| | | | | | | | February 04, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Henry Hub Natural Gas options had a record January, trading an average 341K contracts daily, up 25% over the previous record. This growth was driven by the continued shift to electronic trading. January on-screen ADV was a record 235K contracts, with CME Direct being the execution platform of choice, accounting for 150k+ sides daily. Learn more.
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CME Group reported record-breaking energy options activity in January 2025, with average daily volume (ADV) reaching an all-time high of 606,000 contracts, surpassing the previous record by 77,000 contracts daily. The surge was driven by unprecedented demand for Henry Hub Natural Gas options, which saw a record 385,000 contracts traded electronically-a 5% year-over-year increase in on-screen participation. CME solidified its position as the leading electronic marketplace for Henry Hub derivatives, with 69% of total options volume executed electronically and 21% of activity originating internationally. This growth reflects heightened global hedging amid winter demand volatility and CME's expanding reach in energy risk management. ~JJL
| | | | | | Lead Stories | | | The Necessity of Real-Time Options Data for Retail Participants; Access matters, especially when every second counts.
Cboe
While retail participation in options markets had been on the uptick over the last 10 years, it surged during the pandemic, where listed options volume reached (then) all-time highs. The record-breaking market activity has continued since then: in 2024, a record 12.2 billion options contracts traded in the U.S., up 10.6% from 2023's total. That's the fifth consecutive record year for volumes.
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Corporates eye complex FX hedges as carry costs mount; Leveraged forwards and options-based structures entice treasurers facing rates uncertainty and FX volatility
Joe Parsons - Risk.net
The shake-em-up economic policies trailed by new US president and so-called "disruptor-in-chief" Donald Trump have left corporate treasurers on both sides of the Atlantic nervously eyeing their cost of foreign exchange hedging. FX volatility has spiked amid continued threats by Trump of tough tariffs on Canada, Mexico, China and the European Union. https://jlne.ws/4homkyK
World's Largest Options Market Weathers Indian Regulatory Curbs; Derivatives trading surged on BSE, stablized on NSE last month; BSE may be benefiting, Fintrekk's Amit Kumar Gupta says
Savio Shetty - Bloomberg
India's derivatives market is showing signs of resilience after a regulatory crackdown on frenzied options trading. While the value of derivatives exchanged on the main bourse slipped in January from December on a notional basis, the price of contracts traded increased slightly. For peer BSE Ltd., the average daily turnover climbed 23% on a notional basis and 29% when looking at premium - and both were up more than 85% relative to January 2024. This all happened as the benchmark NSE Nifty 50 Index completed its worst run of monthly losses since 2001.
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Trump's Tariff Shock Forces Rethink of Canadian Index Targets; S&P/TSX Composite Index fell as much as 3.1% on Monday; Strategists say sweeping tariffs could trigger a correction
Geoffrey Morgan and Stephanie Hughes - Bloomberg
One day of extreme volatility has shaken Canada's stock market to the point that strategists may re-consider their benchmark targets for the entire year.
So says Philip Petursson, chief investment strategist at IG Wealth Management. Stock-market prognosticators on both sides of the border that didn't incorporate US President Donald Trump's tariffs into their outlooks will probably need to lower their year-end expectations for the S&P/TSX Composite Index and the S&P 500 Index, he said.
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| | | | | | Exchanges | | | Cboe Europe plans trading surge with slew of promotions
Etienne Mercuriali - Global Trading
Cboe Europe has announced several leadership changes within its equities division as it continues to expand its market presence. Cboe Europe is the largest pan-European trading venue by volume, with a 25% market share in cash equities as of January 2025. The exchange has seen continued growth in its trading services, with its periodic auction accounting for 8.8% of all continuous trading in December 2024, up from 5.3% the previous year. Cboe BIDS Europe, the firm's block trading platform, has maintained its position as Europe's largest block trading venue for 33 consecutive months, reaching a record average daily volume (ADV) of EUR575 million in 2024.
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DSPX Index Nears 3Y High as Focus Shifts From AI to Trade
Mandy Xu - Cboe
Implied volatilities are up pre-market as US imposed tariffs on Canada, Mexico, and China over the weekend. USDCAD 1M implied vol has almost doubled since the election, up another 1.3 pts last week to a 2-year high of 8.6%. Notably, fears of escalation are also increasing, as Trump threatens tariffs on other regions. EURUSD 1M implied vol jumped 1.1 pts to 8.5% this morning.
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CME Group Reports Record January ADV of 25.7 Million Contracts
CME Group
CME Group, the world's leading derivatives marketplace, today reported its January 2025 market statistics reached 25.7 million contracts, the highest January average daily volume (ADV) on record, up 2% year-over-year. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
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U.S. farmers retain optimistic outlook for 2025 despite ag trade uncertainty
CME Group
U.S. farmers began 2025 with an optimistic outlook, as the January Purdue University/CME Group Ag Economy Barometer rose 5 points from the previous month to a reading of 141. This increase was driven by a 9-point growth in the Current Conditions Index and a 3-point rise in the Future Expectations Index. The improvement in sentiment was linked to higher crop prices between December and mid-January and fewer producers citing crop and livestock prices as a top concern. For instance, Eastern Corn Belt prices for near-term delivery of corn and soybeans rose by 9% and 5%, respectively, during that period. While farmers' views of current conditions improved, optimism about the future remained even stronger, with the Future Expectations Index exceeding the Current Conditions Index by 47 points. This month's survey was conducted between Jan. 13-17.
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Non-USD denominated options Greeks now on CME Direct
CME Group
CME Direct now supports Greeks for non-USD denominated options, enhancing the platform's functionality and providing traders with more comprehensive risk management tools.
Options Greeks, such as Delta, Vega, Theta and prices in implied volatility are now available for options denominated in various currencies.
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NYSE Exchanges To Close In Observance Of Washington's Birthday
NYSE
In observance of Washington's Birthday, the New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, NYSE National, NYSE American Options, NYSE Arca Options, and NYSE Bonds markets will be closed on Monday, February 17, 2025.
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Intercontinental Exchange CFO Warren Gardiner to Present at the Bank of America Securities 2025 Financial Services Conference on February 11
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, announced today that Warren Gardiner, CFO, will present at the Bank of America Securities 2025 Financial Services. The presentation will take place on Tuesday, February 11 at 1:00 p.m. ET. The presentation will be available live and in replay via webcast and can be accessed in the investor relations and media section of ICE's website at http://ir.theice.com.
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| | | | | | Regulation & Enforcement | | | Trump Likely to Make Fresh Picks to Head FDIC, CFTC
Saleha Mohsin - Bloomberg
The Trump administration will likely choose fresh nominees to oversee the Federal Deposit Insurance Corp. and Commodity Futures Trading Commission instead of installing the current acting heads of those agencies to permanently lead the regulators, according to a person familiar with the matter. President Donald Trump picked Travis Hill, who had been vice chairman, to serve as acting head of the FDIC on Jan. 20. Former Chairman Martin Gruenberg departed a day earlier. Trump also chose junior CFTC Commissioner Caroline Pham as acting chair of the swaps and derivatives regulator. Pham had been considered as a contender to fill the position on a permanent basis. Other candidates for the permanent chairmanship have included Summer Mersinger, the senior Republican at the CFTC, and Brian Quintenz, a former Republican CFTC commissioner.
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CFTC probes Super Bowl wagers offered by Crypto.com, Kalshi: Report; The US commodities regulator is investigating Super Bowl markets offered by Crypto.com and reportedly Kalshi, asking them how they comply with derivatives rules.
Brayden Lindrea - CoinTelegraph
Crypto exchange Crypto.com says it will continue offering wagers on the Super Bowl while it works with the US commodities regulator to address its concerns. It comes after Bloomberg reported on Feb. 4 that Crypto.com and predictions market Kalshi was asked by the US Commodity Futures Trading Commission to explain how their Super Bowl events contracts comply with derivatives regulations. Crypto.com, which operates a US-based derivatives exchange, alerted the CFTC on Dec. 19 that it would start trading the contracts on Dec. 23.
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Robinhood Yanks Super Bowl Betting Contracts After Regulator's Pushback; CFTC asked the brokerage to stop offering customer access to contracts, warning they might be illegal blurring of financial markets and gambling
Alexander Osipovich, Hannah Erin Lang and Katherine Sayre - The Wall Street Journal
Robinhood Markets said Tuesday that it was withdrawing its plans to offer betting contracts on the Super Bowl, following pushback from the Commodity Futures Trading Commission, which raised concerns that the contracts might be illegal.
"We were in regular contact with the CFTC prior to launching this product, and we believe we are in full compliance with all applicable regulations," said Robinhood General Counsel Lucas Moskowitz. Still, "we are heeding their directive to cease offering these contracts," he added.
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SEC approves Intercontinental Exchange's ICE Swap Trade application
Dave Kovaleski - Financial Regulation News
What this means is that the company's ICE Swap Trade can now offer single-name credit default swaps (CDS) trading for its dealer and institutional customers on its SBSEF. This adds to ICE's suite of execution solutions within fixed income.
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| | | | | | Technology | | | DeepSeek Is Just the Latest Hedge Fund Innovation; From the telescope to the telegraph to AI, finance has promoted the use of new technology.
Marc Rubinstein - Bloomberg
Hedge funds have long gotten bad press. Criticized for short selling, corporate agitation or destructive greed, their contribution to economic activity isn't always clear. For as long as they have been around, they've been subject to scrutiny over the role they play in society relative to the value they extract. Last week's propulsion of DeepSeek to the top of Apple Inc.'s App Store charts puts a different slant on the popular narrative. DeepSeek shocked the world when it released artificial intelligence models that achieve similar performance to those currently available on the market at a fraction of the cost. While various aspects of the company's story have drawn attention, one particularly notable detail stands out: It was incubated by a hedge fund.
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DTCC Announces ComposerX; ComposerX, formerly the Securrency product suite, is designed to facilitate digital assets adoption by streamlining token creation and settlement
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced ComposerX, a comprehensive suite of platforms designed to streamline token creation and settlement with the objective of accelerating digital asset adoption throughout the financial ecosystem. ComposerX is a complete, end-to-end suite for managing digital assets through their full lifecycle - including issuance, distribution, servicing, and reporting. ComposerX provides powerful transaction, account and inventory management capabilities, scalable data management tools, and an open smart contract framework for tokenization that's designed to automate complex financial processes and enable asset discoverability with reconcilable, self-describing data.
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| | | | | | Education | | | Breaking the Volatility Code Speed Matters More Than Size
tastylive (Video)
It's not always easy to take the measure of a market, whether you've been trading for a day or a decade. On this segment we look under the hood-options probabilities, volatility, trading strategies, futures, you name it-so your trading mechanics are built to manage more winners.
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| | | | | | Strategy | | | Tariffs Are Roiling the Market. Here's How To Protect Yourself.; Experts suggest dividend stocks to weather volatility. And consider bonds and gold, too.
Paul R. La Monica - Barron's
Tariff threats spook Wall Street when the threat becomes reality. And they're about to become very real.
The proof is how the stock market sank after President Donald Trump fired the first shot in a trade war with Canada, Mexico, and China over the weekend. Yes, the indexes clawed back a little bit of their losses Monday after Washington gave Mexico a monthlong reprieve, but everyday investors want a safer, more predictable place to put their money.
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This market-timing signal is telling investors the time to sell stocks is getting closer.
Barbara Kollmeyer - MarketWatch
Bank of America says Wall Street strategists are too bullish.
The news pipeline has had this stock market and investors thrashing about lately. And that looks set to continue, with China now jumping into the tariff fray, and equities looking weaker for Tuesday. That's as we're still in the belly of earnings season, with results from a big Nvidia competitor looming after the close.
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| | | Jeff Bergstrom
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