| October 31, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Oil Options Imply High Risk of Big Price Moves
Bob Henderson - WSJ
The Israel-Hamas war is driving up the costs to insure against big moves in oil prices. That's even as prices have retreated to pre-war levels.
A measure of the cost of placing a bet in the options market that prices will rise or fall by an unusually large amount over the next month has soared since Hamas's attack on Israel on Oct. 7, according to derivatives exchange operator CME Group. The measure's levels in recent days exceeded the levels from after Russia's invasion of Ukraine early last yearâand are comparable to the record highs last seen at the start of the pandemic in 2020, when oil prices briefly went negative.
/jlne.ws/46arYOR
The stock market is in no man's land as indicators signal split between bears and bulls
Matthew Fox - Business Insider
The investment research firm's proprietary "Bear Watch aggregate" indicator has been on the rise in recent months as the stock market has sold off 10% from its late-July high. But not enough signals have been triggered to say definitively that another bear market is imminent.
/jlne.ws/40ifovw
Has the S&P 500's recent correction triggered a new bear market?
Mark Hulbert - MarketWatch
There's a 40% chance that the stock market's recent correction will turn into a major bear market.
Last Friday the S&P 500 SPX entered correction territory by closing more than 10% below its July 31 high. The U.S. benchmark index would have to fall by another 10 percentage points to satisfy the semi-official definition of a bear market.
/jlne.ws/46Ul2WX
Buying Opportunity Depends Which Recession Risk You're Looking At
John Authers - Bloomberg
The economy and the stock market are not the same thing, at all. In the short run, there's no particular reason to expect them to move in the same direction, even though in the long run they both tend to grow, with occasional interruptions. At present, the disjunction seems extreme: Last month saw both a blowout number for third-quarter gross domestic product growth, of 4.9%, and a selloff in the stock market that brought the S&P 500 more than 10% below its recent peak â satisfying a popular definition of a "correction."
/jlne.ws/3FG8XsE
Equity hedge funds cut risk in portfolios, less confidence in rallies
Carolina Mandl - Reuters
U.S. equity long/short hedge funds have cut to six year lows the level at which swings in the S&P 500 (.SPX) affect their profits or losses, as portfolio managers are taking less directional bets, data from hedge fund research firm PivotalPath showed.
/jlne.ws/3QmGDjI
Glen Point Fraud Verdict Signals White-Knuckle Trades Are Fading; Neil Phillips was already rare breed before Oct. 25 conviction; Trial offered window into Soros-backed macro fund's operations
Carter Johnson and Greg Farrell - Bloomberg
Just a few years ago, Glen Point Capital co-founder Neil Phillips was celebrated as an aggressive but canny trader in the mold of one of his macro hedge fund's main investors, George Soros. As of last week, Phillips is a convicted felon.
/jlne.ws/45Y30Sq
| | | | | | Regulation & Enforcement | | | FIA voices continued opposition to SEC's proposed custody rules for FCMs
FIA
FIA has filed additional comments opposing application of the US Securities and Exchange Commission's proposed "safeguarding" rule to FCMs. The SEC recently re-opened the public comment period on the proposal, which would replace its existing custody rule for qualified custodians, including Futures Commission Merchants (FCMs).
/jlne.ws/3SsH7YB
| | | | | | Strategy | | | The Stock Market May Be Going Nowhere. These Income ETFs Could Benefit.
Lauren Foster - Barron's
Stocks are dithering and that may be good news for investors hoping to benefit from an options strategy known as covered calls.
/jlne.ws/3Mrlxjb
The RVX Index
Cboe (Video)
In #Vol411, @RussellRhoads reminds us that $RVX and $VIX Indices can indicate market participants' concerns about small cap vs. large cap #stocks, lets us know that small cap stocks have underperformed relative to the S&P 500 this year (though the gap is narrowing) and more.
/jlne.ws/3u4RDuA
| | | | | | Education | | | Vertical Options Spreads: Calculate Risk and Potential Profit
TDAmeritrade
Option traders will sometimes trade a consistent quantity when initiating vertical spread trades. Although this method keeps the contract numbers orderly, it ignores the fact that each vertical spread has a different risk profile based on a few considerations:
/jlne.ws/3s4S5Zy
| | | | | | Miscellaneous | | | Sam Bankman-Fried testifies he thought hedge fund could cover $8 billion debt to FTX
Luc Cohen and Jody Godoy - Reuters
FTX founder Sam Bankman-Fried testified on Monday that he believed his Alameda Research hedge fund had enough assets to cover an $8 billion debt to the cryptocurrency exchange until days before both collapsed.
/jlne.ws/3FCU1eT
The Cure for Gen Z Loneliness Might Be a Return to the Office
Aaron Mok and Lakshmi Varanasi - Business Insider
Ben Fitchett didn't realize how difficult it would be to work from the confines of his bedroom.
After graduating from college in 2020, the 23-year-old started working as an account executive at a public-relations firm in New Zealand. He went into the office four times a week â and enjoyed every second of it.
/jlne.ws/3QiXh3S
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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Editor
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