volatility index to Cboe's VIX. SPIKES was developed by T3 Index and is based on SPY options instead of SPX options.
At the 37th Annual Options Industry Conference, T3 Index CEO Simon Ho announced during the "Volatility as an Asset Class" panel that MIAX was partnering with the Minneapolis Grain Exchange (MGEX) to list futures on SPIKES.
Read the rest HERE.
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Options Exchange Marketshare -- April 2019
| | | | | | Lead Stories | | | 'Leaning Too Dovish': Wall Street Adjusts to Powell on Inflation
Vildana Hajric and Sarah Ponczek - Bloomberg (SUBSCRIPTION)
It was supposed to be a no-drama meeting from the Federal Reserve. Not quite.
After struggling to find a consensus, stocks came to a bearish verdict on Chairman Jerome Powell's pronouncements on interest rates and inflation. The S&P 500 Index fell the most in in five weeks after an initial rally quickly fizzled when Powell said the central bank has no bias to either tighten or ease monetary policy, noting that weak inflation readings may be "transitory."
/jlne.ws/2GUTXrW
Milken 2019: How private equity is intensifying stock market liquidity risk
Akin Oyedele and Joe Ciolli - Business Insider
The private-equity industry is high on many lists of markets where a bubble is brewing.
Several experts have flagged the vast number of debt-fueled deals, and lofty financial projections for companies. According to Mark Machin, CEO of the Canada Pension Plan Investment Board, private-equity firms are sitting on about $1.7 trillion of uninvested capital  dry powder still waiting to be deployed.
/jlne.ws/2GUtxXf
A 382% Quarter: Hedge Funds Clean Up In Chinese Rally
Shen Hong - WSJ (SUBSCRIPTION)
Some nimble money managers in China have enjoyed triple-digit returns in three months, running far ahead of a wider rally as they play hot themes as varied as industrial hemp, pig farming and e-cigarettes.
/jlne.ws/2GREn0s
Market Volatility Bulletin: Will Volatility Make A Comeback?
Seeking Alpha
Seemingly invincible US equities (SPY, DIA, QQQ, IWM) are sustaining some damage for a second day, presumably based on comments from Chair Powell yesterday that were not sufficiently dovish for investors in risk assets.
Spot VIX printed just below 16 as Thursday afternoon's trading session commenced, after hitting lows in the mid-twelves earlier in the week.
/jlne.ws/2GRUL0P
| | | | | | Exchanges and Clearing | | | OCC April Cleared Volume Down Five Percent
OCC
OCC, the world's largest equity derivatives clearing organization, announced today that total cleared contract volume in April reached 385,965,706 contracts, a 4.9 percent decline compared to last April. OCC's year-to-date average daily cleared contract volume is 19,200,350, down 12.8 percent compared to 2018's record-breaking pace.
/jlne.ws/2vvGguk
CME Group Averaged 15.7 Million Contracts Per Day in April 2019
CME Group
CME Group, the world's leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 15.7 million contracts during April 2019, compared to 17 million contracts in April 2018. Open interest (OI) at the end of April was 132 million contracts, up 14% from year-end 2018 and up 5% from April 2018.
Options volume averaged 3.4 million contracts per day in April 2019, down 2% from April 2018.
/jlne.ws/2GRMjyD
Intercontinental Exchange Reports First Quarter 2019
Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listing services, today reported financial results for the first quarter of 2019. For the quarter ended March 31, 2019, consolidated net income attributable to ICE was $484 million on $1.3 billion of consolidated revenues, less transaction-based expenses. First quarter GAAP diluted earnings per share (EPS) were $0.85. Adjusted net income attributable to ICE was $527 million in the first quarter and adjusted diluted EPS were $0.92. Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted EPS and free cash flow.
/jlne.ws/2GLlr36
Miami International Holdings and MGEX Partner to List and Trade SPIKES Futures on MGEX
MIAX
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX, MIAX PEARL and MIAX Emerald options exchanges (the MIAX Exchange Group), and the Minneapolis Grain Exchange, Inc. (MGEX), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) registered with the Commodity Futures and Trading Commission (CFTC), today announced that they have entered into an agreement pursuant to which MGEX will serve as the exclusive exchange to list, trade and clear futures products on the SPIKES Volatility Index (SPIKES; Ticker: SPIKE), a measure of the expected 30-day volatility in the SPDR S&P 500 ETF (SPY). SPIKES futures are expected to be available on MGEX in Q3 2019, subject to CFTC approval. SPIKES options are now available exclusively on the MIAX Options Exchange.
/jlne.ws/2GQVYpb
Eurex EnLight extended: now with all Eurex equity and equity index options
Eurex Exchange
Since June 2018, our selective RfQ-based service is up and running allowing banks and brokers to selectively contact liquidity providers with requests for quotes in order to find a trading counterparty.
As of 2 May 2019, the proven concept reaches the next stage. On top of Swiss equity and equity index derivatives and fixed income products, the product suite has now been extended to cover all equity and equity index options and corresponding futures available at Eurex Exchange.
/jlne.ws/2vxiPAT
Large exchanges made a staggering 60% profit margin. We break down how they made their money.
Dan DeFrancesco - Business Insider
For all the technology, infrastructure and resources it takes to run some of the biggest trading markets in the world, exchange operators have still maintained eye-popping profit margins as their revenues continue to grow.
The average operating margin at the world's largest exchanges in 2018 was just over 60%, according to a report by consultancy Opimas. Of US-based exchange operators included in the report, the Intercontinental Exchange (ICE), which owns the New York Stock Exchange, topped the list with a profit margin just shy of 70%.
/jlne.ws/2GTjHF9
| | | | | | Moves | | | FIA Names Bruce Savage as Head of Europe
FIA
FIA President and CEO Walt Lukken today named Bruce Savage as the new Head of Europe. Savage, who will join FIA this summer, has spent 21 years with Deutsche Bank in a variety of roles, most recently as the bank's Global Head of Regulatory Affairs & Market Structure, Listed Derivatives & Markets Clearing. He has been an active member of FIA, recently serving on the association's board of directors and as a member of the European Regional Advisory Board.
/jlne.ws/2GPXmZc
| | | | | | Regulation & Enforcement | | | Opinion: Why Words Matter in CFTC Enforcement of "Insider Trading"
Neal Kumar, Willkie Farr & Gallagher - MarketVoice
In the United States, two different legal regimes govern trading in securities and derivatives, each complete with its own language. These legal regimes evolved differently because the two markets at their core serve different purposesÂcapital formation on the one side, and price discovery and risk management on the other. In some cases, it can be easy to translate the language from one market to the other. However, one phrase from the securities world that does not translate accurately into the derivatives markets is "insider trading."
/jlne.ws/2GY0nH4
| | | | | | Strategy | | | New OCC Study: Listed Index and ETF Option Overlays May Improve Endowment Performance
OCC
OCC, the world's largest equity derivatives clearing organization, today shared the results of a new study, Endowment Risk Management and Return Enhancement with Listed Index and ETF Options, that found that both buy-write and put spread collar overlays improved risk-adjusted performance within the study sample for small, mid-sized and very large endowments, with the small endowment portfolio seeing the largest benefits.
/jlne.ws/2vy9zfE
Stock market options trading strategy for melt-up or crash: BAML
Akin Oyedele - Business Insider
A good number of investors are feeling left out of the stock market's blistering rally.
According to data compiled by Bank of America Merrill Lynch, $95 billion was pulled from equity funds in the year through April 24 Â a period in which the S&P 500 jumped 17% and hit a new closing high.
While some of the cash may have found its way into exchange-traded funds, there was evidently doubt in some corners about the sustainability of the rally. If you fall in the latter camp, Bank of America has formulated a cheap options-trading strategy to help you capture the upside of continued gains and protect against losses if your bearish hunch is right.
/jlne.ws/2GVH4hz
Portfolio Hedging: New Insights
Sage Anderson - tastytrade
While there's plenty of machines out there trading the market (i.e. black boxes and the like), most tastytraders are old fashioned skin and bones - at least in terms of internal components.
And while the machines may possess some advantages, we humans do too - especially the ability to adapt quickly and learn from our mistakes. For this reason, reflecting on previous trading periods can be a prudent enterprise, in terms of tweaking our mindset or approach going forward.
/jlne.ws/2GSOMsJ
| | | | | | Miscellaneous | | | The Fed Needs a Better Feel for Markets
Mohamed A. El-Erian - Bloomberg (SUBSCRIPTION)
This was supposed to be a no-drama, non-event Federal Reserve policy meeting  and was, until a small communication slip led to outsize moves in markets, with stocks and bonds selling off simultaneously. Understanding why tells us a lot about investor mentality and market positioning, not to mention the need for the Federal Reserve to develop a better feel for both before things get really complicated.
/jlne.ws/2H4TfZx
Human hedge fund managers embrace robot-rival tools to amp returns
Svea Herbst-Bayliss - Reuters
Traditional stock-pickers in the hedge fund world have been struggling to justify their expenses and weak returns in recent years, as low-cost algorithmic funds have done better. Now, human managers are starting to embrace the technologies employed by their robot rivals to improve results.
/jlne.ws/2GLhMlS
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