| January 10, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Term of the Week: Option Style, A Driver for the Value of an Option Contract
JohnLothianNews.com
This video explores the key distinctions between European and American style options and touches on some exotic options like Asian, Bermuda, and Canary styles. Understanding these different styles is crucial for anyone trading or investing in options, as they can significantly impact the value and flexibility of your contracts. Let's dive in and demystify the world of option styles.
Watch the video »
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Futures Discovery: Careers in the Futures Industry
JohnLothianNews.com
In episode 4 of Futures Discovery, we're diving into the diverse world of careers within the futures industry. From the fast-paced world of trading to the analytical realms of risk management and technology, there's a multitude of career paths in this dynamic field.
Watch the video »
| | | | | | Lead Stories | | | This time, the SEC means it: BlackRock and Grayscale among 11 firms finally approved for spot Bitcoin ETFs
Leo Schwartz - Fortune
After a false start on Tuesday, the Securities and Exchange Commission on Wednesday finally approved spot Bitcoin ETFs.
/jlne.ws/48QpxCr
Cboe Says Bitcoin ETFs to Start Trading Thursday, Though the SEC Hasn't Approved Them Yet
Aoyon Ashraf - CoinDesk
Cboe Global Markets said six spot bitcoin (BTC) exchange-traded funds will be listed and start trading on its stock exchanges on Thursday.
The Ark 21 (ARKB), Fidelity (FBTC), Franklin Templeton (EZBC), Invesco (BTCO), VanEck (HODL) and WisdomTree (BTCW) bitcoin ETFs appeared on the exchange operator's "New Listings" page on Wednesday.
/jlne.ws/3tMgCTW
*****JB: The lead story (above) just came in as this newsletter was about to be posted. It seems the SEC has approved these ETFs.
'A deceptive tactic': Nancy Pelosi disclosed a 7-figure bet on NVIDIA over the Christmas holidays - despite recent efforts to 'permanently ban' lawmakers from trading stocks;
Disclosure shows the former house speaker bought call options on Nov. 22.
Bethan Moorcraft - Moneywise
Rep. Nancy Pelosi (D-CA) and her venture capitalist husband reportedly bet millions on technology giant Nvidia (NVDA) late last year - despite immense scrutiny and backlash against congressional stock trading. The former house speaker bought Nvidia call options on Nov. 22 - her largest stock purchase in the last three years, according to stock trading news site Unusual Whales.
/jlne.ws/3vp1nAC
No Fear: Investors Double Down on Stocks, Bonds
Gunjan Banerji - The Wall Street Journal
Don't be fooled by the stock market's stumble to start 2024.
The roaring stock rally has come to a halt in the first few trading sessions of the year. Under the surface, measures across stocks, bonds and derivatives markets show investors embracing recent market gains and expecting the rally to continue.
/jlne.ws/3tNcCCB
Fake Bitcoin ETF Approval Tweet Causes $90M in Liquidations
CoinDesk via Markets Insider
Price volatility following a series of fake tweets from the U.S. Securities and Exchange Commission (SEC)'s X account caused nearly $90 million worth of bitcoin [BTC] long and short positions to be liquidated, showcasing manipulation risks associated with the industry.
Hackers caught hold of SEC's X account on Tuesday, using it to post a nod for the much-awaited bitcoin exchange-traded fund (ETF) approval decision. It later posted "$BTC," before both tweets were promptly deleted.
/jlne.ws/3NYzBkO
Bitcoin Price Whipsaws as ETF Anticipation Builds After SEC Hack
Joe Light and Jack Denton - Barron's
Cryptocurrencies saw volatile trading Wednesday as traders awaited a decision from the Securities and Exchange Commission on whether to approve spot Bitcoin exchange-traded funds. Digital assets have been buoyed for months by ETF approval hopes, with anticipation reaching fever pitch after the agency's social media account was breached on Tuesday and falsely posted that the funds were approved.
/jlne.ws/3RNKhUG
Jane Street Scores $7 Billion Trading Haul During Market Swings
Paula Seligson, Katherine Doherty, and Jill R Shah - Bloomberg
Jane Street Group LLC reeled in $7.3 billion of net trading revenue in the first nine months of last year, as the proprietary trading giant benefited from market swings and an expansion of its products.
The figures â disclosed to investors as part of a debt deal â also showed the company expected to generate $3 billion to $3.5 billion of net trading revenue in the fourth quarter, according to people familiar with the matter. That would bring it close to the $10.7 billion it made in the full year of 2022, the people said, asking not to be identified discussing private information.
/jlne.ws/3tJUDNr
Millennium backs biggest planned hedge fund launch in more than a year
Costas Mourselas - Financial Times
A portfolio manager at Izzy Englander's Millennium Management is preparing to launch what would be the biggest new hedge fund in more than a year after securing $3bn of capital from his employer and taking up to 30 investment staff with him.
Diego Megia, who worked at Citadel before a five-year stint at Millennium, is targeting $4bn to $5bn of investor capital for the launch of Taula Capital, according to two people familiar with the fundraising effort. The macro hedge fund is expected to start trading in the first half of the year, the people said.
/jlne.ws/48nfjK6
| | | | | | Exchanges | | | CME Group International Average Daily Volume Reaches Record 6.8 Million Contracts in 2023, Up 8% from 2022
CME Group
CME Group, the world's leading derivatives marketplace, today announced that average daily volume (ADV) outside the United States reached a record 6.8 million contracts in 2023, up 8% from 2022. This record was driven largely by growth in Equity Index and Interest Rate products, up 26% and 23% respectively.
/jlne.ws/48sobya
CME and S&P DJI to collaborate on launch of options later this month; The options will be available on S&P 500 annual dividend index futures from 29 January.
Claudia Preece - The Trade
CME Group is set to launch options on S&P 500 annual dividend index futures on 29 January, subject to a regulatory review. The move is set to provide an enhanced, more innovative and diversified offering for clients. Tim Brennan, head of capital markets at S&P Dow Jones Indices (DJI), highlighted the key benefits of the collaboration: "By providing the underlying view into US dividend trends through our S&P 500 Dividend Points Index (Annual), coupled with CME Group's financial products, market participants can track and express their views on an important component of equity returns."
/jlne.ws/41Pxl5n
Abaxx Technologies Sells Preferred Shares to CBOE, TLW and Traxys
Joe Wallace - MarketWatch
Market infrastructure player Abaxx Technologies said it has raised fresh capital to support the launch of its commodity exchange businesses.
The Toronto-listed company said it will bring in $27 million by selling ordinary and preferred shares.
/jlne.ws/48IiBIh
SPAN 2 Framework Energy Model Parameter Changes - Effective January 10, 2024
CME Group
As per normal review, CME Clearing has undertaken a review of the hypothetical stressed scenarios parameter used in the SPAN 2 Framework's natural gas pod. In particular, within the SPAN 2 framework, the hypothetical stressed scenarios parameter is incorporated in the stress value-at-risk sub-component of the market risk component. Following this review, CME Clearing has determined it will introduce hypothetical stressed scenarios parameter changes to align with current volatility across the term structure for natural gas. While the impact to production portfolios will vary depending upon the risk profile for each individual portfolio, CME Clearing expects an increase in margin requirements for spreads against the front month natural gas contract and the total margin for futures and options products to increase by under 1%.
/jlne.ws/48J8Wk7
| | | | | | Regulation & Enforcement | | | Wall St sues CFTC over commodity trading crackdown
Christopher Doering - Reuters
Two major financial trade groups sued the U.S. futures regulator on Friday over new rules to crack down on commodity speculation, launching a second legal assault against the biggest U.S. financial overhaul in decades.
The suit, which had been widely expected given years of fierce debate over the need for so-called "position limits", the groups said the Commodity Futures Trading Commission's rule to prevent excessive speculation in markets like oil and gold was procedurally flawed and "lacked a reasoned basis."
/jlne.ws/3vyp9dF
| | | | | | Technology | | | TradeStation Securities and CQG Collaborate to Provide CQG's Enhanced Analytics Combined with TradeStation's Multi-Asset Brokerage Capabilities; Integration with CQG provides traders functionality for equities and futures-all in one place through CQG's Integrated Client platform.
CQG
TradeStation Securities, Inc. ("TradeStation Securities"), an award-winning,* self-clearing online brokerage for trading stocks, ETFs, options and futures, has announced that CQG, a global provider of high-performance technology solutions for traders, brokers, commercial hedgers and exchanges, has integrated with TradeStation Securities' brokerage services. This arrangement further expands CQG's multi-broker network and gives TradeStation Securities clients an array of additional functionality for trading futures and equities.
/jlne.ws/3RRoWK0
****** Big deal for both firms, who were rivals at one time.~JJL
| | | | | | Moves | | | Sr Manager, Product Management
Cboe Global Markets
Cboe is looking for a product manager to join the Risk & Market Analytics team. This role will have broad exposure to initiatives at Cboe.
Base pay range: $124,000.00/yr - $204,000.00/yr
/jlne.ws/48ngAAS
| | | | | | Strategy | | | Eli Lilly Could Be the Next Apple Stock. It Still Looks Cheap.
Steven M. Sears - Barron's
The 21st century has been defined by so much conflict that it obscures an obvious, and profound, fact.
/jlne.ws/3HezEFr
Hedge Funds Are Stepping Up Exposure to ESG Strategies, UBS Says
Lisa Pham - Bloomberg
Hedge fund managers are increasingly incorporating environmental and social metrics in their investments, according to research by analysts at UBS Group AG.
"Hedge funds have continued to step up sustainability integration into investment strategies," according to the Jan. 10 note published by the Global Wealth Management business of UBS. There's also "a subset pursuing dedicated sustainable investment deployment via equity long/short and credit strategies, mostly within thematic equities and green, social and sustainable bonds."
/jlne.ws/3NYxo9n
Fed
Cboe (Video)
In #Vol411, @JoeTigay covers the market rally to start the year and lows in the $VIX Index as markets head into a critical period of data releases as well as earnings season.
/jlne.ws/41Qqjxh
| | | | | | Events | | | OIC 2024 Educational Series: Option Basics, Pricing Models and the Option Greeks
OIC
The Options Industry Council (OIC) will offer a new series of educational webinars during the first quarter of 2024, with two sessions planned for each month. As always, the goal is to help investors expand their knowledge of the risks and potential benefits of exchange-listed options.
Beginning in January, OIC will provide an overview of option basics, focusing on option terminology in the first session, followed by a discussion of call and put buying for the second webinar. In February, the focus across the two webinars will be on option pricing and models. During March, the main option Greeks will be discussed, starting with Delta and Gamma in the first session, then Theta, Vega and Rho afterward.
/jlne.ws/4aOv0vz
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