| March 13, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Structured products and the 'broken Vix' discourse; Whodunnit?
Robin Wigglesworth - Financial Times
Last week we wrote about how the BIS thinks the explosion of structured products like ETFs built for derivatives-derived income could be the real cause for the decline in the Vix. The volatility index's parent now begs to differ. The Cboe - formerly known as the Chicago Board Options Exchange - has put out a report examining the decline in the volatility measured by its flagship Vix index, which it admits "has not only been historic, but also surprising".
/jlne.ws/3VlVkbf
****** Who is going to FIX the VIX?~JJL
Broadridge Launches Global Futures and Options Fully Hosted Trading Platform
Editorial Staff - The Trade
Broadridge Financial Solutions has annouced the launch of its global Futures and Options Software-as-a-Service (SaaS) platform, expanding its existing derivatives trading capabilities.
A top 3 FCM has signed as an anchor client.
/jlne.ws/43f5hck
Risk Appetite in Bitcoin Spurs 'Enormous' Leveraged ETF Flows
David Pan - Bloomberg
Demand for the investment vehicles that offer leveraged exposure to Bitcoin is soaring as the digital asset hits record highs. Leveraged futures-based exchange-traded funds such as VolatilityShares' 2x Bitcoin Strategy ETF (BITX) are seeing flows rivaling spot Bitcoin ETFs. The fund raked in $630 million in net monthly inflows, beaten only by BlackRock and Fidelity, according to data compiled by K33 Research.
/jlne.ws/43bQjnv
What Will the BOJ Do With Its $475 Billion ETF Hoard?; The BOJ holds the equivalent of about 7% of the Japanese stock market via ETFs, according to data compiled by Bloomberg.
Aya Wagatsuma - Bloomberg
The Bank of Japan owns around ¥70 trillion ($475 billion) of the country's exchange-traded funds, a legacy of its decades-long campaign to help defeat deflation by pouring money into the equity market. With the BOJ set to raise interest rates as higher prices ripple through the economy, a key question for stock investors is what policymakers plan to do with this enormous pile of funds, and when. Reducing it would help the central bank normalize one of the most unorthodox parts of its policy regime. Yet this would risk undermining confidence in a stock market that only just clawed itself back to levels last reached in 1989.
/jlne.ws/3Tzjo8Y
Grayscale files plans for 'mini' bitcoin fund, two months after GBTC's conversion to ETF; Grayscale Bitcoin Trust is the largest spot bitcoin ETF, but it's been losing assets amid competition from cheaper rival funds
Christine Idzelis - MarketWatch
Grayscale Investments is planning a second exchange-traded fund tracking spot bitcoin prices, just two months after the firm's flagship Grayscale Bitcoin Trust converted to an ETF, according to a regulatory filing.
/jlne.ws/3wRcmUr
| | | | | | Regulation & Enforcement | | | SEC Orders First Trust-SkyBridge to Declare Its Bitcoin ETF Application Abandoned
Sam Reynolds - CoinDesk
First Trust Advisors and SkyBridge Capital, the hedge fund run by Trump-era White House Communications Director and digital assets investor Anthony Scaramucci, have been ordered by the Securities and Exchange Commission (SEC) to mark their bitcoin {{BTC}} ETF application as abandoned. In a notice published on Wednesday, the SEC said that the registration statement must be declared abandoned because the First Trust SkyBridge Bitcoin ETF failed to respond to prior communications from the Commission.
/jlne.ws/4crHlXx
| | | | | | Moves | | | Kane to leave Citadel Securities for senior Miax role; Options exchange has been on a four-year acquisition spree
Bernard Goyder - Risk.net
Troy Kane, a director at Citadel Securities, is leaving his role for a position at exchange operator Miami International Holdings (Miax), according to sources familiar with the matter.
/jlne.ws/4cg3DLG
| | | | | | Strategy | | | When Cash Isn't King: Pursuing Equity Exposure and Tax Alpha with Defined Protection ETFs
Cboe
Amid record stock market highs but persistent volatility, many investors want equity exposure - just not if it means taking any risk. This is evidenced by the massive amount of cash on the sidelines, with the asset class now making up almost 35% of affluent investors' portfolios per the Capgemini Top Trends 2024 report. Recent estimates from the Investment Company Institute (ICI) suggest there is more than $6 trillion sitting in money market funds alone.
With high yield savings accounts and money market funds paying 4-5% interest, the fear of loss combined with easy access to a safe option offering a decent rate of return can make cash a compelling proposition. However, the vast majority of money in savings accounts isn't even earning 4-5%. In fact, as of February 2024, the average money market account rate is just 0.66% according to the FDIC.
/jlne.ws/3wQAHJU
| | | | | | Miscellaneous | | | How China Tried to Fix the Stock Market-and Broke the Quants; Beijing wanted to end a stock-market slump. That led to unintended consequences.
Weilun Soon and Rebecca Feng - The Wall Street Journal
China's biggest quant funds beat the market for years by applying complicated statistical models to stock picking. But they didn't model a key factor-the government. Quantitative funds, which use algorithms to chew masses of data and make trading decisions, have become a powerful force in the U.S., where funds such as AQR Capital Management, Renaissance Technologies and Millennium Management manage huge portfolios and provide an important source of liquidity for small investors. But the industry has at times been controversial, being accused of herd behavior that exacerbates periods of volatility.
/jlne.ws/4cb99PD
****** Let the quants fix themselves, if any still exist.~JJL
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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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| | | Jeff Bergstrom
Editor
| | | Asma Awass
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