| February 05, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | The February edition of Focus from the World Federation of Exchanges (WFE) spotlights BME CEO Javier Hernani, who offers insights into the upcoming WFE Clear convention occurring in Madrid, Spain, March 19th to 21st, 2024. In addition, Stephen Dorrian, Cboe Head of Market Data & Access Services for Europe, and Juan Manuel Olivo Tirado, BMV's Promotion and Issuers Director, reflect on what they learned from the WFE's Market Infrastructure Certificate. Also, Exberry CEO Guy Melamed discusses the long-awaited tipping point in the transformation of market infrastructure, the next step in the evolution of financial exchanges and associated systems. There's more to learn in the February issue of WFE Focus HERE. ~SAED
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Term of the Week - The Price of an Underlying Asset
JohnLothianNews.com
The basics of how the price of an underlying asset affects options prices.
Watch the video »
| | | | | | Lead Stories | | | Options Trading Is Going Gangbusters. The Market Now Has a Data 'Superhighway' to Match.
Alexander Osipovich - The Wall Street Journal
A key piece of infrastructure underpinning the options market is getting an upgrade, aimed at helping it cope with increased trading volume. When markets open this morning, traders will be using a new, higher-capacity version of the data feed that broadcasts price quotes and trades from U.S. options exchanges, according to the Options Price Reporting Authority, the industry group that oversees the data feed.
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China Tightens Some Trading Restrictions for Domestic and Offshore Investors
Bloomberg
China is tightening trading restrictions on domestic institutional investors as well as some offshore units as authorities fight to stem a deepening stock rout, according to people familiar with the matter. Officials this week imposed caps on some brokerages' cross-border total return swaps with clients, limiting a channel that can be used by China-based investors to short Hong Kong stocks, said the people, asking not to be identified discussing a private matter. At the same time, some Chinese brokers that use the channel to buy mainland shares for their offshore units were told not to reduce their positions, the people said.
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China Stocks Post More Wild Swings After Beijing Stability Vow
Bloomberg News
Chinese stocks were caught in another volatile session Monday following last week's rout, as investors assessed the latest pledges by policymakers to stabilize the slumping equity market.
Shares rebounded in the afternoon as the securities regulator said it will take steps to prevent risks stemming from share pledges. The CSI 300 Index ended the day 0.7% higher after earlier dipping 2.1%. Gauges of small cap shares pared losses but still closed deep in the red.
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China has vowed to save its crashing stock market, but investors are just not convinced
Huileng Tan - Business Insider
China's stock market watchdog upped its game over the weekend after its brutal week of selloff, vowing to prevent "abnormal market fluctuations" â but stock market investors don't seem quite convinced.
On Sunday, the China Securities Regulatory Commission, or CSRC, said it will crack down on short-selling and insider trading, attract more investment from medium and long-term funds, and "seriously listen to the voices of investors." It didn't specify what measures it would be taking.
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Hedge Funds' Mega Returns Set Off Demand Spiral for Catastrophe Bonds; Mainstream investors drawn to market dominated by hedge funds; Swiss Re cat bond index soared 20% last year, marking a record
Sheryl Tian Tong Lee and Gautam Naik - Bloomberg
/jlne.ws/3Uwj1gn
Bitcoin ETFs launch promotional blitz after Google allows ads
Will Schmitt - Financial Times
Asset managers from BlackRock to Grayscale have launched an online advertising blitz for their bitcoin exchange traded funds, taking advantage of a change to Google's marketing rules on promoting cryptocurrency instruments.
Google's new marketing rules allow ads touting "cryptocurrency coin trusts" to appear alongside search results for queries such as "bitcoin ETF". They took effect on January 29, weeks after 10 asset managers launched bitcoin ETFs on January 11.
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| | | | | | Exchanges | | | Cboe Global Markets Reports Results for Fourth Quarter 2023 and Full Year
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the fourth quarter of 2023 and full year.
"I am pleased to report that Cboe generated another year of strong revenue growth and financial results in 2023," said Fredric Tomczyk, Cboe Global Markets Chief Executive Officer. "Our Derivatives and Data and Access Solutions categories helped drive the 10% net revenue growth and 13% adjusted diluted EPS growth for the year as both strong secular and cyclical trends helped boost these business lines. In addition, we made meaningful progress on our strategic initiatives as a company and are well-positioned for 2024. This year we plan to unlock additional value from our global derivatives and securities network by leveraging our core strengths - our global footprint, superior technology and product innovation - to help drive continued strong revenue growth and financial results."
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Eurex launches Mid-Curve Options on EURO STOXX 50 Index Dividend Futures
Eurex
Eurex is expanding its dividend derivatives offering with the introduction of Mid-Curve Options on EURO STOXX 50 Index Dividend Futures as of 5 February 2024. Mid-Curve Options on index dividend futures, currently only available as an OTC product, can now be traded at Eurex. Mid-Curve Options (Eurex), or Swaptions (OTC terminology), are listed options that expire on an underlying future with a longer expiry date than the next settling future. These options focus on the next five years of dividends, allowing participants to fine-tune risk management or anticipate changes in dividend expectations.
/jlne.ws/42q3EYU
Cboe Carrying Out Strategic Review
Shanny Basar - MarketsMedia
Fredric Tomczyk, chief executive of Cboe Global Markets, said the group is carrying out a strategic review as it reported record revenue in 2023 and record trading volumes for options. Tomczyk said on the results call on 2 February that Cboe's outstanding results were driven by record derivatives trading volumes, growth of the data and access solutions business and disciplined expense management.
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Intercontinental Exchange Reports January 2024 Statistics; Record ADV across commodities, energy and total options
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today reported January 2024 trading volume and related revenue statistics, which can be viewed on the company's investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/jlne.ws/4bniHqh
January 2024 figures at Eurex
Eurex
Total Eurex volume up 6 percent in January year-on-year; Eurex Repo grows by 57 percent in GC Pooling; Notional outstanding in OTC Clearing up 8 percent year-on-year in January. Eurex, Europe's leading derivatives exchange, reports a 6 percent increase in traded contracts for January compared to the previous year, rising from 144.6 million to 152.7 million contracts. Robust growth of 34 percent was observed in interest rate derivatives, with the number of contracts traded in January climbing from 54.7 million to 73.6 million. Conversely, equity derivatives experienced a 17 percent decrease, dropping from 20.9 million contracts in January of the previous year to 17.4 million contracts. Index derivatives turnover also saw an 11 percent year-on-year decline in January, decreasing from 68.7 million to 61.4 million traded contracts.
/jlne.ws/3SLp2V6
The number of private investors on the Moscow Exchange exceeded 30 million
MOEX
The number of individuals with brokerage accounts on the Moscow Exchange (MOEX) reached 30.2 million at the end of January 2024, and they opened 53.3 million accounts. Transactions on the Moscow Exchange were concluded by 3.7 million private investors in January. The share of individuals in the volume of trading in shares was 76%, in the volume of trading in bonds - 32%, in the spot currency market - 13%, in the derivatives market - 67%.
/jlne.ws/3wbLspD
| | | | | | Regulation & Enforcement | | | Online Crypto Course Founder Scammed Students With Fake Hedge Fund, SEC Alleges
Allyson Versprille - Bloomberg
The founder of an online crypto trading course called the American Bitcoin Academy scammed students out of more than $1 million by persuading them to invest in a fake hedge fund, the Securities and Exchange Commission claimed Friday. From December 2017 through April 2018, Brian Sewell allegedly solicited investments for the Rockwell Fund, which would invest in digital assets using unique strategies and tools such as artificial intelligence.
/jlne.ws/3OsRQPV
| | | | | | Strategy | | | Implied Volatility IV Index and IVR
Tastylive (Video)
In this video, Nick and Mikey discuss various trading strategies and market updates. They talk about implied volatility (IV) and its significance in options trading. IV represents uncertainty and is derived from option prices. They explain that high IV means option prices are high and there is greater speculation and hedging in the underlying asset. They also discuss IV index, which is a VIX-style IV calculation for a specific underlying, and IV rank, which quantifies whether current IV is high or low in that underlying. They provide examples and explanations of how to use these metrics in trading decisions. They also answer questions from viewers about specific trades and analyze the potential outcomes. Overall, the video provides insights into the importance of understanding and analyzing implied volatility in options trading.
/jlne.ws/3OzgWwu
185 Strike Calls
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop gives us updates on Friday's trading action (#options trading volume was ~24% above recent average levels), economic data to be on the lookout for this week and more.
/jlne.ws/49mtFL0
| | | | | | Education | | | Cboe LiveVol Tutorials
Cboe
Cboe LiveVol is the standard in options analytics. The Cboe LiveVol platform helps you quickly analyze trading activity and identify opportunities so you can stay at the leading edge of the options market.
View our explainer videos for quick looks into unique features of the Cboe LiveVol platform.
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| | | | | | Miscellaneous | | | Aderonke Adedokun Helps Kids Embrace STEM
Cboe
Aderonke Adedokun, Senior Human Resources Manager, began her journey with SparkShop six years ago as a volunteer and founding associate board member after being drawn to SparkShop's mission of leveling the playfield and creating more equity in STEM professions.
SparkShop is a unique nonprofit organization that inspires the next generation of engineers, innovators, entrepreneurs and manufacturing geniuses by developing and delivering STEM (science, technology, engineering and math) education to elementary school students in Chicago. The organization has partnered with 32 schools and served more than 1,600 students, 84% from low-income backgrounds and 75% who have never participated in STEM education before.
/jlne.ws/3UpDXWr
Ken Griffin and Ja Rule Converge in Miami as Power Meets Glamour; Annual hedge fund week showcases Miami's money and influence; Florida single largest source of cash to GOP presidential runs
Michael Smith and Anna J Kaiser - Bloomberg
No one in New York or LA orders a Carlyle Fresco. But that's what they were mixing the other night by the pool at the famed Fontainebleau Miami Beach - a sure sign the hedge fund set was back in town. The tequila and grapefruit spritz was named in honor of the Carlyle Group Inc., which was one of the sponsors of a conference in the hotel.
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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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