| | | | | | | March 11, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
March is tracking towards a new Henry Hub Natural Gas futures and options trading record, with average daily volume (ADV) over 1.2M contracts. Natural Gas options ADV is nearly 400K contracts, with more than half the volume originating on-screen. Check in on the options market with CME Globex Trade Browser, showing electronic options strategies, quantity and price.
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Cboe, which has benefited from Robinhood's access to its markets for index options - S&P 500 Index, Cboe Volatility Index, Russell 2000 Index, and Mini S&P 500 Index options - saw its shares rise 2.83% yesterday or $6.02 to $219.02. This came before Cboe held a press reception at the Boca Resort where CEO Fredric Tomczyk said Robinhood was connected to Cboe faster than he expected and did more trading than expected. In fact, he compared Robinhood to his former firm TD Ameritrade, which prompted me to say that maybe they should have kept JB Mackenzie around, who it should be noted is now running Robinhood's futures.
During the Cboe reception when Cboe Global president David Howson was giving a presentation about Cboe's new technology, which it branded Titanium, I remarked that I appreciated it branding the tech after my knees, which, after my post-Boca knee replacement surgery in 2013, are made of titanium. My streak of getting a laugh during Cboe press events continues.
When the issue of competition from the Texas Stock Exchange came up after a discussion of listings, and it was noted that the former Chicago Stock Exchange, now NYSE Chicago, was being moved to Texas, I suggested the Cboe might consider moving their EDGX stock market to Texas, specifically San Antonio, and rename it BorderX.
I asked if there was an update about single name 0DTE options since last year's OIC conference and was told there have been discussions, but there are still problems to be solved. One of the biggest problems is how to deal with early exercise, or exercise at all. One suggestion was to offer cash settled 0TDE single names, but the brokerage firms have said it would confuse customers to have two choices. My suggestion is to make the strike prices for the cash settled version every five dollars and the physical settled on the $10.00.
âEURâ¹In February 2025, Miami International Holdings, Inc. (MIH) reported a total multi-listed options volume of 163.9 million contracts across its MIAX Exchange Group, marking a 12.8% year-over-year increase. MIAX Sapphire achieved a record monthly volume of 21.8 million contracts, with a market share of 2.1%, and set a daily volume record of 1.6 million contracts on February 21. MIAX Options also saw significant growth, reaching 69.2 million contracts-a rise of 18.6% compared to the previous year-and a market share of 6.7%. âEURâ¹Conversely, MIAX Pearl Options experienced a decline, with a 42.8% decrease year-over-year, totaling 30.5 million contracts and a market share of 2.9%. In contrast, MIAX Emerald reported a 25.9% increase, reaching 42.3 million contracts and a market share of 4.1%. âEURâ¹In the equities sector, MIAX Pearl Equities handled 3.2 billion shares, a 20.4% decrease from the previous year, resulting in a 1.1% market share. MIAX Futures, however, saw a substantial 40.0% increase in trading volume, reaching 461,996 contracts, with an average daily volume of 24,316 contracts-a record high. ~JJL
| | | | | | Lead Stories | | | S&P 500's Slide Brings Huge Options Position Into Rare Focus
Jess Menton - Bloomberg
A huge options position expiring at the end of the month is giving some on Wall Street a new level to fuss over.
The JPMorgan Hedged Equity Fund's (JHEQX) - which uses put options to shield against drops in the index - holds a long position in S&P 500 put options at 5,565 as part of a collar position that is rolled at the end of each quarter. The current collar - which also includes short positions in 4,700 puts and 6,165 calls - potentially adds to volatility, according to derivatives strategists, though is expected to prevent a deeper selloff. That was the case on Monday and Tuesday, when the S&P 500 briefly dipped below that level before bouncing back.
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Volatility Curve's Inversion Suggests Short-Term Stock Pain
Jan-Patrick Barnert - Bloomberg
The rise in volatility has been very gradual amid a market slump that had one-day price action like there is no tomorrow. Meanwhile the VIX Index's future curve isn't suggesting lasting stress yet.
While the Cboe Volatility Index itself is about 10 points higher then it used to be about a month ago, the price difference in futures contracts that cover most of 2025 show a much less pronounced change in reading. That has caused the curve to go inverted, at backdrop that isn't unusual in times of short-term market unrest.
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Macro Funds' Options Trades Are Increasingly Ditching the Dollar
David Finnerty - Bloomberg
Macro hedge funds are increasingly seeking currency option trades that exclude the dollar as they navigate the market turbulence stemming from worries about the US economy.
Trades involving the euro and haven yen were in demand Monday. The two currencies were easily the most traded on The Depository and Trust Clearing Corp., involved in over half of all trades, as US tech stocks tumbled by the most since 2022.
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VIX Nears 30 First Time Since August Shock on Tariff Anxiety
David Marino and Jess Menton - Bloomberg
A slump in the S&P 500 Index on Monday sent the Cboe Volatility Index a hair away from 30, the level it last reached during the volatility shock in August. The VIX reached 29.56 shortly after 3 p.m. in New York before paring the advance as the S&P 500 plunged as much as 3.6%, with the VVIX, which measures volatility of VIX options, also spiking. The index of expected S&P 500 swings in the next month hasn't spent much time above the 30 level since 2022, when stocks lost 19%. During the grind higher in equities over the past year and a half, the VIX just occasionally made it past 20.
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Wall Street loses hope in a 'Trump put' for markets; US president's tolerance for tariff-induced stock falls may be higher than anticipated, say investors
Joshua Franklin and George Steer, James Politi and Ian Smith - Financial Times
Investors fear that Donald Trump's tolerance for a steep stock sell-off is far higher than it was in his first term as they lose faith that financial markets will restrain the US president's tariffs and spending cuts. US stocks have slumped in recent days, with the S&P 500 sinking more than 8 per cent from a record high hit less than three weeks ago, as Trump's tariffs have triggered concerns over the trajectory of the world's largest economy.
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Fears of U.S. contagion spur traders to find hedges across world
Ruth Carson, John Cheng and Bloomberg via Fortune
From ditching US stocks for Chinese peers to buying the yen and the euro, traders are running for cover as they ponder how a US markets meltdown may unfold. Steady selling in US stocks turned into a stampede on Monday as recession jitters spread across Wall Street. Risk aversion spilled into Asia, and growing conviction that US exceptionalism is over spurred a rush into the relative safety of the yen, Australian government bonds and the offshore yuan.
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March is off to a painful start for big-name hedge funds
Bradley Saacks - Business Insider
Last month was one of the worst in a long time for big-name hedge funds such as Izzy Englander's Millennium and Steve Cohen's Point72. March could be even worse.
Early monthly returns for large multistrategy firms show industry-wide pain thanks to the market volatility brought on by President Donald Trump and his administration's policies toward trade. These managers have amassed never-before-seen scale and headcounts over recent years because of their ability to make money no matter the market conditions.
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Cboe Files Several Amended Documents to Allow Ether Staking in ETFs; The exchange filed amended 19b-4 documents with the Securities and Exchange Commission asking to allow staking of the ETFs.
Helene Braun - Coindesk
National securities exchange Cboe is asking the U.S. Securities and Exchange Commission (SEC) to allow staking in several spot ether (ETH) exchange-traded funds (ETFs), sending the price of token 2% higher over the past 24 hours.
Before the funds launched in July, several issuers included staking in their applications. However, the SEC later required them to remove the feature, as the Commission was not allowing it at the time.
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| | | | | | Exchanges | | | Eurex introduces new liquidity framework to enhance market quality in EURO STOXX 50 Index Options
Eurex
In a bid to further improve liquidity and efficiency in its flagship EURO STOXX 50 Index Options (OESX or SX5E Options), Eurex launches a first-of-its-kind liquidity provider (LP) program in July, built on the principle that 'a good quote is a traded quote'. The scheme has received widespread support from the market-making community.
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Coinbase and Robinhood Didn't Make the S&P 500. They May Be Too Volatile
Mackenzie Tatananni - Barron's
Coinbase Global and Robinhood Markets were thought to be contenders for inclusion in the S&P 500 SPX last week, but failed to make the cut. Volatility could be to blame Volatility could be to blame. On Friday, S&P Dow Jones Indices revealed its quarterly changes to the index, which tracks the 500 largest publicly listed companies by market capitalization. The additions and deletions will go into effect March 24. Ahead of the announcement, Barclays analysts held out seven stocks in their coverage as potential contenders, including crypto exchange Coinbase and trading platform Robinhood. Investors also had their eyes on AppLovin. With a market cap of $88.3 billion, the mobile technology company was the largest of all the possible candidates.
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CME Group to Launch Bloomberg Commodity (BCOM) Subindex Futures on March 31
CME Group
CME Group, the world's leading derivatives marketplace, today announced plans to launch Bloomberg Commodity (BCOM) Subindex futures on March 31, pending regulatory review.
BCOM Subindex futures will be available across seven leading commodity index sectors, providing investors with the ability to express their views around sector-specific asset volatility on their portfolios
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Intraday Cycle Performance Bond Calculation for Quarterly Equity Futures and Options on Final Settlement Date - Effective March 10, 2025
CME Group
As background, certain equity futures and options which expire on a quarterly basis have a final settlement price determined before CME Clearing runs the intraday ("ITD") clearing cycle. For example, E-mini S&P futures have a final settlement price based on the special opening quotation ("SOQ") of the contract's underlying reference index on the final settlement date, which generally occurs at approximately 8:30am CST.
Historically, during the ITD clearing cycle, to calculate the performance bond requirement(s) on this final settlement date, CME Clearing simulated potential future gains or losses on these equity futures and options positions when using the SPAN methodology, which were reflected in the performance bond requirements at the ITD cycle.
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| | | | | | Technology | | | FIA Tech Expands Brokerage Settlement Platform to Block Trading; First eight market participants now live with blocks on Atlantis
FIA Tech via Finextra
FIA Tech, a leading futures industry technology provider, today announced that it has added support for block traded futures and options to its settlement platform Atlantis, and is live with buyside, brokers and clearing firms on the expanded service. With this addition, Atlantis is now facilitating the invoicing and collection of around $1bn of revenue annually in exchange traded derivatives (ETD) and US Listed Options brokerage across 53 executing brokers, 33 clearing firms and buyside clients. Adding support for block trades delivers much needed automation to a large and fragmented segment of futures and options trading. Due to the bespoke nature of block trading, the size, complexity and value of the trades is often much higher, making existing invoicing and collection processes highly manual and fraught with delays. Concurrent with the rollout of the platform, FIA Tech has worked with the industry on a common invoice format and process to create operational synergies for clearing firms and their clients.
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Deutsche Borse Group provides institutional clients access to crypto assets via Clearstream; Clearstream and Crypto Finance, both members of Deutsche Borse Group, facilitate digital asset access with new crypto custody offering for institutional investors via Clearstream.
Deutsche Borse Group
Clearstream, Deutsche Borse Group's post-trade business, enhances its custody service portfolio to crypto assets. By using Deutsche Borse Group company Crypto Finance as sub-custodian, Clearstream can rely on market-leading expertise to offer settlement and custody services in crypto assets to institutional investors. The offering is expected to be launched in April this year. In January, Crypto Finance laid the groundwork by obtaining the MiCAR license, enabling the company to serve clients across Europe while solidifying its regulatory compliance and leadership in the industry.
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| | | | | | Moves | | | Citadel Securities Taps Goldman's Rubner to Cater to Big Traders
Natalia Kniazhevich and Katherine Doherty - Bloomberg
Citadel Securities hired Goldman Sachs Group Inc.'s Scott Rubner, who has turned heads on Wall Street with prescient calls on equities markets, to help go toe-to-toe with banks in catering to hedge funds and other big traders. Rubner is joining the market-maker's institutional derivatives business, where he will draw on its data to offer insights and commentary to clients, according to Dave Silber, head of institutional options. Rubner spent almost a decade at Goldman, according to his LinkedIn profile, most recently as a managing director for global markets and tactical specialist.
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| | | | | | Strategy | | | The VIX Is Spiking. Don't Be Tempted Into Buying Stocks Just Yet.
Ian Salisbury - Barron's
Market volatility is back with a vengeance, but don't let a big spike in the VIX tempt you into buying stocks just yet.
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Where Wall Street says to hide out as recession fears rock stocks
William Edwards - Business Insider
Stocks continue to fall amid tariff policy and economic slowdown concerns.
Wall Street advises shifting to quality stocks with strong earnings and low debt.
Quality-factor ETFs like Vanguard US Quality Factor ETF may outperform in market stress
Stocks continue to endure a rough patch, with the S&P 500 falling another 2.7% on Monday. Investors have been digesting volatile tariff policies, the prospect of a slowing economy, and a reset of expectations for US artificial intelligence companies.
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Spiking 'VIX' can signal it's time to buy stocks
Jamie Chisholm - MarketWatch
The Cboe Volatility Index, the options-derived measure of expected S&P 500 volatility that's come to be known as Wall Street's fear gauge, has eased back slightly from the highs seen during the latest market selloff.
However, at more than 27 - compared with a long-range average of 19.5 - the "VIX" remains elevated.
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Stocks in the 'danger zone'? Here's what breaking a moving average really means.; A moving average is not the bearish omen it used to be
Mark Hulbert - MarketWatch
The S&P 500 slid below its 200-day moving average on Monday into what many stock-market technicians see as a "danger zone." But in truth, breaking below a moving average is not the bearish omen it used to be.
That's a huge relief, since the S&P 500 has broken below many widely followed moving averages over the past two weeks. It broke below its 50-day moving average on Feb. 24 and fell through its 100-day moving average on Feb 27.
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| | | | | | Miscellaneous | | | Wall Street Fears Trump Will Wreck the Soft Landing; The economy's pilot has a new message: Fasten your seat belts
Nick Timiraos - The Wall Street Journal
For the past year, U.S. economic policymakers have been singularly focused on achieving a so-called soft landing that brings inflation down without a recession. Now, a new team of pilots are considering a course correction that, by their own acknowledgment, might tip the economy toward a hard landing. President Trump and his senior advisers in recent days have signaled indifference to rising risks that trade uncertainty chills private-sector investment. They have argued a "detox" might be needed in spending and hiring, that falling stock values aren't a big worry, and that inflation could rise in the short run. In an interview that aired Sunday on Fox News, Trump sidestepped a question about whether a recession could lie ahead. "There is a period of transition because what we're doing is very big," he said. "What I have to do is build a strong country. You can't really watch the stock market."
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Crypto Day-Trader Faithful Find Life Under Trump Is No Paradise
Vildana Hajric - Bloomberg
For months, crypto-loving investors sank billions into leveraged strategies with the hope that Donald Trump would eliminate regulations on their upstart industry and usher in a new world of digital prosperity. Now, day traders who bet on cryptocurrencies are bearing the the brunt of a sweeping Wall Street selloff - one driven by fears about Trump's volatility-inducing policy agenda. Digital assets have been faring particularly poorly, in part due to disappointment that Trump's industry policies are not living up to expectations.
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