| | | | | | | February 14, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
OCC's Andrej Bolkovic Discusses Zero-Dated Options, Industry Growth, and Clearing Innovations at FIA Expo
JohnLothianNews.com
The rise of zero-day options and the evolving landscape of clearing were key themes in an interview with Andrej Bolkovic, CEO of The Options Clearing Corporation (OCC), at FIA Expo in November. Bolkovic addressed risk management, industry growth, and OCC's clearing system modernization efforts, providing insights into the shifting derivatives landscape.
Watch the video »
| | | | | | Lead Stories | | | Traders Look for $10 Million Payout in Bet on 5% US Yield; Wager was placed on options tied to US 10-year futures; A similar bet was placed last week ahead of hot US inflation
James Hirai - Bloomberg
Options traders are piling into bets the 10-year Treasury yield will jump to 5% - a level last seen in 2023 - within the next five weeks.
The latest wager will pay as much as $10 million, almost 10 times the premium paid, if the yield climbs around half a percentage point before the options expire. A similar wager, but expiring in a week, was placed before Wednesday's data showed US inflation ran hot in January.
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Autocall curbs hit long-dated Nikkei and HSCEI options; Collapsing Asia structured products inventory saps market-makers of long-dated vol supply
Chris Davis - Risk.net
Long-dated options on popular Asia stock indexes are becoming a rare sight on exotics desks lately. The reason, dealers say, is that Mrs Watanabe is no longer supplying volatility. Regulatory clampdowns on the sale of retail structured products in Japan and South Korea have seen autocallable bond issuance on once-popular underlyings including the Nikkei 225 and China's HSCEI come to a near standstill, choking off the supply of longer-dated volatility on these indexes.
/jlne.ws/4b1Sn5k
Degree of influence 2024: volatility and credit risk keep quants alert; Quantum-based models and machine learning also contributed to Cutting Edge's output
Naomi Cardona Castellanos - Risk.net
Volatility modelling is a topic that continues to fascinate and frustrate quantitative finance experts, as Risk.net's Cutting Edge section demonstrated in 2024. Among the 22 papers published last year, volatility modelling was a recurring theme. Julien Guyon, professor of finance at France's Ecole nationale des ponts, established an arbitrage-free continuous-time model, which maintains accurate smile calibrations for pricing and hedging exotic options.
/jlne.ws/4b2wYJ3
China explores relaxing rules to allow multi-asset ETFs; Regulator aims to achieve 'significant growth' in index-based investment
Roxanne Liu - Financial Times
China's securities regulator is exploring expanding index-based investing by allowing fund firms to launch multi-asset exchange traded funds and other innovative index products. The potential moves are part of China's efforts to boost longer-term stock holdings and revive its capital markets, which in January included telling fund firms to increase their A-share holdings by at least 10 per cent annually over the next three years.
/jlne.ws/3COuFgi
Reddit Chat Rooms Poised to Help Drive Hedge Fund, Investor Bets
Katherine Doherty - Bloomberg
Amateur investors who banded together on Reddit during the meme-stock saga are poised to help hedge funds and asset managers place their market bets. That's because of an agreement between Intercontinental Exchange Inc. and Reddit Inc. to develop new data products for the financial industry that leverage the swathes of daily posts, comments and videos on the social-media firm's forums. Just like any other data point, Reddit's content will be analyzed to help detect trends impacting capital markets, Chris Edmonds, president of fixed income and data services at ICE, said in an interview. These could inform trading strategies, algorithms and gauge public sentiment of markets in real time.
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*****This was a highly strategic move by ICE, as Reddit has become the leading community for market and company discussions. Meanwhile, another once-useful data source, Twitter/X, has declined in value since Musk's acquisition.~JJL
Hedge Fund Startup That Replaced Analysts With AI Beats the Market
Harry Brumpton and Georgina McKay - Bloomberg
A hedge fund startup that uses artificial intelligence to do work typically handled by analysts has outperformed the global stock market in its first six months while slashing research costs. The Sydney-based firm, Minotaur Capital, was founded by Armina Rosenberg and Thomas Rice. Rosenberg previously managed a global equities portfolio for tech billionaire Mike Cannon-Brookes and ran Australian small-company research for JPMorgan Chase & Co. when she was 25. Rice is a former portfolio manager at Perpetual Ltd.
/jlne.ws/3Qf1S7L
| | | | | | Exchanges | | | MIAX Named Best Trading Platform, Receives Technology Innovation Award at Fund Intelligence Operations and Services Awards 2025
MIAX
Miami International Holdings, Inc. (MIH), a technology-driven leader in building and operating regulated financial markets across multiple asset classes, today announced that MIAX was named "Best Trading Platform" for the third consecutive year and the recipient of the "Technology Innovation Award" at the Fund Intelligence Operations and Services Awards 2025.
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Euronext publishes Q4 and full year 2024 results
Euronext
Euronext delivered double-digit revenue growth in 2024 thanks to its diversified revenue profile and confirms the achievement of its 2024 targets. Euronext reached record adjusted EPS in 2024 through cost discipline and strategic capital allocation. 2025 will be a year of investment for innovation and growth.
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ASX Limited - 2025 Half-Year Results Market Release
ASX
Attached is a copy of the market release relating to the 2025 Half-Year Financial Results.
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DAX derivatives: global exposure and anticipated volatility during the German elections
Eurex
As the German parliamentary elections on 23 February 2025 draw near, global investors are eyeing potential prospects. One of such possibility lies in DAX derivatives, which could be an efficient risk management tool for navigating the election cycle. The DAX index, now consisting of 40 major German companies, is not just a barometer of the German economy but also a reflection of global economic trends. With roughly 20 percent of DAX companies' sales generated within Germany, the index is significantly influenced by international markets. This global exposure makes DAX derivatives a compelling choice for traders looking to capitalize on both domestic and international political events.
/jlne.ws/3X130Q8
Micro futures, broader trading possibilities; Q&A: Navigating market volatility: Trade German benchmark with Micro and Mini-DAX Futures
Eurex
The futures on the German index (DAX) are highly liquid, boasting an average daily volume of EUR 24.58 billion in 2024, making them a popular choice among traders. The introduction of Micro and Mini-DAX futures broadened the appeal of DAX futures to a wider range of market participants due to their smaller contract sizes. This development has been particularly beneficial for clients of Madrid-based fintech broker iBroker. In this article, Enrique Marti, CEO of iBroker, and Vincenzo Zinna, Equity & Index Sales EMEA at Eurex, explain how these products - and others in the pipeline - enable investors to trade on the strength of one of Europe's economic fulcrums.
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| | | | | | Regulation & Enforcement | | | SEC Delays Short-Selling Disclosure Regime
Anna Lyudvig - Traders Magazine
The Securities and Exchange Commission (SEC) has delayed its first-ever short-selling disclosure regime by one year, pushing Rule 13f-2's initial reporting deadline to February 2026. As a result of the exemption, filings on initial Form SHO reports from institutional investment managers that meet or exceed certain specified thresholds will be due by February 17, 2026, for the January 2026 reporting period. The effective date for Rule 13f-2 and Form SHO was January 2, 2024, and the compliance date for such rule and form was January 2, 2025, with initial Form SHO filings originally due by February 14, 2025.
/jlne.ws/40Ucuh3
| | | | | | Technology | | | TT platform named Derivatives Trading System of the Year at FOW International Awards; Third consecutive win in category for Trading Technologies
Trading Technologies International
Trading Technologies International, Inc. (TT), a global capital markets technology platform services provider, has won the award for Derivatives Trading System of the Year for its TT platform at the FOW International Awards. The recognition, presented at a dinner ceremony in London last night, marked the firm's third consecutive win in the category at the awards.
/jlne.ws/3QhENRK
| | | | | | Strategy | | | Wall Street Fear Index Rises to End Another Dramatic Week for Markets
Barron's
The most widely followed gauge of market fear and uncertainty edged up Friday, but investors still appear to be shrugging off worries about retaliatory tariffs and sticky inflation.
The Cboe Volatility Index, which tracks S&P 500 options contracts and trades under the ticker VIX, climbed 1.7% to just over 15 in early trading. Any level below 20 is typically seen as a sign of relatively low volatility, so Friday's reading signals the market remains in a calm mood.
/jlne.ws/42YbbAq
Macro Hedge Fund With 76% Gain Says Market Is Mispricing US Rates; Magnitude of 2026 rate cuts underpriced, Kaifeng's Gao says
Bei Hu - Bloomberg
The market is underpricing the potential magnitude of US interest-rate cuts in 2026, said the co-manager of a macro hedge fund that gained 76% last year. Next year, President Donald Trump is expected to nominate a more dovish Federal Reserve chair, just as the economy softens on the back of a widening trade war, said Gao Bin of Kaifeng Investment Management, which oversees about $1.3 billion. Rate prospects this year are clouded by uncertainty about how much Trump would follow through on his tariff threats and the resulting inflation picture.
/jlne.ws/4hwNXWu
| | | | | | Education | | | Volatility Product Trading
tastylive (Video)
Nick Battista and Mikey Butler host "Options Trading Concepts Live," inviting YouTube viewers to engage with questions on strategies, trade ideas, and management. They discuss the market's minimal movement and upcoming President's Day market closure, highlighting meta and Apple's gains, and NVIDIA's rise. The hosts explore trade adjustments and strategies for various stocks, emphasizing trades with favorable extrinsic value. They advocate for maintaining portfolio delta, vega, and gamma awareness over precise theta targeting.
/jlne.ws/4hXx8nv
| | | | | | Miscellaneous | | | Elon Musk Questions Congress Members' Wealth: 'Where Did They Get All The Money?'
Chris Katje - Benzinga
Billionaire Elon Musk targeted members of Congress who enjoy rising wealth amounts while in office, which comes as retail traders place larger emphasis on politicians' stock and options trading activity. What Happened: Members of Congress can buy and sell stocks, options and cryptocurrency as long as they disclose the transactions in a timely manner. This activity has drawn increased scrutiny in recent years as trades made by members of Congress often appear to be conflicts of interest based on non-public knowledge and can sometimes be stocks related to government-funded contracts.
/jlne.ws/41bGEhb
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