| October 07, 2016 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Frankfurt and Stockholm MarketsWiki Education Events Postponed
By JLN Staff
We are delaying the Frankfurt and Stockholm events of our MarketsWiki Education World of Opportunity series due to logistics complications in Stockholm. We are seeking a new venue there after the one we thought we had secured became unavailable due to unforeseen circumstances.
We had originally scheduled the October 27 event in Frankfurt at the Alte Boerse. We hope to make new arrangements in Stockholm and a new date for Frankfurt.
Meanwhile, our London event is open for registration. Please sign up your interns, students and newer employees for our series featuring a list of terrific industry leaders and professionals.
| | | | | | Lead Stories | | | Pound-Dollar Parity Is Now a Possibility for Options Traders
Anooja Debnath - Bloomberg
What was close to unthinkable for the pound before the Brexit vote is now firmly on some traders' minds. They're betting sterling will tumble to parity with the dollar, a level unseen in the U.K. currency's history. In recent days, a number of wagers were put on for a one-for-one exchange rate, according to Depository Trust & Clearing Corp. data.
jlne.ws/2dSpnV8
****SD: Also see Pound Crash May Be Just The Beginning As Markets Brace For Renewed Declines from TheStreet.
The Pound Crash Is a Big Wake-Up Call to U.S. Traders Ahead of the Election
Julie Verhage and Sid Verma - Bloomberg
The shocking overnight plunge in the pound  one of the world's most-traded currencies  draws attention to how outsized volatility can take the markets by storm.
jlne.ws/2dSx2CV
****SD: Check out this story from Barron's  Has the Market Bet Too Heavily on Hillary Clinton?
Why The VIX Isn't Really The Fear Index
Ivan Illan - Equities.com
When most business media folks talk about risk, they're specifically referring to volatility. But true risk, as professional investors accept it, is defined as the probability of permanent capital loss. Volatility, however, is the variability of future expected prices. If we expect prices to charge upward or fall precipitously in the next month or two, then we're expecting lots of volatility, but not necessarily increased risk (as defined by the probability of permanent capital loss). Most individual investors would be very glad to reflect on the difference between these two terms, and brand the difference in their minds.
jlne.ws/2dSwyfS
Two-Minute Mystery Pound Rout Puts Spotlight on Robot Trades
Netty Idayu Ismail and Lilian Karunungan - Bloomberg
Making sense of the foreign-exchange market is Derek Mumford's bread and butter, but he couldn't explain this. In the span of just two minutes in early Asia trading on Friday, the British pound had plunged more than 6 percent, sending the fourth most-traded currency on the planet to the lowest level in 31 years. Mumford, who advises companies on foreign-exchange and interest-rate risks, scrambled to find out why.
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****SD: This from Finance Magnates  Exclusive Insight: Sterling Quotes Differ 1000 Pips across Different Brokers
How a Saudi Royal Sparked an OPEC Deal and Sent Oil Prices Past $50
Summer Said - WSJ
Saudi Arabia's deputy crown prince sent his energy minister to an OPEC meeting last month with a difficult mission: Make a deal with rival Iran but don't compromise the kingdom's ability to fight for oil-market share, people familiar with the matter said.
jlne.ws/2dSrFnk
Jobs report doesn't shift timing for Fed rate-hike expectations
Greg Robb - MarketWatch
The September jobs report was not strong enough to push the Federal Reserve to hike interest rates sooner than at their December meeting or weak enough to delay it until 2017, economists said. "For the Fed, what it suggests is they continue to see overall improvement in the job market at an adequate pace and keeps them in the mode to raise rates in December," said Michael Gregory, senior economist at BMO in Toronto.
jlne.ws/2dScIkU
Trump Scare Sends Mexican Peso Volatility to 5-Year High: Chart
Srinivasan Sivabalan - Bloomberg
With just about a month to go before U.S. presidential elections, currency traders are seeking protection against a Donald Trump victory.
jlne.ws/2dSo74c
| | | | | | Exchanges | | | War Communism Meets Central Clearing
Streetwise Professor
I believe that I am on firm ground saying that I was one of the first to warn of the systemic risks created by the mandating of central clearing on a vast scale, and that CCPs could become the next Too Big to Fail entities. At ISDA events in 2011, moreover, I stated publicly that it was disturbing that the move to mandates was occurring before plans to recover or resolve insolvent clearinghouses were in place. At one of these events, in London, then-CEO of LCH Michael Davie said that it was important to ensure to have plans in place to deal with CCPs in wartime (meaning during crises) as well as in peace.
jlne.ws/2dPXqNE
London's Euro Clearing May Not Be Up for Grabs, Hammond Says
John Detrixhe and John Micklethwait - Bloomberg
Clearing has become a pawn in the post-Brexit battle for London's financial services industry, but U.K. Chancellor of the Exchequer Philip Hammond says it may not necessarily be up for grabs after all.
jlne.ws/2dSwlJN
Taiwan Futures Exchange Monthly Newsletter
TAIFEX
This is a link to the full PDF.
/goo.gl/Vp1Ydh
| | | | | | Regulation & Enforcement | | | US derivatives regulator strengthens cybersecurity testing obligations: key takeaways
DLA Piper - JDSupra
Amid growing concern regarding cybersecurity preparedness, the US derivatives regulator recently issued regulations aimed at strengthening cybersecurity obligations for certain financial services entities. On September 8, 2016, the Commodity Futures Trading Commission (CFTC) adopted amendments to its system safeguard rules for designated contract markets (DCMs), swap execution facilities (SEFs), and swap data repositories (SDRs) (collectively, Exchanges), as well as for derivatives clearing organizations (Clearinghouses).
jlne.ws/2dSxsJf
Buyside dealers ready their post-trade report cards
Financial News
That will soon be how European buyside firms trading certain securities over the counter will have to do business, whether they like it or not. And getting ready for the change won't be simple, or cheap.
jlne.ws/2dSuYKX
****SD: From TABB Â How the Buy Side Could Influence 'SI Determination'
| | | | | | Strategy | | | Here's a Simple Way to Bet on Volatility Around the U.S. Election
Julie Verhage and Joanna Ossinger - Bloomberg
Here's your trump card for playing the presidential election. Right now markets aren't pricing in much volatility around the November 8 vote. The options-implied market move for the election week is just 1.6 percent, a team at BNP Paribas SA led by Edmund Shing writes in a new note, "which might seem humble" when compared to the jolts registered over other recent political events. For reference, the S&P 500 fell 2.5 percent on September 9, amid concerns that the Federal Reserve might surprise investors and raise interest rates later that month, and even notched a 4 percent drop after the United Kingdom voted to leave the European Union in June.
jlne.ws/2dSocVN
Thinking Outside the Stock: Trading Index and ETF Options
Celeste Taylor - Schaeffer's Research
Typically, investors interested in options tend to focus on buying or selling calls and puts on particular stocks. However, options aren't just limited to equities. Index and exchange-traded fund (ETF) options allow traders to speculate on -- or hedge against -- the broader market or an entire sector.
jlne.ws/2dSrRTg
| | | | | | Miscellaneous | | | CFTC Financial Data For Futures Commission Merchants Update
Press Release
Futures commission merchants (FCMs) and retail foreign exchange dealers (RFEDs) must file monthly financial reports with the CFTC's Division of Swap Dealer and Intermediary Oversight (DSIO) within 17 business days after the end of the month. Selected financial information from these reports is published below. The most recent month-end information generally is added within 12 business days after FCMs and RFEDs file their reports, but occasionally may be added later. For example: The 17th business day filing "due date" for February 28, 2015 financial reports was March 25, 2015. The 12 business day target for posting these data was April 10, 2015.
jlne.ws/2dPV3uk
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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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