| August 18, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
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| | | | | | Lead Stories | | | U.S. retail traders pile back into options as meme-stock mania flares
Saqib Iqbal Ahmed - Reuters
Speculative options trading is on the rise again among individual investors alongside a rally in so-called meme stocks, reviving a trend that swept Wall Street last year but faded as markets turned volatile in 2022.
Trading in single stock options - a popular vehicle for retail investors looking to place leveraged bets in hopes of outsized gains - has shot higher in recent weeks, with 10-day average daily trading volume at a more-than six-month high of nearly 25 million contracts, Trade Alert data showed.
/jlne.ws/3AvMyMG
Bed Bath & Beyond's 492% Stock Rally Is Supercharged by Retail Traders (BBBY)
Bailey Lipschultz - Bloomberg
Bed Bath & Beyond Inc.'s spectacular rally is drawing in a record hoard of cash from retail investors, who are pumping their bets on popular social media websites and trader chatrooms.
Retail traders bought an all-time high of $73.2 million of the stock on Tuesday, bringing their total net purchases in three weeks to $171.4 million, according to data compiled by Vanda Research. What's more, the most actively traded derivative for the stock is betting on it to nearly double from Wednesday's close to $45 by the end of the week, Bloomberg data show.
/jlne.ws/3c7wCab
University student makes $110mn trading meme stock favourite Bed Bath & Beyond
Antoine Gara and Madison Darbyshire - Financial Times
A 20-year-old university student has made a roughly $110mn gain by selling a stake in struggling retailer Bed Bath & Beyond, after its stock price soared during a month of frenzied trading reminiscent of last year's meme stock boom.
Jake Freeman, an applied mathematics and economics major at the University of Southern California, acquired nearly 5mn shares in Bed Bath & Beyond in July, according to regulatory filings, after dismal earnings and the ousting of its chief executive sent its stock price plummeting.
/jlne.ws/3K1KsHE
Did the stock market 'misinterpret' Fed again? What strategists say about the reaction to the July minutes
Isabel Wang - MarketWatch
Stock-market participants were too quick to price in a "less hawkish" U.S. monetary policy outlook, based on the minutes, published Wednesday, of the Federal Reserve's meeting in July, at which policy makers hiked the benchmark interest rate by 75 basis points, some analysts argue.
U.S. stocks struggled to find direction on Thursday morning. The S&P 500 SPX was down 1 point, or less than 0.1%, to trade at 4,273. The Dow Jones Industrial Average DJIA fell 80 points, or 0.2%, to 33,900, after declining 171.69 points on Wednesday. The Nasdaq Composite COMP rose 11 points, or 0.1%, to 12,951.
/jlne.ws/3AFVe3v
| | | | | | Exchanges | | | Special Executive Report; Initial Listing of Options on Ether Futures
CME Group
Effective Sunday, September 11, 2022, for trade date Monday, September 12, 2022, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. ("CME" or "Exchange") will list Options on Ether Futures (the "Contract") as noted in the table below for trading on the CME Globex electronic trading platform ("CME Globex") and for submission for clearing via CME ClearPort.
/bit.ly/3QL9ZHu
Eurex KOSPI derivatives record volumes: Over 3 million Weekly Options traded since launch
Eurex
In H1 2022, the total Eurex/KRX Link volume surged 160% YoY with close to 20 million contracts. More than three million KOSPI Weekly Options contracts were traded within the first four months, with a monthly ADV of 83K in June; Night/Day ratio achieved a record high of 29.1% on 11 August 2022. Amidst persistent inflation and a strong USD, trading activity in the USDKRW Futures grew 81% YoY to a 2022 ADV of 2.8K. Mini-KOSPI Futures trading volume continued to grow, with over 8.7K contracts traded daily in 2022 and the Night/Day ratio increased 3.1 percentage points to hit 7.9%; It also achieved record high trading activity during its May expiration, with over 22K contracts traded in a single night. KOSPI 200 Futures have shown consistent growth, with monthly ADV rising steadily throughout 2022. In June 2022, it reached a monthly ADV of 15.8K, an increase of 403% as compared to June 2021.
/bit.ly/3K0Rxs9
SGX posts record revenue, profit inches up on derivatives boost
Harish Sridharan and Indranil Sarkar - Reuters
Singapore Exchange Ltd (SGXL.SI) said on Thursday it posted a marginally higher adjusted profit and record revenues, helped by the bourse operator's push towards its derivatives product offerings amid a weak securities market.
Higher derivatives volumes for equities, currencies and commodities helped offset a weaker showing from cash equities and treasuries.
/jlne.ws/3K7KrlK
| | | | | | Regulation & Enforcement | | | Calls for SEC probe into Ryan Cohen mount after potential pump-and-dump in Bed Bath & Beyond shares
Christiaan Hetzner - Fortune
Did the Pied Piper of meme stock investments lead his followers to their impending financial demise?
Some investors smell a rat and are calling for the Securities and Exchange Commission's Gary Gensler to investigate whether activist investor Ryan Cohen may have manipulated markets with his trades in Bed, Bath & Beyond, known by its BBBY ticker symbol.
/jlne.ws/3ppUPf0
| | | | | | Technology | | | eToro to Acquire Gatsby for $50M to Extend Option Trading to the US
Solomon Oladipupo - Finance Magnates
eToro, an Israeli multinational social investment and trading network, has announced its plans to acquire fintech startup Gatsby, a commission-free options and stock trading firm. Gatsby was co-founded in 2018 by Jeff Myers and Ryan Belanger-Saleh and is targeted at younger retail investors.
/jlne.ws/3K5078Z
| | | | | | Strategy | | | Private Equity Just Notched a Big Tax Victory. How to Play It.
Steven M. Sears - Barron's
Bull and bear markets come and go, but special tax treatment for hedge funds and private-equity firms lives forever. The ability of the carried-interest tax treatment to survive political attacks, and emerge even stronger, deserves serious respect.
Running companies arguably pales in comparison to the executive skills used to save preferential tax treatment for millionaires and billionaires at a time when Congress is controlled by Democrats who are facing a high-stakes election cycle. It was expected to get roughed up, if not eliminated, during recent legislative negotiations over the Inflation Reduction Act.
/jlne.ws/3SZVBNj
Traders Stick to Bullish Bets on Bed Bath & Beyond
Gunjan Banerji - WSJ
The sharp drop in Bed Bath & Beyond Inc. stock isn't scaring traders away from bullish options bets.
One of the most popular options contracts on the retailer in early trading Thursday was a call option exercisable if the shares jump to $80. Other active options were calls exercisable at $20 or $45, according to Trade Alert data. Shares recently traded at around $18.
/jlne.ws/3ppUp8q
Now that the S&P 500 is looking overbought, watch what happens to this downtrend line that defines the bear market
Lawrence G. McMillan - MarketWatch
The S&P 500 index has extended its gains, as we expected after last week's breakout over resistance at 4170.
The target was the declining 200-day moving average, which is currently at about 4325. The S&P SPX, 0.22% did "touch" that 200-day MA this week. Furthermore, the downtrend line that defines this bear market (blue line on the accompanying chart), is also in that same area.
/jlne.ws/3QR1tXh
| | | | | | Miscellaneous | | | Roblox Short Sellers Retreat After 100% Stock Run
Subrat Patnaik - Bloomberg
The stunning rally in Roblox Corp. has forced short sellers to pull back as upbeat investors pile into its stock amid an uptick in users of its video-game platform.
Roblox has almost doubled since mid-May, snapping a six-month losing streak. That's fueled a retreat by bears who had bet against the stock. Shorts have been reducing their Roblox positions recently, buying 876,000 shares, worth $42 million, over the past 30 days, according to S3 Partners.
/jlne.ws/3zYDxdK
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