| March 22, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Worldwide volume of exchange-traded derivatives reached 16.28 billion contracts in February, the second highest level ever recorded, according to the FIA's February 2024 Volume and Open Interest Report. This was down 2.7% from the record month of January 2024 but up 92.4% from February 2023. Options continue to gain in popularity. Global trading of options reached 14.19 billion contracts in February, up by more than 126% from last year. Global trading of futures reached 2.09 billion contracts in February, down 4.5% from the same month last year. On a year-to-date basis, volume in the first two months of the year was 33.07 billion contracts, up 94.8% from the first two months of 2023. Total options volume for the year so far was 28.68 billion contracts, up 127.3% from the previous year. Total futures volume was 4.39 billion contracts in 2023 so far, up 0.8% from 2022. Total open interest at the end of February was 1.29 billion contracts. February's data on futures and options trading is accessible in either a spreadsheet - accessible through a link - or a set of interactive visualizations called the FIA ETD Tracker. You can access both on the FIA website HERE. ~SAED
| | | | | | Lead Stories | | | Options Show Bitcoin Traders Are Preparing for a Deeper Slump; The open interest for puts has jumped over the last 24 hours
David Pan - Bloomberg
Options suggest that traders are bracing for an extended decline in Bitcoin with demand for US exchange-traded funds holding the cryptocurrency beginning to wane.
Bitcoin put options expiring on March 29 exceeded call options in volume in the past 24 hours. That has nudged the put-to-call ratio, which is a key indicator of market sentiment for the underlying asset, higher, signaling a bearish outlook in the near term, according to data from crypto options exchange Deribit. The strike prices of puts are clustered around $50,000 and $45,000 on the platform. Bitcoin traded at around $63,500 on Friday.
/jlne.ws/3x40wGl
'Fear gauge' within expectations, some say; Several options specialists dismiss claims that structured products are distorting the Vix
Helen Bartholomew - Risk.net
More and more options specialists are pushing back against the idea that equity index volatility is being suppressed by an abundance of options-selling strategies.
The Cboe Volatility Index, which measures the implied 30-day volatility of the S&P 500, has averaged 13.5 this year compared to a historical norm of around 20.
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Reddit Options to Begin Trading Monday Amid IPO Launch
Thomas Westwater - tastylive
The long-awaited IPO of the year has come, and Reddit (RDDT) had a largely successful first day of trading on yesterday when the company's initial public offering (IPO) was listed on the New York Stock Exchange (NYSE). It rose nearly 50%, eclipsing its targeted IPO valuation.
The surge was a welcome sign for markets that have seen a series of IPO flops over the past several years. Reddit hasn't notched a profit in nearly 20 years, and it's the first social media IPO since Pinterest (PINS) debuted in 2019.
While that type of momentum would be hard to maintain, RDDT held much of those gains, dropping only 1.5% today through early afternoon trading. Still, the stock is holding most of its gains from yesterday, which is encouraging for investors going into the weekend.
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Bitcoin ETFs are not driving gold ETF outflows, says JPMorgan; Research counters recent claims that investors are switching to vehicles holding 'digital gold'
Steve Johnson - Financial Times
Bitcoin has been dubbed "digital gold" but the rapid growth of bitcoin exchange traded funds in the US has not driven outflows from gold ETFs, according to investment bank research.
As of March 14, bitcoin ETFs had vacuumed up a net $10.6bn year-to-date globally, even accounting for chunky outflows from the Grayscale Bitcoin Trust (GBTC), at $23.7bn still the world's largest such vehicle, according to data from JPMorgan and Bloomberg.
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India's forex reserves hit record high
Siddhi Nayak - Reuters
India's foreign exchange reserves (INFXR=ECI), rose for a fourth straight week to hit a record high of $642.49 billion as of March 15, central bank data showed on Friday.
The reserves rose by $6.4 billion in the reporting week, after rising $20 billion in the previous three weeks.
The Indian economy is seen growing at 7.6% this year, one of the fastest among major global economies. This helped draw $20.7 billion in overseas equity flows in 2023 and $1.85 billion so far this year. In addition, India's inclusion on global bond indexes has drawn over $10 billion since late September.
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| | | | | | Exchanges | | | Brazilian market to use Cboe Global Markets' VIX Index methodology
Lucy Carter - MarketsMedia
S&P Dow Jones Indices (S&P DJI) and the Brazil exchange, B3, have launched an implied volatility index to monitor Brazil's domestic market. The S&P/B3 Ibovespa VIX index measures near-term volatility implied by the Bovespa Index (Ibovespa), the main performance indicator of B3 traded stocks. It provides a 30-day view of the Brazilian market's volatility expectations, with the goal of giving market participants a better understanding of the Brazilian equity market and a way to measure risk perception.
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Cboe Global Markets Announces Date of First-Quarter 2024 Earnings Release and Conference Call
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, will announce its financial results for the first quarter of 2024 before the market opens on Friday, May 3, 2024. A conference call with remarks by the company's senior management will begin at 7:30 a.m. CT (8:30 a.m. ET). A live audio webcast for the conference call and the presentation that will be referenced during the call will be available on the Investor Relations section of Cboe's website at ir.cboe.com under Events. The presentation will be archived on the company's website for replay. A replay of the recording is expected to be available two hours after the conference call ends. To listen to the live conference call via telephone, please dial (800) 715-9871 (toll-free) or (646) 307-1963 (toll) and use the Conference ID 2619514.
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SGX Group seeks to refine cap on clearing members' liability for multiple defaults
SGX
Singapore Exchange (SGX Group) is proposing to refine the existing cap on a clearing member's liability to meet default losses arising from multiple events of default. This cap is imposed on clearing members of SGX Group's central counterparties (CCPs), namely The Central Depository (Pte) Limited (CDP) and Singapore Exchange Derivatives Clearing Limited (SGX-DC). Subject to market feedback, the proposal will limit a non-defaulting clearing member's liability to meet multiple default losses arising within a 30-day period to three times the aggregate of its funded and unfunded clearing fund contributions (Prescribed Contribution) as determined at the start of the 30-day period.
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| | | | | | Regulation & Enforcement | | | Federal Court Orders Florida Forex Trader to Pay $3.4 Million for Futures, Forex, Options Scheme
CFTC
The Commodity Futures Trading Commission today announced the U.S. District Court for the Southern District of Florida entered a consent order on March 20 imposing a permanent injunction, civil monetary penalty, restitution, and equitable relief against Joseph Carvajales (Carvajales), a resident of Florida. The order requires Carvajales to pay $2.4 million in restitution to defrauded customers and a $1 million civil monetary penalty. The order also imposes permanent trading and registration bans and a permanent injunction prohibiting the defendant from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
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| | | | | | Strategy | | | Is Options Selling by ETFs Distorting the VIX? Some Market Strategists Think So.
Randall W. Forsyth - Barron's
There's nothing for investors to fear these days but the lack of fear itself, to turn FDR's famous phrase on its ear, since complacency typically precedes a stock market drop. But what happens if the market's so-called fear gauge is being distorted by the surging popularity of exchange-traded funds that provide high income through the alchemy of options?
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Rate Cuts
Cboe (Video)
In the #RUTreport, @AngieMiles covers active Russell 2000 Index #options and expected moves in the index next week. (Remember #markets will be closed next Friday.) #RUT
/jlne.ws/3x403US
| | | | | | Miscellaneous | | | Lauren Young Finds Community with The Art Therapy Project
Lauren Young - Cboe
Like many, the Covid-19 pandemic spurred Lauren Young to search for new ways to connect with her community. As she reflected on her own passions, Lauren decided to pursue nonprofit board service.
Lauren turned to Board Lead, a service that links professionals with organizations looking for high caliber board members and discovered The Art Therapy Project (TATP). TATP is a New York-based nonprofit organization that provides group art therapy in safe and inclusive spaces for people in need of mental health services. The organization's work aligned with Lauren's interests in psychology and mental health advocacy and love of art, so she joined the organization's board in 2021.
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