| August 14, 2017 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Change the Game - Tom Sosnoff
Education.MarketsWiki.com
"The U.S markets are the global hub of liquidity. That's why they're so wonderful. So when you get truly liquid markets, you have very accurate expected value."
In this video from MarketsWiki Education's World of Opportunity event in Chicago, Tom Sosnoff, co-CEO of tastytrade, maps out the importance of decision making. Trading is one of the few industries where you have the ability to make an unlimited number of decisions with both emotional and monetary outcomes.
Sosnoff says the most important thing you can do as a recent graduate is monetize your know-how. The more valuable you are to your company, the happier you will be.
Read the rest and watch the video »
| | | | | | Lead Stories | | | Mystery trader '50 Cent' made $21 million from stock market meltdown
Joe Ciolli - Business Insider
Last Thursday's big sell-off in stocks cost a lot of people money, but at least one person walked away smiling.
That would be "50 Cent," the volatility vigilante who's made a name amassing bets on a stock market shock  one set to pay off in the event of a spiking CBOE Volatility Index, or VIX.
jlne.ws/2wXWxa5
****SD: They're focused on potential gains, but my question is how many of the trader's previously purchased calls expired worthless?
Why Thursday's VIX Surge Looks More 'Serious' Than Past Jumps
Inyoung Hwang - WSJ
On Thursday, after months of retreating, the widely watched CBOE Volatility Index jumped 44%. The move up sent the gauge, dubbed the VIX, to 16.04, its highest since November. But on Friday, the VIX was back down, raising questions whether Thursday's spike was a false dawn for traders desperate for a resurgence in U.S.
/goo.gl/Zwe9Rp
***SD: Consider it was the biggest VIX surge for the smallest S&P move, too.
Why Does August Get Such a Bad Rap?
Bob Lang - CBOE Options Hub
We are in the midst of August, the "dog days of summer", and all we hear about now is a 'seasonally weak' period for markets. History is on the side of these commenters, yet maybe things are a bit different today. Let's flesh it out and see if we can take advantage.
August seems to get the blame for many bad things to come. There are no 'pure' or 'fun' holidays in August, and in the northern hemisphere it is usually the hottest time of the year (weather-wise). As it relates to markets, the action is often thin, volatility starts to rise (as it did last week) amid uncertainty and we often see this as a setup to two of the worst months of the year - September and October. Such a bad rap!
jlne.ws/2wXFp47
After a Summer Bond Binge, Signs of Angst Are Growing in the Market
Nabila Ahmed, Sally Bakewell, Molly Smith, and Claire Boston - Bloomberg
Have we finally reached peak credit markets?
It's a question that big names like BlackRock, DoubleLine and Pimco have been asking during this seemingly endless summer of debt.
Signs of froth are everywhere. U.S. high-grade companies, which have already sold almost $1 trillion of bonds this year, are on track to break old issuance records. By some measures, corporate America is deeper in debt than ever before. Junk bonds, yielding on average just 5.8 percent, have fallen close to post-crisis lows.
jlne.ws/2wXCeti
Saxo Bank doubles FX and Commodities margin requirements on US-North Korea tensions
Leaprate
Copenhagen based multi asset broker Saxo Bank has announced that it is raising margin requirements and reducing leverage on a variety of FX, CFD and Commodity products, as geopolitical tensions in the Asia Pacific region heat up in the wake of increased US-North Korea rhetoric.
jlne.ws/2wXtbso
****SD: "All Korean stocks and ETFs will have 40% margin requirements, as will Inverse VIX ETFs." ZeroHedge a bit more focused on the vol side - Saxo Hikes Inverse VIX ETF Margins To 40%
Energy hedge funds look to spreads, margins as long bets flail
Julia Simon - Reuters
For the oil-trading community, the fall of hedge fund manager Andy Hall signaled a heavy blow, but while commodity funds continue to shutter their doors, some are finding other ways to make money, including trading refining margins and calendar spreads.
/goo.gl/p122rs
| | | | | | Exchanges and Clearing | | | CME Hires Ex-Analyst, Strategist Honoré to Lead Data Product Management
Joanne Faulkner - WatersTechnology
Honoré's hire is part of a broader initiative by the exchange to leverage derived data as a revenue stream.
Those also include the management of both data administration and distribution on behalf of third-parties leveraging CME Group's technology and expertise, officials say. The team is also responsible for the product management of the platforms that support the delivery and administration of those products.
/goo.gl/CZejMv
'Flash Boys' IEX Tries to Lure Listings From Giants NYSE, Nasdaq
Annie Massa and Charlotte Chilton - Bloomberg
When IEX Group Inc. won approval to become a full-fledged U.S. stock exchange last year, detractors were shocked the small, upstart firm pulled off the feat.
Now, IEX is engaged in an even more challenging venture: It wants to lure corporate listings away from two entrenched giants, the New York Stock Exchange and Nasdaq.
jlne.ws/2wY1UpY
FIA Comments on equity derivatives market growth in India
FIA
FIA submitted comments to SEBI in response to the regulator's Discussion Paper on the Growth and Development of the Equity Derivatives Market in India.
jlne.ws/2wXH3Da
| | | | | | Regulation & Enforcement | | | Immunity Now!
Themis Trading Blog
As you all know, stock exchange business models have morphed radically in the last decade. Large portions of their business are bed-rocked in the selling of speed (colocation, data feeds, and data services) - as much as 50%. And as you all know, this morphing has been put in the spotlight with the public's awakening to the role that high frequency trading plays in our modern equity markets.
/goo.gl/UmQEci
Tudor and Brevan Howard abandon Mifid; Two large hedge fund companies have dropped their licences for the EU regulation
Madison Marriage and Siobhan Riding - FT
Two of the world's largest hedge fund companies have dropped their Mifid licences. The move will enable the investment managers to avoid controversial new rules that will radically transform how Europe's financial industry operates next year.
/goo.gl/nskGwU
Biggest banks prefer full Volcker Rule repeal, but a rewrite would do
Francine McKenna - MarketWatch
The biggest banks have already digested the myriad requirements of the complex 950-page Volcker Rule and have spun off prohibited proprietary trading units, but the industry is still pushing Congress to fully repeal the rule.
/goo.gl/cmXWfN
Survival of Brokers' Morning Notes in Balance as MiFID II Looms
John Glover - Bloomberg
Each weekday morning, shortly after 8 a.m. London time, City workers get a cheery "GOOD MORNING" in their inboxes as Anthony Peters's daily note arrives.
In it, the Sol Capital Advisory strategist discusses the previous day's events, economic numbers published or due, and pours scorn on hobby horses including the European Union, central banks and politicians. A similar recipe is used by Bill Blain of Mint Partners, who opens "Blain's Morning Porridge" with a song lyric or quotation, and Deutsche Bank AG's Jim Reid, whose "Early Morning Reid" recounts some part of his home life before turning to the economy, rates, bonds and currencies.
jlne.ws/2wXzPPu
Sebi chief bats for deeper commodity markets
Times of India
With an aim to further deepen the commodity derivatives market, regulator Sebi will explore ways to widen the segment by bringing in more participants and products.
The Securities and Exchange Board of India (Sebi) started regulating the commodity market in September 2015 following the merger of the erstwhile watchdog Forward Markets Commission (FMC) with itself.
jlne.ws/2wY2kwi
| | | | | | Technology | | | What Fintech Can Learn from the Decline and Reinvention of High-Frequency Trading
Sviatoslav Rosov, CFA Institute - TabbForum
It is possible that more investment in fintech such as blockchain or machine learning can give firms a competitive edge  for the moment. But the experience of high-frequency traders suggests that eventually the technology will diffuse through the market and fintech firms will face the difficulties that HFTs are now experiencing. Fintech growth may hit a brick wall, just as HFT growth has done, once these firms' competitive advantage is eroded or the financial market itself adjusts to their existence.
/goo.gl/HcGjP8
| | | | | | Strategy | | | What's Next for VIX After Last Week's Nuclear Melt-Up
Todd Salamone - Schaeffer's Research
During the past couple of weeks, round numbers and "Fed resistance" have been topics of discussion, with the Dow Jones Industrial Average (DJIA - 21,858.32) probing 22,000 -- double a multi-year (from 1999-2006) millennium resistance area at 11,000. Moreover, the S&P 500 Index (SPX - 2,441.32) is perched just under a half-millennium area at 2,500, with a poor track record around prior half-millennium levels at 500 and 1,500.
jlne.ws/2w3FMOl
Global Sigma launches volatility arbitrage strategy
Opalesque
Global Sigma's volatility arbitrage strategy (GS/ Vol) went live in May, after returning a hypothetical back-tested 19% annually on average from January 2007 to May 2017, with a Sharpe Ratio of 2.1. The fund is due to launch this month.
The Boca Raton, Florida-based firm, which manages $230m in AuM, has been trading S&P500 options and analyzing volatility for nearly eight years
jlne.ws/2w3VUj2
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