| June 07, 2017 | | | | | Spencer Doar
Associate Editor
John Lothian News | |
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| | | | Observations & Insight | | | Cold as ICE: Sprecher asks UK, How much do you love me?
Jim Kharouf - JLN
To hear one exchange leader tell it, UK markets could use a little more love.
At the 10th annual FIA IDX conference on Tuesday, ICE Chairman and CEO Jeff Sprecher said UK regulators have not communicated with ICE much about how they could work together and keep ICE Europe's operations more firmly in London. In the wake of Brexit and the upcoming MiFID II rules in January, not to mention the ongoing questions about equivalent financial regulations after the UK and EU split, Sprecher said the UK authorities haven't shown much interest in the financial markets lately. And that's not a good thing in his mind.
jlne.ws/2rVyxoM
| | | | | | Lead Stories | | | One Place Volatility Hasn't Gone Home to Die Is the Nasdaq 100
Elena Popina - Bloomberg
Tech options trade near seven-month high to S&P 500 contracts; Nasdaq 100's RSI has been in overbought level for half of 2017
The Nasdaq 100, site of breakneck rallies in companies from Apple Inc. to Amazon.com Inc. and Alphabet Inc., is also a bastion of volatility, at least on a relative basis.
jlne.ws/2sT7jfC
****SD: Talk about the importance of weightings... Look at the biggest names and their action year-to-date. Nasdaq 100 is up some 20 percent on the year but Apple, Google, Amazon and Facebook are up 32, 26, 35 and 32 percent YTD, respectively. Heavy lifting done by the big boys.
Bond volatility: all aboard the big dipper?
James McAlevey - Financial Times
Save for a few noteworthy episodes, volatility has been like the boy who cried wolf for the past decade: remaining stubbornly low despite numerous economic and geopolitical shocks that had the potential to panic investors. This could change, however, as alterations to the structure of the fixed-income market expose hidden faultlines, creating risks and opportunities in government and corporate bonds, and derivatives linked to those markets.
jlne.ws/2sTAwal
****SD: ValueWalk has a piece about bond volatility today based on a HSBC research note.
Pound Seen Losing the Most If U.K. Vote Delivers No Winner
Anooja Debnath and John Ainger - Bloomberg
Sterling seen rallying to $1.31 if May wins a large majority; Currency may slump up to 7% if there is no clear verdict
The pound could plunge to as low as $1.20 on Friday, a level last seen in January, should the U.K. snap election lead to a hung parliament, according to a Bloomberg poll of analysts.
jlne.ws/2sTrzhk
****SD: I love this when paired with the following story.
Expectations for pound volatility muted ahead of UK election
Adam Samson - Financial Times
Smooth sailing ahead?
Investor expectations for volatility in the UK pound and other British assets remained muted ahead of Thursday's election in stark contrast to the palpable worry before the Brexit vote.
jlne.ws/2sTt5Qu
Stock market volatility will erupt again - trading execs warn
Joe Rennison and Nicole Bullock - Financial Times
Stock market volatility will inevitably erupt again, an array of trading executive and market analysts warned on Wednesday. The CBOE's Vix volatility index, a measure of one month implied volatility on the S&P 500, has held at low levels in spite of high valuations for companies, oil market uncertainty and political turmoil facing the new administration, perplexing some investors. Realised volatility has also been staggeringly low across financial markets this year.
jlne.ws/2sTroTo
****SD: Trading execs warn? More like trading execs pray.
Derivatives - The Missing Link in The Cryptocurrency World?
NewsBTC
The blockchain and crypto industry is currently replete with innovations looking to advance the technology and bring about the best results. But could there be a missing link, which when identified can lead to better investments and proper mitigation of risks?
jlne.ws/2sTbg4j
****SD: I'd never heard of DCORP before this release. I can't figure out the regulatory angle  that makes me question its "futures and options" offering. The point of the release is valid though. The real (U.S.) bitcoin options exchange will likely come from LedgerX, which recently raised $11.4 million.
| | | | | | Exchanges and Clearing | | | Bourses say big bang mergers sidelined by 'quiet' hunt for content
Huw Jones - Reuters
The collapse of Deutsche Boerse and London Stock Exchange's attempt to create a superbourse has left exchanges focusing on low key, incremental acquisitions, top bourse officials said on Tuesday.The third attempt to link up London and Frankfurt ended in March after it faced opposition from European Union competition regulators, and from German officials who opposed the head office being based in Britain.
jlne.ws/2sTAVJX
****SD: But home runs will always be more fun than singles.
Exchanges Warn on Brexit
Shanny Basar - MarketsMedia
Jeff Sprecher, chairman and chief executive of Intercontinental Exchange, said that the closure of CME Europe could be a sign of things to come, as the UK leaves the European Union.
jlne.ws/2sTlgdQ
LCH urges EU to avoid forced relocation of euro clearing
Huw Jones - Reuters
Forced relocation of euro-denominated clearing from London to the European Union after Brexit would harm the bloc, and the focus should be on increasing cross-border supervision, LCH said on Wednesday.
jlne.ws/2sTd5hB
CBOE Holdings Announces Road Map of C2 Exchange Switch to Bats Technology
Aziz Abdel-Qader - Finance Magnates
Chicago-based CBOE Holdings, the largest US options exchange, today announced that it will migrate its C2 Options Exchange (C2) to the trading platform of its newly acquired Bats Global Markets, the second largest stock exchange, as trading venues continue their consolidation across all financial asset classes.
jlne.ws/2sTNUv7
****SD: In case you missed it yesterday.
Monthly Report: Strong Demand For Financial Underlyings At Eurex
Mondovisione
May saw strong demand for the Eurex suite of interest rate and equity derivatives. Overall, turnover rose 26 percent to 163 Million Euro at Europe's largest derivatives exchange, which is part of Deutsche Börse Group. Market participants strongly relied on equity derivatives (+36 percent) to hedge their exposures on European markets, while turnover in Eurex's fixed income products rose 31 percent to 47 Million Euro.
jlne.ws/2sTqHt6
HKEx Reports Bump in Derivatives, RMB Futures Volumes
Aziz Abdel-Qadar - Finance Magnates
Hong Kong Exchanges and Clearing Limited (HKEx) has disclosed its market metrics for May 2017, which saw a strong performance across its securities and derivatives business, according to a HKEx statement.
jlne.ws/2sT7rM7
SGX reports market statistics for May 2017
SGX
Total Derivatives volume was 14.73 million, up 9% month-on-month (m-o-m) and up 9% year-on-year (y-o-y).
jlne.ws/2sT6VOk
| | | | | | Regulation & Enforcement | | | No more MiFID II delays says ESMA chief
Paul Walsh - The Trade
The chair of the European Securities and Markets Authority (ESMA) has pledged there will be no further delay on the implementation of MiFID II.
/goo.gl/sv9JJR
Wall Street Says Rules Pose Risk of Another Crisis, and Trump Regulators Agree
Jesse Hamilton and Benjamin Bain - Bloomberg
U.S. uber watchdog said to review impact of rules on trading; Financial firms have long argued that rules dried up liquidity
After the 2008 financial crisis, the U.S. set up the Financial Stability Oversight Council to monitor Wall Street threats that could lead to another crash.
jlne.ws/2sTweQd
| | | | | | Moves | | | Exclusive: Gaelle Cohen Joins Morgan Stanley's FX Options Team
Victor Golovtchenko - Finance Magnates
FX options trading veteran Gaelle Cohen has joined Morgan Stanley's team in London, sources with knowledge of the matter confirmed to Finance Magnates. The move comes after she held a senior role at the FX Options desk of Credit Suisse for over three years.
jlne.ws/2sToQ7H
This star hedge fund manager has just made a big trading hire
eFinancialCareers
Finding a hedge fund job in London now often means working being drawn into the orbit of a star trader. Chris Rokos is hiring for his massive hedge fund Rokos Capital Management, so too is Ben Melkman's Light Sky Macro, which recently brought in Jérôme Saragoussi from Deutsche Bank as director of trading strategy.
jlne.ws/2sTlUbg
| | | | | | Technology | | | IHS Markit launches derivatives collateral management system
Finextra
IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today announced the launch of Collateral Manager, an end-to-end solution for calculating margin, settling margin calls and managing margin disputes.
jlne.ws/2sTpi5R
New to the Risk Management Tool Kit: Alternative Data
Katherine Heires - Global Association of Risk Professionals
According to hedge fund chief risk officer Jack Kim, the full measure of risk in an investment portfolio cannot come from company fundamentals alone.
jlne.ws/2gta2ax
****SD: Missed this at the end of May. (Random note: There's so much cool stuff floating around Quandl.)
| | | | | | Strategy | | | Revisiting 'Buy The Dip' When Volatility Is Low
Vineer Bhansali - Forbes
Even I was a little bit surprised at how much agreement there was on the two pieces that I wrote in this forum a few weeks ago on the risks and consequences of selling volatility when it was so low - presumably the quantification of short gamma positions and their potential consequences resonated with our readers.
jlne.ws/2sTtNNS
Systematically Harvesting the Volatility Premium
Adam McCullough - Morningstar
Investors usually consider option-writing strategies as a means of generating income, or as an avenue for achieving equity-like returns with less risk. Neither categorization is necessarily wrong, but they overlook option-writing strategies' potential diversification benefits.
jlne.ws/2sTgBIA
| | | | | | Miscellaneous | | | Spring Rally in Stocks, Bonds, Gold and Bitcoin Unnerves Investors
Min Zeng and Ben Eisen - WSJ
Stocks, bonds, gold and bitcoinÂassets that rarely move in unisonÂhave all been surging this spring, an everything rally that leaves investors confounded about how to play the plodding U.S. expansion and vulnerable to sharp reversals in fortune.
/goo.gl/yMmzVN
****SD: More on gold from Bloomberg - Gold Makes Run Toward $1,300 as Risk Flares From U.K. to Mideast
Innovation Is the Only Cure for Fragmentation
Don Ross, PDQ - TABB Forum
The liquidity crisis is real. The average institutional order is more than 180,000 shares, while the average trade size is closer to 180 shares. But there is no regulatory magic wand that can fix the institutional liquidity crisis. This is a challenge that only innovation can solve.
jlne.ws/2sTsbnk
U.S. Oil Exports Double, Reshaping Vast Global Markets
Lynn Cook - WSJ
American oil exports are emerging as a disruptive new force in global markets. The U.S. exported 1 million barrels of oil a day during some months so far this yearÂdouble the pace of 2016Âand is on track to average that amount for all of 2017, according to a Wall Street Journal analysis of data from the U.S. Energy Department and the International Trade Commission.
jlne.ws/2sTtumc
Port bans choke Qatar's commodity trade as gas supply worries grow
Roslan Khasawneh and Oleg Vukmanovic - Reuters
A campaign by leading Arab powers to isolate Qatar is disrupting trade in commodities from crude oil to metals and food, and deepening fears of a possible jolt to the global gas market, where the tiny Gulf state is a major player.
jlne.ws/2sTEU9j
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