| August 21, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Surge in zero-day options sparks fears over market volatility
George Steer - Financial Times
The market for extremely short-dated options on US stock market moves has boomed in recent weeks, sparking fears among analysts that the daily bursts of activity could be causing sharp sell-offs in equities.
So-called zero-day options, which allow traders to take targeted positions in stock markets around events such as economic data releases or monetary policy meetings, have surged in popularity since the start of the coronavirus pandemic.
/jlne.ws/3YM21TE
China eyes new derivatives contracts to boost investor morale
Jiefei Liu - Risk.net (Subscription)
China is planning to launch a range of new derivatives contracts in a bid to shore up its ailing stock markets, but some market participants are sceptical about the effectiveness of the move.
The China Securities Regulatory Commission announced on Friday that it will launch options and futures contracts on the Shenzhen 100 index as well as an options contract for the existing exchange-traded funds on the small-cap CSI 1000 index to "better meet the risk management needs of investors".
/jlne.ws/47HGUWr
How hedge funds are positioning themselves for a soft landing
Nell Mackenzie, Carolina Mandl and Summer Zhen - Reuters
Bond, stock and currency market bears with portfolios designed to gain from a recession have been fleeing losing trades as big economies such as the United States prove more resilient than expected. A so-called soft landing, where central banks manage to curb inflation without triggering a recession, has gained traction, prompting some investors to take on more risk.
/jlne.ws/44m4ogZ
Investors Are Leaving Stocks for the Allure of Risk-Free Payouts in Bonds; Bonds are most attractively valued against stocks since 2004; Stock volatility edges up as inflows into the asset class ease
Denitsa Tsekova - Bloomberg
Volatility in the world's biggest bond market has finally caught the attention of investors on Wall Street who've been plunging into stocks all year.
A Treasury rout that pushed 10-year yields close to the highest since 2007 has spurred what is now the biggest break in an $8 trillion equity rally that had sent the Nasdaq 100 up as much as 45% in 2023. Major US benchmarks just slid in a third straight week for the first time since December.
/jlne.ws/44g1kDa
Quant Trader Alex Gerko Doubles Fortune to $11B as XTX Profit Surges
Benjamin Stupples and Tom Maloney - Bloomberg
A former Deutsche Bank AG trader is rapidly amassing enough wealth in the fallout from volatile interest rates and inflation to rival some of the richest billionaires in finance.
Alex Gerko's fortune has surged to $10.8 billion after the holding company of his quantitative trading firm XTX Markets paid out a record GBP1.6 billion ($2 billion) dividend to its owners earlier this year. XTX also increased profits more than 50%, helping to roughly double the 43-year-old's net worth, according to the Bloomberg Billionaires Index.
/jlne.ws/3KNbSm4
Funds sell CBOT corn, soy and wheat as supply fears wane
Karen Braun - Reuters
Speculators have ramped up their comfort with global corn supplies this month, though U.S. crop uncertainties continue lingering as the Corn Belt will be gripped by hot and dry weather this week, possibly impacting yield. In the week ended Aug. 15, money managers increased their net short in CBOT corn futures and options to 72,580 contracts from 26,656 a week earlier and a net long of 16,741 two weeks earlier. That marked funds' most bearish corn view in three months.
/jlne.ws/3P30zZJ
| | | | | | Exchanges | | | Cboe eyes expansion into options trading in Canada
Andrew Willis - The Globe and Mail
After building the country's third largest equity trading platform with a series of acquisitions, Cboe Global Markets Inc. CBOE-A is scouting for opportunities to move into the rapidly growing Canadian options market, a strategy that fits with the Chicago-based exchange's core international business.
In Toronto this month for meetings with clients and staff, Cboe (insiders pronounce it "sea-bow") chief executive officer Edward Tilly said in an interview the company has exceeded internal growth targets since buying trading networks MatchNow in 2020 and Neo Exchange in 2022.
/jlne.ws/3P4w6KC
CME Group to launch BTC, ETH reference rates aimed at Asia's investors
Jesse Coghlan - CoinTelegraph
On Aug. 16, derivatives marketplace CME Group said it's partnered with crypto indices provider CF Benchmarks and on Sept. 11 to launch the two Asia Pacific-focused crypto reference rates. Reference rates are used as a credible source of a cryptocurrency's price and are used - in CME's case - to price settlements of crypto futures contracts.
/jlne.ws/3E7NIzb
Position Limits-Cash Settled Interest Rate Listed Products
TMX
The applicable position limits for cash settled interest rate futures and options on cash settled interest rate futures have been updated and are reflected in the position limit file. The position limit file is retrievable here. The position limits will apply as follows.
/jlne.ws/3OHq01G
| | | | | | Strategy | | | Opinion: Stock market's decline is just beginning, this top fund manager says
MarketWatch
If August's stock-market weakness has you concerned, brace yourself because it's going to get a lot worse.
That's the outlook of Eli Salzmann, who manages the Neuberger Berman Large Cap Value Fund NPRTX. While most investors have migrated to the "soft landing" and "no landing" camps, Salzmann holds steadfast to his belief that a recession is on the way.
Why should you care what he thinks? Because where most mutual fund managers have a tough time beating the U.S. market, Salzmann's $12.6 billion fund outperforms nicely over the past three- and 10 years, according to Morningstar Direct.
/jlne.ws/45jvNkS
This market strategist expects stagflation and is investing for it now.
Jonathan Burton - MarketWatch
There's always a bull market somewhere â if you can find it.
Keith McCullough encourages investors to join him in the hunt. You'll need to be agnostic and open-minded, the CEO of investment service Hedgeye Risk Management says. If you're wedded just to U.S. stocks, or the market's latest darlings, you're setting yourself up for disappointment â particularly in the hostile environment McCullough sees coming.
/jlne.ws/3P8ByfS
Big Week for Data and Earnings
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop gives us #options updates from Friday, and an overview of economic data to be on the lookout for this week, including existing home sales, new home sales, crude oil inventories, durable goods, and more.
/jlne.ws/45Dfak8
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