| | | | | | | | November 12, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
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Joe Schroeter has a blog post titled 'Have the Odds for "New" Exchanges to be Successful Improved?' He writes that historically, new exchanges have struggled to succeed in established markets, often facing poor odds against incumbents. However, Schroeter suggests that recent developments-such as advancements in trading technology, new instruments, and regulatory changes-have improved their chances. At the recent FIA Quarterly ETD review, Will Acworth's Q3 2024 volume report highlighted how no single company controls over one-third of options volume, with retail trading adding significant participation. Newer exchanges now focus on innovations like fractional trading, tokenized assets, and event-based trading rather than relying on established players to drive volume. Additionally, the DTCC has shown openness to tokenization, accelerating potential adoption for core markets. As regulatory frameworks grow more accommodating, Schroeter believes that the ability to lead innovation and manage governance will be crucial for exchanges aiming to succeed in the evolving market landscape. ~JJL
| | | | | | Lead Stories | | | The 'Tesla-financial complex' roars back to life Notional trading value of Tesla options hit $245bn on Friday
George Steer - Financial Times
Investors who were betting against Tesla have had a rough few days, Bloomberg writes: Hedge funds that had short positions against Tesla between election day and Friday's close took an on-paper hit of at least $5.2 billion, according to Bloomberg calculations based on data compiled by S3 Partners. [...] Since the Nov. 5 election, Tesla shares have gained close to 30%, representing well over $200 billion in additional market value. By Friday, the company's valuation exceeded $1 trillion. Against that backdrop, hedge funds that had previously built short bets have since rushed to reverse course.
/jlne.ws/3YJmb0S
Option Traders Target Yuan, Euro as Losers From Trump Presidency; Tariff fears will hurt yuan, political risks weigh on euro; Dollar-yuan call option trades outnumber puts by 3 to 2: DTCC
David Finnerty - Bloomberg
Currency traders have placed new bets that the euro and yuan will be the hardest hit as US President-elect Donald Trump's proposed tariff policies result in a stronger dollar.
Investors have been buying dollar call options primarily against these currencies since Trump's victory last week, according to foreign-exchange traders. Euro-dollar and dollar-yuan options were the most heavily traded contracts on Monday, data from the Depository Trust & Clearing Corp. showed.
/jlne.ws/3ClG7PI
Market Fear Gauge Stays Lower as Stocks Hit Records
Brian Swint - Barron's
The market's so-called fear gauge-otherwise known as the CBOE Volatility Index-was staying lower after the S&P 500 and the Dow both hit records to start the week.
The VIX held at around 15, slightly lower than it was just after the election last week. It was at about 23 at the end of October.
/jlne.ws/3AGZTEV
ETF flows smash full year record; The $1.4tn pumped into global ETFs in the first 10 months of the year surpasses the $1.33tn racked up in all of 2021
Steve Johnson - Financial Times
Investors have poured record sums into exchange traded funds this year, even before a buying spree that was ignited by the election of Donald Trump as the next US President. As of October 31, global net flows into the burgeoning ETF industry had hit $1.4tn, according to data from BlackRock, eclipsing 2021's full-year record of $1.33tn. Barring a sharp turnaround, the final full-year net flows tally looks destined to be higher still, after $22.2bn was pumped into US-listed ETFs last Wednesday, the day after the election, according to State Street Global Advisors, shattering the previous post-election day record of $4.9bn in 2020.
/jlne.ws/3O2JjSS
BlackRock Targets Money-Market Fund Business in New ETF Push
Katie Greifeld and Emily Graffeo - Bloomberg
BlackRock Inc. is throwing its weight behind an early push to bring exchange-traded funds to money-market investors. The asset-management company - which helped hasten the widespread adoption of ETFs - is seeking regulatory approval for two new funds, the iShares Government Money Market ETF and the iShares Prime Money Market ETF, according to filings with the Securities and Exchange Commission.
/jlne.ws/3CnMB0x
Wall Street bonuses will rise for the first time since 2021, consultant says
Tatiana Bautzer - Reuters
Wall Street firms are expected to pay heftier bonuses for this year, the first increase since a bumper year in 2021, according to a report by compensation consultancy Johnson Associates.
Payouts will probably rise after financiers benefited from several factors in recent months: a recovery in dealmaking, the Federal Reserve cutting interest rates and equity markets surging to record highs, said the consultancy's founder, Alan Johnson.
/jlne.ws/3Cpspvm
| | | | | | Exchanges | | | ICE to Start First EU Bond Futures Trading Next Month
Greg Ritchie - Bloomberg
Intercontinental Exchange Inc. plans to launch a futures contract for the European Union's bonds next month, a move that could eventually aid trading volumes in the bloc's securities. The derivatives will first trade on Dec. 9, subject to regulatory approval, according to a ICE notice to clients dated Friday. The futures will reflect movements in the ICE 8-13 Year European Union Index, it said. It's a welcome development for the EU, which has touted a futures market as a way of boosting trading in its debt. While futures are often preferred by investors given they tend to offer better liquidity, it's far from guaranteed that the newly-launched contract will attract sufficient volumes.
/jlne.ws/3O93XAM
Joined forces: Flow Traders partner of Eurex on crypto offering
Eurex
In April 2023, Eurex launched futures on the FTSE Bitcoin Index. Over 100,000 traded contracts later - representing around $4 billion in notional - we enhanced our crypto offering by adding FTSE Ethereum Index Futures and Options this August. This marked another milestone in our ambition to offer secure access to cryptocurrencies in a regulated market environment and a good opportunity to talk to our market maker partner, Edgar de Bruin, Head of Digital Assets Trading at Flow Traders, and to Nicolae Raulet, Crypto Derivatives Product Manager at Eurex.
/jlne.ws/3YRTgrE
Tradeweb and Tokyo Stock Exchange Collaborate to Expand Liquidity in Japanese ETFs
Tradeweb
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, and Tokyo Stock Exchange (TSE), one of the largest stock exchanges in the world, today announced their collaboration to offer institutional investors enhanced access to liquidity in Japanese exchange-traded funds (ETFs). The launch of a new direct link between Tradeweb and TSE's request-for-quote (RFQ) platform, CONNEQTOR, allows Tradeweb buy-side clients to include CONNEQTOR liquidity providers when launching a trade enquiry on the Tradeweb Japan-listed ETF marketplace. Global X Japan executed the first transaction using this new connectivity.
/jlne.ws/40JKApF
Nasdaq Announces End-of-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date October 31, 2024
Nasdaq
At the end of the settlement date of October 31, 2024, short interest in 3,083 Nasdaq Global MarketSM securities totaled 12,172,949,545 shares compared with 12,303,886,017 shares in 3,089 Global Market issues reported for the prior settlement date of October 15, 2024. The mid-October short interest represents 3.02 days compared with 3.26 days for the prior reporting period. Short interest in 1,664 securities on The Nasdaq Capital MarketSM totaled 2,128,624,815 shares at the end of the settlement date of October 31, 2024, compared with 2,127,809,664 shares in 1,659 securities for the previous reporting period. This represents a 1.05 day average daily volume; the previous reporting period's figure was 1.17.
/jlne.ws/3CoMIck
| | | | | | Strategy | | | An Options Trader's Guide to Election Day Fallout; Tracking ETF option activity articulates option trader sentiment after last week's results
Patrick Martin - Schaeffer's Investment Research
Indulge, for a second, one last 2024 election postmortem. The American people have chosen former President Donald Trump to take the reins of the U.S. government once more. We've telegraphed 'qui bono?' from another Trump administration and reading recent options-centric tea leaves confirms a lot of our initial biases.
/jlne.ws/3Z1LX1w
Higher BPR Doesn't Mean Higher Risk
Kai Zeng - tastytrade
When you buy or sell stocks, some of your investment money is held back to cover potential losses. This is what's known as buying power reduction (BPR). Think of it as a safety net to ensure you have enough funds in case the investment doesn't go as planned.
For strategies like strangles, where you predict stocks will stay within a certain price range, the BPR is about 20% of the stock price. If a stock is volatile, the cushion may increase. For more conservative approaches, like iron condors, which set defined profit and loss levels, the BPR is much lower-between 5% and 30%.
/jlne.ws/3Z3XvSf
Bitcoin Hedge Funds' Just-About-Risk-Free Trade Is Roaring Back; Futures premium on the CME is fast approaching a year high; FalconX says credit desk is seeing increased demand for margin
David Pan - Bloomberg
The meteoric pace of the record-breaking rally in Bitcoin is making one of the most popular trades for crypto hedge funds even more lucrative than usual, likely helping to propel the original digital currency even higher to once unfathomable heights. Bitcoin, which has surged around 25% since a now more crypto friendly Donald Trump won the US presidential election last week, jumped as much as 6.3% to an all-time high of almost $85,000 on Monday. That has pushed the spread between Bitcoin futures and the digital currency's price to the most since March, when prices surged to a previous record after the introduction of US exchange-traded funds holding the tokens.
/jlne.ws/3O2novc
Bitcoin ETFs Are a Hot Trump Trade. How to Pick the Best Ones.
Ian Salisbury - Barron's
Donald Trump's election victory has kindled more interest in popular Bitcoin exchange-traded funds, and, while there may be reasons for adding the cryptocurrency to your portfolio, it is important to pick the right ETF.
/jlne.ws/3YIDTBv
| | | | | | Miscellaneous | | | Elon Musk-Loving Day Traders Are Sweeping Speculative Markets
Yiqin Shen and Vildana Hajric - Bloomberg
Elon Musk's day-trading fan club is on a buying spree in some of the most speculative parts of the market, from the joke cryptocurrency Dogecoin to a controversial closed-end fund that counts SpaceX among its key holdings - all in hopes that Donald Trump's election will release more animal spirits. Destiny Tech100 Inc. (ticker DXYZ), which holds shares of private-market unicorns like SpaceX and Sam Altman's OpenAI, has already surged roughly 280% over the past week since Trump recaptured the presidency, data compiled by Bloomberg show. The rally triggered multiple volatility halts Monday, and sent its shares up as much as 38% after a 64% jump Friday. Meanwhile, Dogecoin was up nearly 20% in Monday trading amid a broad crypto rally.
/jlne.ws/4g1riRd
***** They love Musk because they love volatility and he is Mr. Volatility.~JJL
The winners of Wall Street bonus season this year: the underwriters
Emmalyse Brownstein - Business Insider
Bonuses are projected to be up across the financial-services industry - asset management, alternatives, and investment banking - for the first time since 2021, a new report said.
The compensation consultancy Johnson Associates issued its annual bonus findings on Tuesday. It predicted that some financial-services professionals could see year-end bonus increases of as much as 35% over last year.
/jlne.ws/3CAFWQD
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