| July 12, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | The CME Group announced that it is amending CME and CBOT Rule 524, which is about things called TAS, BTIC and TACOs. The CME is adding a new acronym to the rule, the TMAC.
TAS stands for Trading at Settlement and BTIC is Basis Trade at Index Close. A TACO is Basis Trade at Cash Open, while the new TMAC is not a famous basketball player (Tracy McGrady), but rather Trade Marker at Close.
I am working to set up an interview with the CME to explain the TMAC better, but it seems like it is designed to help give traders who use European style options greater accuracy for the hedging of any related delta near or at expiration. In the meantime, you can learn more about TMAC from the CME Group's TMAC FAQs.
This is what the CME Group says about TMAC: "Access Equity Index futures close with greater certainty using TMAC, which utilizes the respective index futures fixing at 4:00 p.m. ET daily as the marker against which all trades are priced. TMAC allows market participants a way to trade futures at a spread to this marker and is available on four major equity benchmarks beginning July 31." TMAC is pending regulatory approval. ~JJL
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Option Volatility Indicator Developer Guy Cohen Talks to JLN about the OVI, His Career and Building a Hedge Fund
JohnLothianNews.com
Guy Cohen was interviewed by John Lothian of John Lothian News about how he found his way to the markets, about his best selling options books, which are on every trader's shelves, and on the Options Volatility Indicator, a patented tool to help traders make sense of position-building options activity.
Listen to the podcast »
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Tom Hutchinson - Open Outcry Traders History Project - Part Three
JohnLothianNews.com
In part three of the JLN Open Outcry Traders History Project interview with Tom Hutchinson, the founder of Belvedere Trading, Hutchinson spoke about how he worked the brokers in the trading pit to get them to look his way more often.
Watch the video »
| | | | | | Lead Stories | | | Options hedges against a break in US stock market calm at record high
Saqib Iqbal Ahmed - Reuters
Options traders are taking advantage of muted U.S. stock market gyrations to load up on contracts that would jump in value should equities see a big drop, boosting the number of open contracts on Wall Street's most popular volatility gauge near a record high. The one-month moving average of open contracts on the Cboe Volatility Index (.VIX) hit 13.80 million on Wednesday, close to the record high of 13.85 million contracts logged in late June, according to Refinitiv data.
/jlne.ws/44kHuHv
Wall Street Tabling Doomsday Scenarios for U.S. Economy
Gunjan Banerji - WSJ
Many on Wall Street entered 2023 with a dour forecast for the U.S. stock market and economy. A recession seemed all but certain.
Months later, investors are increasingly embracing the idea that the domestic economy will avert a downturn. This morning's inflation dataâwhich came in cooler than expectedâis leading some to double down on that view. Stock futures are ripping higher, while yields on 10-year Treasurys are dropping.
/jlne.ws/3NRHKXs
BOE Warns of Global Financial Stability Risk From Hedge Funds' US Treasury Bets
Greg Ritchie - Bloomberg
A leveraged trade in US Treasury futures that has regained popularity with hedge funds poses a risk to global financial stability, according to the Bank of England.
Known as the basis trade, the strategy typically involves exploiting small price differences between cash bonds and futures, and is attracting scrutiny from US regulators. On Wednesday, the BOE added its voice, saying the risks associate with these trades have mostly not been tackled by regulators.
/jlne.ws/3rpV0uW
CPI Report: Inflation Is Backing Off. Why the Fed Is Pressing On.
Megan Cassella - Barron's
June's larger-than-expected slowdown in inflation is a dose of good news for the Federal Reserve as it works to return the economy to price stability. The bad news? The central bank still has work to doâand the job will get more difficult from here.
Consumer prices rose at a 3% annual pace last month, marking a significant slowdown from May's 4% pace and coming in below the 3.1% level that economists had expected. Growth in core prices, which strips out the volatile food and energy categories, also slowed more than expected to a 4.8% annual pace from 5.3% in May.
/jlne.ws/3pTpQvv
Hedge funds grow more cautious on crypto after turmoil
Nell Mackenzie and Elizabeth Howcroft - Reuters
Global hedge funds not specialising in crypto assets have grown skittish from recent industry turmoil and this has lead to an exit from the sector, a survey showed on Tuesday. The proportion of traditional hedge funds investing in crypto-assets has dropped to 29% this year from 37% in 2022, the report by PwC, CoinShares and the Alternative Investment Management Association (AIMA) said.
/jlne.ws/3XN7Uzg
| | | | | | Exchanges | | | Cboe exchange to partner with Coinbase on bitcoin market surveillance in ETF push
John McCrank - Reuters
Exchange operator Cboe Global Markets (CBOE.Z) on Tuesday filed amended applications to list and trade shares of three spot bitcoin exchange-traded funds, including one by Fidelity, to add surveillance-sharing agreements with crypto-trading platform Coinbase (COIN.O).
Shares of Coinbase closed up 9.8% at $89.15 on Tuesday and hit their highest level since Aug. 16 of last year.
/jlne.ws/3pIdAOz
Cboe Europe Derivatives: Fixing Europe's single-stock options markets with a more capital-efficient market structure (Sponsored Article)
The Trade
The TRADE speaks with Cboe Europe president Natan Tiefenbrun, the exchange's head of European derivatives, Iouri Saroukhanov, and Vikesh Patel, president, Cboe Clear Europe, about how Cboe Europe Derivatives (CEDX) is bringing a pan-European and capital-efficient market structure to European single stock options.
/jlne.ws/3rm1hYB
| | | | | | Regulation & Enforcement | | | Wall Street Is Fighting the Non-Compete Ban in New York
Hema Parmar, Diana Li, Marnie Muñoz and Jesse Levine - Bloomberg
Last month, New York lawmakers approved one of the nation's toughest bans on non-compete agreements. While the measure awaits Governor Kathy Hochul's signature, lobbying groups from the finance industry and other business associations have gone to work pushing for exceptions.
/jlne.ws/3XN1Vua
| | | | | | Strategy | | | Inflationary Assets
Cboe (Video)
In #Vol411, @JoeTigay lets us know that CPI data was published this morning, #oil and #gold prices indicate that #inflation will be higher than previously predicted, the $VIX Index is back below 14 level today and more.
/jlne.ws/44lDXcd
| | | | | | Miscellaneous | | | The extraordinary career of FIA EPTA's Mark Spanbroek
FIA's MarketVoice
Mark Spanbroek has retired after three decades of service to global derivatives markets, including helping to establish the FIA European Principal Traders Association in 2011. At FIA's IDX conference in June, Mark sat down with veteran journalist Jeremy Grant to discuss his achievements and his perspectives on how derivatives markets have evolved over his impressive career.
/jlne.ws/3D9LE9j
| | | | | | | | | JLN Options is sponsored by: | | | | | | | | | | | | | | | | | | | |
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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
Publisher | | | Sarah Rudolph
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| | | Jeff Bergstrom
Editor
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