| July 06, 2021 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
The Spread - July 2, 2021
JohnLothianNews.com
Finra socks Robinhood with its biggest-ever fine; Cboe acquires Chi-X Asia Pacific; OCC reports another volume gain; NIO takes its cue from options; John Lothian weighs in with his take; Looking for volatility; and Jermal Chandler explains hedging in the options "Term of the Week."
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| | | | | | Lead Stories | | | Retail Investors Power the Trading Wave With Record Cash Inflows; Individual investors plowed a record net $27.9 billion into the U.S. stock market in June, lured by continued volatility beneath the market's surface
Caitlin McCabe - WSJ
Retail investors keep pouring money into markets, even as many of their favorite meme stocks and cryptocurrencies have languished. In June, so-called retail investors bought nearly $28 billion of stocks and exchange-traded funds on a net basis, according to data from Vanda Research's VandaTrack, the highest monthly amount deployed since at least 2014. That even trumped the amount retail traders spent in January during the first meme-stock frenzy.
/jlne.ws/3wiRkbi
Stocks Were Unusually Quiet in June. Traders Think That Is About to Change.
Akane Otani - WSJ
Traders are gearing up for a pickup in volatility following an unusually sleepy stretch for the stock market.
The gap between the S&P 500's daily peak and trough narrowed to 0.62 percentage point in June. That was down from 0.98 percentage point in May, marking the lowest level of intraday volatility within a month since December 2019, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
/jlne.ws/3hgq3Sp
Oil Futures Fall With a Stronger Dollar Cooling the Rally
Jill R Shah - Bloomberg
Oil's rally fizzled with a surging dollar pressuring commodities lower and uncertainty over which direction OPEC and its allies would pursue as talks ended with a stalemate.
West Texas Intermediate futures for August fell as much as 2.6% in New York. The Bloomberg Dollar Spot Index rose, making commodities priced in the dollar less attractive to investors. Oil prices earlier surged to a six-year high after a bitter fight between Saudi Arabia and the United Arab Emirates plunged OPEC+ into crisis and blocked a supply increase.
/jlne.ws/3jNtZf7
A Gamble Inside a Gamble: Robinhood's Wild Memestock IPO; Robinhood will offer IPO shares to its own users, highlighting the company's dependence on complex, high-risk bets.
David Z. Morris - Coindesk
Yo, Dawg, I heard you liked gambling, so we put some gambling inside your gambling so you can gamble while you gamble. I'm a very old man, so when I heard that Robinhood would offer a portion of its just-announced initial public offering (IPO) to users through its app, of course I thought of Xzibit, rapper and host of the weird 2000s-era relic "Pimp My Ride." Xzibit used to do fun and crazy stuff like putting a fish tank into an Escalade, and Robinhood is clearly taking inspiration when it puts risk inside of its customers' risk.
/jlne.ws/3hD63Za
| | | | | | Exchanges | | | HKEX Enhances Product Offering with XPeng Debut
HKEX
XPeng Futures and Options to be introduced on 7 July; XPeng shares to be included in Designated Securities Eligible for Short Selling on 7 July;
Issuers can list derivative warrants on XPeng shares on 7 July
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Monday) that it will offer investors more options on XPeng, Inc. (XPeng, stock code: 9868) shares after its debut.
/jlne.ws/36l7WEs
| | | | | | Regulation & Enforcement | | | Flaws Emerge in Justice Department Strategy for Prosecuting Wall Street
Aruna Viswanatha and Dave Michaels - The Wall Street Journal
Early one July morning in 2016, Robert Bogucki, a senior executive at Barclays BCS -1.60% PLC, walked into what he expected to be a short meeting with the British bank's lawyers to go over a five-year-old transaction before he joined his family on vacation.
Instead, he emerged after 11 hours of questions that 18 months later led to his criminal indictmentâand ultimately to a trial that would expose some flaws in a broad Justice Department push to police Wall Street that continues to this day.
Mr. Bogucki oversaw over-the-counter foreign exchange trading, including options, a private corner of financial markets used by companies, banks, hedge funds and other sophisticated investors with no regulatory oversight at the time.
/on.wsj.com/3dObt2B
BARCLAYS SUSPENDS UK CARD PAYMENTS TO BINANCE AS CRACKDOWN CONTINUES
KARTHIK SUBRAMANIAN - Finance Feeds
Barclays has suspended all card payments from the UK, both debit and debit card payments, to the major crypto exchange Binance as it cites the announcement made by the Financial Conduct Authority regarding Binance operations in the UK.
We had earlier reported that Binance was not allowed to operate in the UK, as the FCA said that neither Binance nor any of its associated entities hold any sort of license to carry out crypto operations in the UK. The UK had also banned crypto derivatives products and a large part of Binance's business revolves around futures and options trading in crypto.
/bit.ly/3dNgPuX
| | | | | | Education | | | An Intern's Guide to Trading
Phil Mackintosh, Chief Economist, Nasdaq - Traders Magazine
As we promised in our recent Updated Intern's Guide to the Market Structure Galaxy, today we follow up with an Intern's Guide to Trading.
Where do stocks trade?
In our guide to market structure, we talked about all the different "trading centers" in the market - from exchanges to broker dark pools to brokers filling orders directly - and how the total trading in the market is allocated between those venues.
But to understand how trading works, we need to look at how customer orders (retail and mutual funds) make their way to market.
All customer orders need to be handled by brokers.
/bit.ly/3jP18au
| | | | | | Miscellaneous | | | The Next Big Divide in Finance Takes Shape in Your Office
Marion Dakers and Marion Halftermeyer - Bloomberg
Banks are divided over whether to embrace flexible working; Goldman, JPMorgan among advocates for return to office
A new divide is emerging in finance as bankers around the world return to their desks after months of lockdowns during the pandemic. In one corner, firms like JPMorgan Chase & Co. and Goldman Sachs Group Inc. are making clear their determination for staff to return to the office. Other banks, including Nomura Holdings Inc., Citigroup Inc. and a variety of European lenders, have sketched out more flexible policies. This chart shows how firms are dividing.
/jlne.ws/3hCpl0J
Interactive Brokers (IBKR) June DARTs Up on Volatile Markets
Zacks Equity Research
Interactive Brokers Group, Inc. IBKR has released the Electronic Brokerage segment's performance metrics for June 2021. The segment, which deals with the clearance and settlement of trades for individual and institutional clients globally, reported a surge in client Daily Average Revenue Trades (DARTs). This was mainly driven by volatile markets.
Total client DARTs were 2,471,000, jumping 33% from June 2020 and 10% from May 2021. On an annualized basis, the company recorded Cleared Average DARTs per customer accounts of 401. This reflects fall of 18% year over year but a rise of 8% sequentially.
/bit.ly/3qNR6HQ
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