| August 10, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
|
| | | | Lead Stories | | | Trading in risky '0DTE' stock options hits record and could spark a stock-market selloff, strategists say
Joseph Adinolfi - MarketWatch
Trading in stock options with extremely limited lifespans is surging to record highs just as the 2023 U.S. stock-market rally is showing signs of stalling.
While in the past this this trade has been associated with subdued volatility in markets, some option-market experts fear the resurgence could set the stage for a selloff in the days and weeks ahead, depending on the reaction to major market-moving news like Thursday's U.S. consumer-price index report.
/jlne.ws/3KAWwBd
Moody's warning on US banks a wake-up call for sanguine investors
Saqib Iqbal Ahmed and Nupur Anand - Reuters via Yahoo Finance
The slide in U.S. bank stocks this week appeared to catch traders in the options market by surprise, data shows, raising questions over whether bank investors have become a little too comfortable with the sector that only months ago was in crisis.
U.S. bank shares dropped on Tuesday after ratings agency Moody's downgraded credit ratings of several U.S. regional lenders and placed some banking giants on review for potential downgrade.
/jlne.ws/453aHas
A Week of 1% Moves on the S&P 500 Could Trigger Forced Selling
Jan-Patrick Barnert and Sagarika Jaisinghani - Bloomberg
It could take just a 1% move in the S&P 500 â up or down â every day for a week for the rally in US stocks to come under significant pressure.
That's according to data from Nomura cross-asset strategist Charlie McElligott, who said the exposure of volatility-control funds to equities was so high that the risk of a selloff had surged following calm trading in recent months.
/jlne.ws/3OP78Pw
Markets may be on a tear this year, but the economy is under the most pressure since 2008 and could still easily fall into recession, research firm says
Jennifer Sor - Business Insider
The US is still on the precipice of a recession despite stocks rallying this year amid forecasts of a soft landing, and according to a note from Capital Economics on Thursday, the economy is under the most pressure since the Great Financial Crisis in 2008.
The research firm pointed to extremely tight financial conditions after the Federal Reserve aggressively hiked interest rates over the past year, raising its target interest rate to its highest range since 2001.
/jlne.ws/45pl08o
Daly Says Fed Has 'More Work to Do' to Get Inflation to Goal
Laura Curtis - Bloomberg
Federal Reserve Bank of San Francisco President Mary Daly said the US central bank has more work to do to control inflation even as data for July showed modest price increases.
Consumer-price data out earlier Thursday "came in largely as expected, and that is good news," Daly, who doesn't vote on monetary policy this year, said in an interview on Yahoo! Finance. "It is not a data point that says victory is ours. There's still more work to do. And the Fed is fully committed to resolutely bringing inflation back down to its 2% target."
/jlne.ws/3s825Rr
Boaz Weinstein's $1.3bn flagship fund stung by stock rally; Setback comes after Saba Capital founder last year predicted a global bear market
Costas Mourselas - Financial Times
Hedge fund manager Boaz Weinstein's flagship investment strategy has fallen sharply this year amid a broad market rally after he predicted late last year that global stocks were heading for a bear market. The $1.3bn fund - which bets long and short in equity and credit markets - run by Weinstein's New York-based Saba Capital has lost 7.7 per cent so far in 2023, according to a letter to investors seen by the Financial Times.
/jlne.ws/3s5whwi
ETFs evolve in the active investing space
David Stevenson - Financial Times
Not everything in life is binary. That's not a mantra from the culture wars but a statement of fact from the front line of the key struggle in the world of investing: the battle between passive and active funds.
Most passive funds are structured as exchange traded funds (ETFs) but there's also a growing cohort of so-called "active ETFs".
/jlne.ws/3YvRawF
| | | | | | Exchanges | | | U.S. Equities Trading Venues: A Closer Look
Cboe
The U.S. off-exchange equities volume growth in recent years has fostered new competitive dynamics across the market. Cboe's North American Execution Consulting team previously explored this and highlighted the functionality and features of different execution venue types and the increase in trading reported to the Trade Reporting Facilities (TRF). In our latest analysis, we're providing a refresher on these topics and more, along with taking a closer look at overall market trends both on and off-exchange.
/jlne.ws/3ORPv1y
FX clearing volumes on the up despite a lack of clearing mandates; A quarter of derivatives traders and portfolio managers on the buy-side want FX options to have increased clearing availability over the next two years, report finds.
Claudia Preece - The Trade
The fact that regulators have yet to make clearing a requirement for FX has been a principal reason for its lack of adoption thus far, however volumes are on the rise despite this according to a report from Coalition Greenwich. "FX clearing opportunities are expanding, interest rates have gone up, the market structure is evolving, and the cost of capital is rising-all tailwinds for FX clearing growth," said Coalition Greenwich.
/jlne.ws/44UaaaJ
Cboe Announces Winners of the Options Institute MSCI Inflation Research Grant
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced Dr. Ali Nejadmalayeri, Professor of Finance at the University of Wyoming College of Business, and William Campbell, Lecturer in Finance at the Wilbur O. and Ann Powers College of Business at Clemson University, as the winners of the Options Institute MSCI Inflation Research Grant, which is focused on advancing understanding of inflation and its measurable impact on the markets.
/jlne.ws/45pmuzu
| | | | | | Strategy | | | Opinion: Market bears are on the prowl and stocks are in danger
Lawrence G. McMillan - MarketWatch
The stock market, as measured by the S&P 500 Index SPX, has continued to decline ever since Fitch Ratings downgraded U.S. credit. The decline so far has been steady, but orderly. Now, there is a downtrend line on the SPX chart, beginning at the resistance point of the recent highs near 4600. The next support level is 4440, which would close several gaps on the SPX chart and would potentially reach the target for the McMillan Volatility Band (MVB) sell signal. A crucial support level is at 4330 â one that was successfully tested (and held) back in June. A decline below that would change the nature of the SPX chart from "bullish" to "bearish."
/jlne.ws/4510ZW3
CPI Inflation Data Hits Thursday: 5 ETFs With Potential For Wild Market Moves
Benzinga via Markets Insider
The Bureau of Labor Statistics' long-awaited July Consumer Price Index (CPI) data is scheduled to be released on Thursday at 8:30 a.m., ahead of the opening bell.
This critical economic data will have a significant impact on market expectations for future Fed rate hikes. Therefore, market fluctuations could be anticipated if inflation data surprises expectations.
/jlne.ws/3qhfLsM
Kenvue Options Moving
Cboe (Video)
In #Vol411, Scott Bauer @cboesib covers $SPX implied volatility, a large $VIX Nov options straddle and $KVUE #trading activity in the wake of its announced inclusion in the S&P 500.
/jlne.ws/45oupxe
| | | | | | Education | | | Harnessing the potential of currency options: A comprehensive guide
Abhishek Goenka - The Economics Times
In the world of international trade and finance, currency options play a vital role in managing risks and optimizing financial strategies for both exporters and importers.
Despite their potential benefits, many individuals remain hesitant to explore this powerful financial tool. In this blog, we aim to address common concerns and shed light on the advantages of using currency options in today's dynamic global market.
/jlne.ws/45eHn0m
| | | | | | Miscellaneous | | | 'It's Hard to Be an Activist These Days': Gadfly Investors Trail Stock-Market Returns
Lauren Thomas - WSJ
Activist hedge funds are clawing back their returns after a tough 2022, but they're still trailing the stock market.
These so-called activist shareholders have seen their investments climb about 14% through July, according to HFR, a hedge-fund data tracker. That trails the S&P 500's gains of about 20% through the same time period. But it's far better than 2022, when activists as a unit were down more than 16% for the full year, per HFR data.
/jlne.ws/453h3GS
Morgan Stanley Hopes for Drama-Free Handoff In Wall Street's Hottest CEO Race
Sridhar Natarajan - Bloomberg
As Morgan Stanley's James Gorman considers who to put forth to succeed him as CEO, he's unleashing a summer of speculation inside the bank.
Executives bumping into him on weekends try to tease out which way he's leaning. Colleagues spend idle moments trading theories. And some have given the boss unsolicited advice, hoping to tip the scales toward their favorite â Ted Pick, Andy Saperstein or Dan Simkowitz.
/jlne.ws/44k0YeR
| | | | | | | | | JLN Options is sponsored by: | | | | | | | | | | | | | | | | | | | |
|
|
| | | |
| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
| | | Asma Awass
Intern |
|
|
Disclaimer: All John Lothian Newsletters, JohnLothianNews.com, MarketsWiki.com and MarketsReformWiki.com are products of John Lothian News, a division of John J. Lothian & Company, Inc. The opinions expressed in all John J. Lothian & Company, Inc. publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers. Futures and options trading involve risk. Past results are no indication of future performance. Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any website or newsletter content.
© 2023 John J. Lothian & Company, Inc. All Rights Reserved. |
|
|
