| October 25, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Futures Industry Still Grappling with Post-Trade Challenges, Expert Says
JohnLothianNews.com
In an interview with John Lothian of John Lothian News, Joanna Davies, a managing director at OSTTRA, shed light on the ongoing challenges in the futures industry's post-trade processes. The discussion centered around the findings of an Acuiti report and the industry's response to issues that flared up in 2020. Davies emphasized that the Acuiti report served as a validation of OSTTRA's understanding of the problems plaguing the industry. "Two themes emerged," she noted. "The risk introduced by the heavy-handed position transfer process in the ETD market, and the complexity and cost of collateral and margin optimization." The reaction from clients to the report was one of fatigue, according to Davies.
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| | | | | | Lead Stories | | | Options Market Suggests Less Than 10% Probability of Bitcoin Reaching $100,000 by Year-End
Ruholamin Haqshanas - Cryptonews
The options market associated with Bitcoin is signaling a relatively slim likelihood of the leading cryptocurrency soaring to $100,000 or more by the close of the year.
Current data from the prominent exchange Deribit shows a mere 9.58% probability of BTC surpassing the $100,000 threshold by the end of December.
/jlne.ws/3YoSfab
Selling Stock Concentration Is the ETF Industry's New Big Idea
Isabelle Lee - Bloomberg
Wall Street is rolling out a new breed of ETFs with varying degrees of exposure - or lack thereof - to megacap technology shares, which are coming off a rout Wednesday that underscored worries around stretched valuations.
For investors looking for a rebound in the Big Tech cohort, which looked likely in early Thursday trading after Tesla Inc. announced blowout results, BlackRock Inc. is introducing the iShares Nasdaq Top 30 Stocks ETF (ticker QTOP) and the iShares Top 20 US Stocks ETF (TOPT). These exchange-traded funds will track the biggest stocks in the tech-heavy Nasdaq 100 Index and the S&P 500, respectively. The tech giants are the largest members of both gauges.
/jlne.ws/4hdDyiV
Stock Investors Grapple With String of Coin-Toss Risk Events; Key factors like US election, earnings, rates are hard to call; Market could be event-driven and erratic through year-end
Jan-Patrick Barnert - Bloomberg
Equity investors face a bewildering sequence of tough-to-predict outcomes and confusing market signals. Patience and a steady hand look like valuable attributes in navigating through the noise.
There's the tight White House race, a European earnings season that's taking a turn for the better after a patchy start, a troubling grind higher in rates and a market seemingly caught between hedging for declines and preparing for a bullish leg higher.
/jlne.ws/3YE3JYA
Don't be beguiled by the apparent calm reigning in US bond markets; The outcome of the presidential election could yet cause a crisis of confidence
Gillian Tett - Financial Times
Right now the world is watching America's elections with bated breath. For while a new FT survey implies that Republican contender Donald Trump has a slim lead over vice-president Kamala Harris, the race seems set to remain on a knife edge until election day. But as pundits parse the polls, Paul Tudor Jones, the hedge fund luminary who first rose to fame by predicting the 1987 equity crash, thinks that investors would do better to watch something else - American bonds.
/jlne.ws/3YodF7a
Markets' wild 2024 election ride rolls on as US vote looms
Libby George and Naomi Rovnick - Reuters
Japan's election could prompt the next market gyrations in a year in which countries housing half the world's population will have voted. But markets remain fixated on the U.S. presidential election - the race that counts most for investors and global leaders alike.
/jlne.ws/4ei9Czv
The World's Biggest ETF Is Driving US Market Correlation; SPY has tremendous sway in markets on a daily basis
Vildana Hajric - Bloomberg
A few days ago, the world got notice of a new bid for a batch of ETFs that would look to go long and short two correlated stocks, each of which represents different concepts. For instance, one proposes to go long Bitcoin-holder MicroStrategy Inc. while shorting megabank JPMorgan Chase & Co., while another pits AI-chipmaker Nvidia Corp. against semiconductor stalwart Intel Corp. Yet another does the same with Tesla Inc. and Ford Motor Co. All in all, there were eight such proposed funds filed for by Tidal under the name "Battleshares."
/jlne.ws/3AbT6TA
Japan Group Backs Prioritizing Bitcoin, Ether for Crypto ETFs; Members include mainstream institutions such as MUFJ Trust; Also recommends a review of taxation on crypto assets
Gareth Allan - Bloomberg
A group of Japanese companies said discussion on allowing exchange-traded funds for cryptocurrencies should focus on major tokens such as Bitcoin and Ether, as the country contemplates whether to follow overseas moves to permit the instruments. The large market value and "stable track record" of those cryptocurrencies make them suitable for investors to "build up assets over the medium to long term," the group said in a set of proposals published on Friday. It also called for a review of taxation systems including separation of tax on income earned. The debut of crypto ETFs in the US earlier this year was considered a watershed moment for the digital-asset industry, which had long battled with regulators over putting out funds backed by Bitcoin and Ether. Japanese regulators have taken a more cautious approach so far, with the head of the Financial Services Agency casting doubt on the merits of such funds in an August interview.
/jlne.ws/3YDyCMM
Treasuries sell-off reverberates through global markets; Volatility returns ahead of US election as government debt is hit by stronger economic data
Ian Smith in London and Harriet Clarfelt in New York - Financial Times
A sell-off in US Treasuries has sent ripples through markets from gold to currencies, as investors warn that volatility is "locked in" ahead of next month's presidential election. US government bonds are on track for one of their worst months in recent years, with 10-year yields moving up almost 0.4 percentage points to 4.2 per cent after strong economic data and an emerging "Trump trade" sent traders scrambling to redraw their expectations of the path of interest rates. The reversal has come just weeks after the US Federal Reserve signalled that an era of easing had begun with a half-percentage point cut, prompting investors to expect at least a further quarter-point cut at both remaining meetings this year.
/jlne.ws/3Un7S0s
| | | | | | Exchanges | | | Nasdaq Migrates ISE Options Market to Fusion
Shanny Basar - Traders Magazine
Nasdaq said it has migrated International Securities Exchange (ISE) to Fusion, so that four out of six of its US options markets and one European equity derivatives market are now running on Fusion, its next-generation derivatives platform.
Adena Friedman, chair and chief executive, said on the third quarter results call on 24 October: "Four of our US options markets are running on Fusion, resulting in lower latency, higher throughput and overall increased productivity."
/jlne.ws/3NG2mlP
NYSE to Extend Trading to 22 Hours A Day on Arca Exchange; Exchange expands weekday trading hours from 1:30am to 11:30pm; Trades made during additional hours will be cleared by DTCC
Katherine Doherty - Bloomberg
The New York Stock Exchange is extending trading on its Arca equities venue to 22 hours on weekdays, capitalizing on global demand for US stocks. The largest US stock exchange will offer trading on Arca - one of its main venues - from 1:30 a.m. to 11:30 p.m. eastern time on all weekdays, excluding holidays, it said in a statement Friday. The move, subject to regulatory approval, makes US listed stocks, ETFs and closed-end funds available for trading outside the normal 9:30 a.m. to 4 p.m. window. NYSE said the DTCC will continue to clear all trades in the extended hours.
/jlne.ws/3Uik5Dx
ICE and NYSE Launch "My Vote" Ad Campaign to Celebrate the Power of Democracy Ahead of U.S. Election
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, and the New York Stock Exchange (NYSE), the world's largest stock exchange, today announced the launch of their "My Vote" ad campaign, designed to celebrate the power of democracy and encourage individuals to utilize their right to vote in the upcoming U.S. election. "As we approach election day, ICE and NYSE are launching this campaign to encourage individuals to take full advantage of their right to vote, the cornerstone of our democratic process and the foundation of our republic," said Jeffrey C. Sprecher, ICE Chair & Chief Executive Officer. "Financial markets rely heavily on the free flow of capital and other freedoms that our great nation has long championed."
/jlne.ws/3NGZJ3a
| | | | | | Regulation & Enforcement | | | First court hearing on alleged share options fraud case
SFC
Mr Tsang Chung Yu, a former independent non-executive director of Metaverse Yunji Technology Group Company Limited (Metaverse Yunji) and 11 other individuals were charged today in a fraud case involving the granting of share options following the joint operation of the Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) in January 2024 (Notes 1 and 2). Tsang and the others, appearing in the Eastern Magistracy for mention today, were charged for conspiracy to defraud by the ICAC, with an alternative charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence (Note 3). The total amount of suspected crime proceeds handled by them was approximately $4.35 million.
/jlne.ws/4eWAjKX
Turkey Considers Ending Ban on Short-Selling of Stocks; Fund managers say ban deters inflows by preventing hedges; Ban was tightened last year in wake of twin earthquakes
Kerim Karakaya - Bloomberg
Turkish officials are discussing easing a ban on short-selling of equities in hopes of attracting more overseas inflows, people familiar with the matter said. Turkey imposed the ban early last year after a pair of earthquakes devastated entire regions in the country's southeast. Officials are now considering easing the ban gradually or lifting it completely, but details haven't been finalized and could change, the people said, asking not to be named because the discussions are private. The first step may come on the BIST-50 index of the 50 largest listed companies, they said.
/jlne.ws/3UlO7GJ
Hedge Fund Regal Indicted in South Korea Short-Selling Sweep
Harry Brumpton - Bloomberg
South Korean authorities have indicted one of Australia's largest hedge funds for short selling, indicating Seoul has expanded its crackdown on such trading across the financial industry. Regal Funds Management Pty Ltd said it was indicted, along with a former employee, for an alleged violation of securities trading regulation in 2019. The charges follow a market-wide review of short selling by the Korean Financial Services Commission, it said in a statement on Friday. A spokesman for Seoul Southern District Prosecutors Office declined to comment.
/jlne.ws/3A2vvEV
Korea Said to Indict BNP Paribas for Illegal Short-Selling; Move comes after Regal Funds' indictment in broader crackdown; Regulator has plan to lift short-selling ban at end of March
Youkyung Lee - Bloomberg
South Korean prosecutors have indicted BNP Paribas SA for allegedly violating short-selling rules, according to people with direct knowledge of the matter, the latest development in the country's crackdown on such trades. The French bank was charged last week with violating local capital markets law, according to the people, who requested anonymity discussing a private matter. The Seoul Southern District Prosecutors' Office earlier this month indicted a global investment bank and a global hedge fund for conducting illegal short selling, without naming them, according to a spokesman at the office.
/jlne.ws/4hkdrqf
| | | | | | Moves | | | JP Morgan taps Deutsche Bank for new FX options trader; New appointment previously held positions at both Deutsche Bank and NatWest Markets.
Wesley Bray - The Trade
JP Morgan has appointed John Roberts as a new FX options trader, based in New York. He joins the firm from Deutsche Bank where he served as a currency options trader. Prior to this, Roberts spent five and a half years at NatWest Markets, most recently serving as a FX derivatives trader. Elsewhere in his tenure at NatWest Markets, he worked as a US rates strategies.
/jlne.ws/3C9Qi9V
| | | | | | Strategy | | | DJT Stock Is Already Volatile. The Options Market Suggests Trading Will Get Even Crazier.
George Glover - Barron's
Trump Media & Technology Group shares have been on a wild ride over the past month-and they are likely to swing even more dramatically once the presidential election is called, judging by stock options.
Data shared by online trading platform Trader Oasis with Barron's showed the Truth Social parent, which is up 139% over the past month, is likely to either tumble to under $20 or double in price to surge past $70 once we know the election winner.
/jlne.ws/4fjG70R
Don't Rule Out a Market Panic. How to Stress-Test Your Portfolio Before the Election.
Ian Salisbury - Barron's
With the 2024 election less than two weeks away, it's anyone's guess who will win the White House. One thing Americans can do to prepare for Nov. 5, is make sure their investment portfolios are prepared no matter what the outcome.
/jlne.ws/3BVsTt0
| | | | | | Miscellaneous | | | Wall Street Takes Tax-Loss Harvesting to the Next Level; Money managers have a clever new tactic to cut taxes for rich clients.
Justina Lee - Bloomberg
What do you get the wealthy client who has everything? The answer, if you're a clever money manager, is a loss-making investment. That's the thinking behind Wall Street's latest innovation, a cunning spin on the famous tax-loss harvesting which has been a controversial feature of wealth management for decades. Tax-loss harvesting is the strategy of selling losing investments to offset the tax owed on gains realized elsewhere in a portfolio. It's a powerful tool deployed often in equity holdings, but it has a key limitation: An investor doesn't always have losses to harvest. That can be especially true in a US stock market that keeps notching new records after tripling over the past decade.
/jlne.ws/40dvLLP
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| | | Jeff Bergstrom
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