| December 13, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
Introduction to Options Greeks and Options Theory; CQG's Vp of Execution Technology, Kevin Darby, Talks Options and Tech With JLN's Alex Teng.
JohnLothianNews.com
In this Options Discovery Full interview Kevin Darby, the VP of execution technology at CQG, breaks down the basics of options theory and the options greeks. Kevin also talks about new technology at CQG and describes the recent announcement on the joint innovation lab between CQG and NUTS Finance called Optio Research.
Watch the video »
| | | | | | Lead Stories | | | Options traders brace for big swings as U.S. CPI data, Fed meeting loom
Saqib Iqbal Ahmed - Reuters
Options traders are bracing for a week of swings in U.S. stocks ahead of key inflation data, the Federal Reserve's last policy meeting of 2022 and the final monthly options expiration of the year.
Inflation data and the Fed's outlook on monetary policy could give traders more clarity on how much further the central bank may need to raise rates in its battle to cool consumer prices, potentially determining the trajectory of a late-year rally in stocks that has seen the S&P 500 bounce 14% off its October lows. The index remains down 17% for the year.
/jlne.ws/3YfBAVL
Traders Used Turbocharged Options to Bet on Post-CPI Rally
Eric Wallerstein - WSJ
Ahead of Tuesday's big post-CPI rally, traders tapped a strategy that's become increasingly popular this year to bet on gains: ultrashort-dated contracts tied to the S&P 500 that expire within a day. Known as call options, the contracts give investors the right to buy a security at a certain price by a certain date.
/jlne.ws/3YijZMP
VIX Fell Into a Death Cross. That's Usually Good for the S&P 500
Jess Menton - Bloomberg
A contrarian indicator of stock-market volatility is sending an encouraging sign for US equities in the coming weeks.
The Cboe Volatility Index, or VIX, fell into a "death cross" technical formation on Friday for the first time since August, when US equity markets swooned on renewed fears that the Federal Reserve would keep aggressively raising interest rates to fight inflation.
/jlne.ws/3Po22rU
CME's Last Open-Outcry Pit Makes the Leap to a Post-Libor World
Elizabeth Stanton and Alyce Andres - Bloomberg
More than a decade after the Libor-rigging scandal shocked the financial industry, derivatives traders in CME Group Inc.'s last open-outcry pit are finally shifting their focus to contracts based on the replacement for London Interbank Offered Rates.
The number of options on futures linked to the Secured Overnight Financing Rate, or SOFR, recently overtook the corresponding figure for eurodollar futures that settle at Libor rates.
/jlne.ws/3PrgIql
Stocks Give Back Gains. Everyone's Waiting for the Fed.
Jacob Sonenshine and Joe Woelfel - Barron's
The stock market is trying to hang onto gains after the latest inflation data came in lower than expectations. Investors are now waiting for Wednesday's Federal Reserve decision.
The Dow Jones Industrial Average has added 85 points, or 0.3%, while the S&P 500 has gained 0.7% and the Nasdaq Composite has advanced 1%. The Dow briefly traded in negative territory after being up as much as 2% earlier in the session.
/jlne.ws/3HzuAwT
Why November U.S. CPI data is seen as a 'game-changer' for financial markets
Vivien Lou Chen - MarketWatch
November's softer-than-expected consumer-price index is being described by traders and financial-market analysts as a "game-changer" that demonstrates inflation is swiftly easing, reducing the likelihood Federal Reserve policy makers will push interest rates above 5% in 2023.
/jlne.ws/3FRzKmQ
ZAR/USD: South Africa Rand Volatility Soars Ahead of Ramaphosa Impeachment Fate
Colleen Goko - Bloomberg
Overnight implied volatility on the South African rand touched the highest level in more than two and a half years on Tuesday, ahead of a decision by lawmakers on whether to proceed with impeachment proceedings against President Cyril Ramaphosa.
/jlne.ws/3uKFf02
| | | | | | Exchanges | | | Cboe FX and State Street become latest to join oneZero's EcoSystem; The move marks oneZero's continued expansion of liquidity provision, giving Cboe FX and State Street access to more than 200 FX brokerages in the oneZero network.
Wesley Bray - The Trade
Multi-asset enterprise trading technology provider oneZero has added Cboe FX and State Street to its network of liquidity providers and venues. As part of the move, the two firms will have access to more than 200 FX brokerages in the oneZero network which make over 10 million transaction and 150 billion quotes per day across retail and institutional FX markets.
/jlne.ws/3UP1qwB
Cboe Global Markets Announces Date of Fourth-Quarter 2022 Earnings Release and Conference Call
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today said it will announce its financial results for the fourth quarter of 2022 before the market opens on Friday, February 3, 2023. A conference call with remarks by the company's senior management will begin at 7:30 a.m. CT (8:30 a.m. ET).
/jlne.ws/3YgnSlm
Quarterly Report on Bank Trading and Derivatives Activities
US Office Of The Comptroller
The Office of the Comptroller of the Currency (OCC) reported cumulative trading revenue of U.S. commercial banks and savings associations of $12.7 billion in the third quarter of 2022. The third quarter trading revenue was $2.4 billion, or 22.9 percent, more than in the previous quarter and $5.8 billion, or 84.1 percent, more than in the third quarter of 2021.
/jlne.ws/3YbkfNs
| | | | | | Regulation & Enforcement | | | SEC Enforcement Priorities
FIA
A year into Chairman Gary Gensler's tenure at the SEC, Cleary Gottlieb lawyers will present on shifts in SEC Enforcement priorities and tactics, particularly as they relate to derivatives. The panel will discuss SEC tactics such as the increasingly sophisticated use of whistleblowers and trading data surveillance, and evolving enforcement priorities, such as the SEC's focus on disclosures, sales practices, and other policies and procedures related to sales of complex products and trading strategies, with examples involving complex options-based strategies and variable annuities. The panel will also discuss SEC enforcement cases under Reg. BI, trends in market manipulation and insider trading that apply to derivatives, and a round-up of other enforcement actions that are relevant to derivatives, such as valuation cases and the SEC's potential regulation of index providers.
/jlne.ws/3Bw8I1s
A UK Slant on Basel III
International Swaps and Derivatives Association
Over the coming years, the final parts of the Basel III framework will be implemented around the world, completing an important phase of the post-crisis financial regulatory reforms. At the end of last month, we got a sense of how the UK intends to implement the rules when the Prudential Regulation Authority (PRA) published legislative proposals, just over a year after the European Commission (EC) came out with its own proposals in October 2021. The PRA has opted to stay fairly close to the Basel standards, but it has proposed some targeted changes that it says would better capture risk and support the competitiveness of the UK.
/jlne.ws/3FqZvIT
| | | | | | Moves | | | Prime Trading Hires Starbucks Alum for Foray Into Commodity Bets; Chicago firm will now trade soft commodities including coffee; Kljunak's hire adds to Prime's traditional trading strategies
Alyce Andres - Bloomberg
After 35 years of delivering profits from a safe and steady business model, Prime Trading decided to push the envelope. The proprietary trading firm, one of the mainstays of the Chicago financial market with a focus on options and other derivatives, recently hired a former Starbucks Corp. trader to take it into new territory: betting on the direction of commodity prices in the futures market. Prime wasn't looking for a new strategy before executives had a chance meeting with Ksenia Kljunak, a 33-year-old Croatia native with a degree in Management from University of Warwick who has also worked for Louis Dreyfus Co.
/jlne.ws/3VLelRD
| | | | | | Strategy | | | S&P 500, Tesla Options Dominate Trading
Gunjan Banerji - WSJ
All of the top 20 options contracts traded in the U.S. listed market today are tied to either SPY, the ETF tracking the S&P 500, or Tesla, according to Cboe Global Markets data.
/jlne.ws/3FPpyLr
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