| September 29, 2021 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Volatility Market Lights Up With Hedging as S&P 500 Tumbles
Lu Wang and Vildana Hajric - Bloomberg
For the second time in two weeks, a selloff has sent the S&P 500 plummeting to chart levels that marked its floor for a decade. And once again there's evidence options traders were prepared for the swoon.
The Cboe Volatility Index, or VIX, posted an outsize move. Prices for bearish options rose. Data show a taste for derivative-borne speculation easing significantly. Taken together, the signals point to creeping bearishness at the market's edges. While hardly a vote of confidence in more equity gains, similar precautions put a brake on past routs.
/bloom.bg/3CX3qul
Retail Traders Stick to Their Dip-Buying Ways, But Fatigue Lurks
Bailey Lipschultz - Bloomberg
Retail investors bought into the biggest selloff of technology shares since May on Tuesday, targeting heavyweights like Apple Inc. and Microsoft Corp.
Day traders snatched up $1.9 billion worth of equities Tuesday, among the five-largest net buying days since the pandemic began, according to data compiled by Vanda Securities Pte. Individual investors flocked to tech heavyweights that have been hit the hardest, while selling the rallies in reopening industries like airlines, the data show.
/bloom.bg/2YepmSR
3 Reasons the Stock Market Will Keep Falling
Jacob Sonenshine - Barron's
The stock market is recovering from an awful Tuesday, but there is probably more pain ahead. Forecasts for corporate profits are likely to fall, while bond yields may well increase.
All that means the market looks calmer than it probably should.
/bit.ly/3zSo8tp
Pound's Worst Day in a Year Revives Emerging-Market Parallels
Greg Ritchie - Bloomberg
RBC sees sterling's gyrations more appropriate to EM than DM; Comparisons continue to pop up after Brexit spurred volatility
Sterling's worst session in a year has analysts once again comparing its gyrations to currencies like the Mexican peso or South African rand, rather than the dollar or euro.
/bloom.bg/3ukUjAF
| | | | | | Exchanges | | | MIAX Options Exchange - October 1, 2021 Non-Transaction Fee Changes
FEE CHANGE ALERT
Effective October 1, 2021, MIAX Options will reinstate fees for its Complex Top of Market ("cToM") data feed and begin to charge a fee of $1,250 per month for internal distribution and $1,750 per month for external distribution (pending re-filing with the SEC).
An updated October 1, 2021 Fee Alert and a new MIAX Options Fee Schedule will be posted on the MIAX website at www.miaxoptions.com/fees.
/bit.ly/2ZHSoe9
Expanded Opening and Intra-day Quote Width Requirements and MIAX Order Monitor Settings for Certain Symbols Trading on MIAX Options and MIAX Emerald Through Friday, December 31, 2021
TRADING ALERT, REGULATORY ALERT
MIAX Options and MIAX Emerald have expanded the maximum valid bid/ask differential for Market Makers for certain symbols traded on the Exchanges. The expanded bid/ask differentials will be in effect through Friday, December 31, 2021.
/bit.ly/39OsjvH
| | | | | | Regulation & Enforcement | | | FIA releases principles for cross-border regulation
FIA
FIA today released a policy paper outlining seven principles to guide the regulation of cross-border activity in the derivatives markets. FIA is issuing the paper to address the threat of market fragmentation due to conflicts, inconsistencies, and duplication in cross-border regulation. Policymakers and regulators in many parts of the world are re-examining their approaches to cross-border activity, and some are favoring more insulated national policies that favor direct oversight of domestic and foreign entities. As FIA points out in the paper, these national approaches do not defer to home country regulation, and the resulting overlap of regulation on cross-border activity will lead to less efficient markets and higher costs for end-users.
/bit.ly/3F1oOAz
Libor Deadline Extension Would Be 'Huge Relief' for Markets
William Shaw - Bloomberg
Banks in the U.K. and Japan appear to have won critical breathing space just three months before the London interbank offered rate is retired in those markets.
/bloom.bg/2Y2KgVf
| | | | | | Strategy | | | Future Returns: Ignoring Market Noise for the Long-Term
Abby Schultz - Barron's
When it comes to volatility in the stock market, long-term investors are advised to ignore the drama.
Simply, short-term market reactionsâjustified or notâare just that, short-term. As Deepak Puri, Deutsche Wealth Management's chief investment officer for the Americas notes, many of the issues causing the market's recent swingsâfrom the Federal Reserve's decision to scale back economic stimulus, to concerns over whether Congress will lift the debt ceiling, to worries over China's regulatory crackdown on a range of companiesâare finite, and unlikely to have a long-term effect on the outlook for stocks.
/bit.ly/3meaSun
NDX Option Traders Taking Advantage Of Last Week's Volatility
Russell Rhoads, CFA - Nasdaq
Last week the U.S. equity markets started out under pressure, but managed to rebound by week's end. When excess volatility hits the marketplace I like to go digging through block trades, and this exercise in the NDX arena yielded several short-term option trades that benefitted from the brief sell-off and subsequent recovery. The chart below is a reminder of the price action along with numbers showing when each of the three trades I will discuss in this article were executed.
/bit.ly/3mbMqtn
Are You Thinking About Short Selling? Think Again.
The opportunity appears ripe, but the potential hazards are even greater.
Nir Kaissar - Bloomberg Opinion
Go ahead and fear a market crash if you want. Just don't bet on it.
It's a heady time for U.S. markets. Every asset seems more richly valued than ever, or close to it, from stocks and bonds to real estate and private equity. Even more astonishing are the big and small fortunes people are minting on meme stocks, cryptocurrencies and non-fungible tokens.
/bloom.bg/3AODiBb
| | | | | | Events | | | Practical advice for responding to investigations in the commodities/derivatives space
Part of the L&C webinar series
FIA
30 September 2021 ⢠10:00 AM - 11:00 AM ET
A senior prosecutor from the DOJ's Market Integrity and Major Frauds unit and a senior enforcement attorney from the CFTC will join a panel of Clifford Chance attorneys to discuss and analyze recent cases and various hypothetical scenarios of investigation to assist in-house counsel in identifying potential pitfalls that can lead to charges. The hypotheticals will focus on the factors that may lead an exchange investigation to become a CFTC enforcement matter, and the factors that may lead the DOJ to bring criminal charges.
/bit.ly/2Y1ZtFC
| | | | | | Miscellaneous | | | Democrats seek to avoid shutdown while they scramble on debt ceiling
Lauren Fedor - Financial Times
The US Senate was poised to vote on a measure to avoid a government shutdown on Wednesday, while Democrats scrambled to find a way to raise the US debt ceiling and avert what a chorus of executives and policymakers warn would be a "catastrophic" default in less than three weeks.
Democrats had originally tried to push through a two-pronged bill that would both fund the federal government and raise the debt ceiling.
/on.ft.com/39LcJkj
Eightcap to allow retail clients to gain access to over 250 crypto derivatives
Hassan Maishera - CoinList
Leading CFD broker Eightcap has launched more than 250 cryptocurrency derivatives, specifically targeting retail investors.
Eightcap, an award-winning CFD broker, has announced the launch of more than 250 cryptocurrency derivative products. This latest development makes the broker the largest cryptocurrency offering available for retail clients.
/bit.ly/3zVy4SV
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| | | Jeff Bergstrom
Editor
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