| February 01, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
Options Discovery Episode 13: Option Behavior Over Time; Author and Mentor Dan Passarelli Talks Options Greeks and Price Behavior With JLN's Alex Teng
JohnLothianNews.com
In this episode of Options Discovery, Alex Teng talks about how an option's intrinsic and extrinsic values change over time as well as the decay of time value due to theta. Alex also speaks with author, former trader, trading mentor, and business media personality Dan Passarelli, to ask questions related to how option values change over time. You can find more info about Dan on his website MarketTaker.com.
Watch the video »
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Option Price Behavior Over Time and the Options Greeks; Dan Passarelli of Market Taker Mentoring Explains These Concepts and More in This Full Interview With JLN's Alex Teng
JohnLothianNews.com
In this full interview, Alex speaks with author, former trader, trading mentor and business media personality Dan Passarelli, about how option values change over time as well as the intrinsic and extrinsic value of options. You can find more info about Dan on his website MarketTaker.com.
Watch the video »
| | | | | | Lead Stories | | | Options trading desks 'flying blind' after derivatives platform hit by ransomware attack
Joseph Adinolfi - MarketWatch
A popular derivatives trading platform used by options dealers and investment banks was hit with a cyber attack on Tuesday, disrupting trading of derivatives tied to stocks, bonds and currencies.
The Dublin-based ION Markets, the target of the attack, was forced to shut down some of its services temporarily, a decision that impacted some customers' ability to book and process trades, according to media reports. While the company has confirmed the hack, it has offered few details about the incident.
/jlne.ws/3HOXlpa
Bearish Momentum Sweeps Through US Rates Market Just Before Fed
Edward Bolingbroke - Bloomberg
While swaps tied to the Federal Reserve's benchmark interest rate show a near 90% probability that the central bank announces a 25 basis-point rate hike on Wednesday, traders are leaving nothing to chance.
Monday saw two big trades in federal funds futures that would pay out if the central bank opts to surprise with a 50 basis-point rate hike instead. And the latest weekly positioning data from the Commodity Futures Trading Commission showed asset managers have been closing out long-duration positions, while hedge funds have extended a net short position in 10-year Treasuries to multi-year lows.
/jlne.ws/3HtG6YU
Liquidity loses top slot as investors' biggest concern after six years; Traders' confidence was bolstered after retaining their ability to buy and sell during last year's ructions
Nikou Asgari - Financial Times
Liquidity is no longer the biggest worry for traders in financial markets, following a year in which markets survived a series of major shocks without the ability to buy and sell becoming too severely impaired. Instead, volatility has climbed to the top of the list of traders' concerns in 2023, as rising global interest rates and geopolitical tensions spark big moves in markets, according to a survey of traders by JPMorgan.
/jlne.ws/3jouBdo
'Extreme leverage'? Adani's debt-driven expansion under scrutiny
Benjamin Parkin - Financial Times
A decade ago Gautam Adani outlined the strategy behind the rapid rise of his business empire: leverage one company to fund another's expansion. "Either you sit on the pile of cash or you continue to grow," he told the Financial Times. "There is no other way you can do it."
It is a method that has served the Indian entrepreneur well as his Adani Group scaled up and diversified in industries from ports to power. He has become one of the world's richest people in the process, with a fortune of more than $100bn by the start of this year.
/jlne.ws/3XX0d8T
Adani Enterprises scraps $2.5 billion stock offering amid scrutiny from short seller
Saqib Iqbal Ahmed - MarketWatch
Indian billionaire Gautam Adani's flagship company reversed course and canceled a share sale of up to $2.5 billion, as it continues to grapple with the fallout from fraud allegations by U.S. short seller Hindenburg Research.
A day earlier, Adani Enterprises had collected enough investor bids to pull off the so-called follow-on public offering, or FPO. Adani Enterprises is one of several listed companies within Mr. Adani's namesake conglomerate, the Adani Group.
/jlne.ws/3Dx13B2
Analysis: Hawkish Fed could hobble volatility funds' stock buying spree
Reuters
Volatility-linked funds estimated to be buying as much as $2 billion in U.S. equities daily are helping drive this year's rebound in stocks and may ramp up purchases in coming weeks, though a hawkish Federal Reserve could spoil the party.
The S&P 500's (.SPX) 6.2% surge in January has been accompanied by a drop in measures of volatility across the board. Daily swings in the index over the past month were the smallest since early 2022, while the Cboe Volatility Index (.VIX) also stands near a one-year low.
/jlne.ws/3juu9ds
Brace for 'tinderbox-timebomb' market crash worse than 1929, hedge fund manager says
Anviksha Patel - MarketWatch
That was Universa Investments chief investment officer Mark Spitznagel, warning investors that swelling global debt will eventually lead to a doomsday market crash similar to the Great Depression of the 1930s.
In its 15-year anniversary letter seen by MarketWatch, the hedge fund, advised by Black Swan author Nassim Taleb, issued a new warning on debt levels saying the world has become a "contagious inferno" that could crash the markets, though he didn't offer a timeline to when this would happen.
/jlne.ws/3HQ80Qu
FIA announces 2023 Hall of Fame honorees
FIA
FIA has announced the induction of 12 new members to the FIA Hall of Fame. The new members will be honored at an awards ceremony during FIA's annual International Futures Industry Conference in Boca Raton, Fla., on March 15.
"We established the FIA Hall of Fame to recognize the people who have made exceptional contributions to the growth and development of the futures, options and listed derivatives industry," said President and CEO of FIA Walt Lukken. "This year's inductees represent business leaders, advocates, policymakers, and visionaries who have provided the leadership and support necessary to keep our industry growing. We are grateful for their service and honored to present them with this recognition."
/jlne.ws/3XTDbjb
| | | | | | Exchanges | | | Virtu Reports Record Year in Options Market Making
Anna Lyudvig - Traders Magazine
Doug Cifu, CEO of Virtu Financial, said that the company had another record year in options market making in 2022? as it continues to expand across venues, asset classes and geographies. "We continue to view our investment in this business as a key long-term engine of growth," he said. "We continue to view our investment in this business as a key long-term engine of growth," he said.
/jlne.ws/3l29PR5
Abaxx Tests Future of Physical Contracts in Quest for LNG Benchmark
Jacob Dick - Natural Gas Intel
As global natural gas market volatility continues to raise questions about the effectiveness of established futures benchmarks, Abaxx Technologies Inc. is pursuing a solution through physically-settled LNG contracts. Through a unit based in Singapore, Abaxx is preparing to launch physically-settled contracts for the three major liquefied natural gas markets: Northwest Europe, North Asia Pacific and the Gulf Coast. The contracts could serve as an alternative to financially-settled instruments like the Japan-Korea Marker (JKM) that currently dominate international gas trading, including for LNG.
/jlne.ws/3kS9Qad
| | | | | | Regulation & Enforcement | | | NYSE Glitch Caught Up in Fight Over SEC Rewrite of Trading Rules
Katherine Doherty and Lydia Beyoud - Bloomberg
Last week's glitch at the New York Stock Exchange has become a pawn in the ongoing battle over a rewrite of stock-trading rules proposed by US regulators.
The manual error, which caused wild market swings when trading opened on Jan. 24, is now being cited as an example of why more trading shouldn't be pushed onto exchanges such as NYSE and Nasdaq Inc. Major broker-dealers Charles Schwab Corp. and Robinhood Markets Inc. contend that the incident was a reason for concern and an argument against exchange-run auctions.
/jlne.ws/3X3SW6c
2023 Outlook: US Rule Proposals Impacting Swap Dealers and Derivatives Clearing
DerivSource
The Securities Industry and Financial Markets Association (SIFMA) monitors and responds to new global regulatory proposals. In a Q&A with Kyle Brandon, SIFMA's managing director, head of Derivatives Policy and Bill Thum, managing director and associate general counsel within SIFMA's Asset Management Group (SIFMA AMG), we explore the possible changes afoot in the derivatives clearing space and swaps dealer regulation space in 2023.
/jlne.ws/3HLZz8t
Statement of Commissioner Kristin N. Johnson Regarding IOSCO Publication of Principles for the Regulation and Supervision of Commodity Derivatives Markets - Final Report
CFTC
The International Organization of Securities Commissions (IOSCO) has long taken a leadership role in providing guidance and best practices for regulation of commodity derivatives markets. In 2010 and 2011, the G20 Leaders called for further work on regulation and supervision of the commodity derivatives markets, "enhanced transparency in both cash and derivatives markets as previously recommended by IOSCO," and "asked IOSCO to finalize...its recommendations on regulation and supervision in this area especially to address market abuses and manipulation, such as through position management powers, including the authority to set ex-ante position limits where appropriate, among other powers of intervention."
/jlne.ws/3Hnffh5
| | | | | | Moves | | | Michael Torretta Joins FIA Tech as Head of Strategic Alliances
FIA Tech
FIA Tech, the futures industry's leading technology provider, today announced that JP Morgan veteran Michael Torretta has joined the firm in the newly created role of Head of Strategic Alliances. Mike is based in New York and reports to Chief Executive Officer Nick Solinger. Mike Torretta spent over 20 years at JP Morgan, most recently as Executive Director, Product Development in the global clearing and execution business. Mike's career at JP Morgan spanned exchange traded and OTC derivatives, FX prime brokerage and fixed income/securities prime brokerage and he held positions covering but not limited to operations, sales/execution , client service and product development.
/jlne.ws/3kXqq8K
| | | | | | Strategy | | | Options Market Suggests Turmoil May Be Lurking Around the Corner
Michael Lebowitz - Investing.com
On October 12, 1987, a week before Black Monday, the Wall Street Journal warned of the potential for significant market turmoil. Per the article: The use of portfolio insurance "could snowball into a stunning rout for stocks." Today, we are increasingly alarmed that another trading tool similar to portfolio insurance could set markets up for a bout of turmoil.
/jlne.ws/3kX2WRc
January Recap
Cboe (Video)
@JoeTigay with the January recap and a look at homebuilders in today's #Vol411
/jlne.ws/3YdrWSp
| | | | | | Education | | | What Four Years of BTC Options Trading Teaches Us
CoinDesk
For the first time ever, a research report has been released that looks back at four years of crypto options markets data. Based on underlying data sourced from Deribit and then analyzed with tools from Amberdata, the report, entitled "BTC OPTIONS: Dissecting Volatility Trends," shines fascinating new light onto the fast-emerging world of crypto options. The report offers valuable insights to traders who are looking to run successful trading strategies based on historical data.
/jlne.ws/3X0VBgB
| | | | | | Miscellaneous | | | Traders See AI Technology Shaping Their Future, JPMorgan Finds
Greg Ritchie - Bloomberg
Traders are betting artificial intelligence and machine learning will have the biggest impact on financial markets in the coming years.
More than half of respondents to a JPMorgan Chase & Co. survey of 835 institutional and professional traders said those technologies would have the most influence on trading in the next three years. That's up from a quarter in 2022.
/jlne.ws/3WRUGz9
What Is Supercore Inflation?
Brian Whitton and Dion Rabouin - WSJ
You may be familiar with the consumer price index, the most well-known measure of U.S. inflation. You may even know about core inflation, which strips out food and energy prices that tend to be volatile. Since November, the Fed has focused on an even narrower measure to guide interest-rate policy: supercore inflation. So what exactly is it?
/jlne.ws/3WPwXja
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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
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