| | | | | | | | December 19, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Wall Street's Next Test After Fed: $6.5 Trillion 'Triple-Witching'; Index, single-stock and ETF options to expire on Friday; Expiry follows Fed rate cut, coincides with index rebalance
Jess Menton - Bloomberg
As Wall Street traders come to grips with the Federal Reserve's plans to slow the pace of interest-rate cuts, Friday's US options expiration that has historically stoked turbulence offers a final hurdle to end-of-year calm.
The quarterly "triple-witching" will see some $6.5 trillion worth of options tied to individual stocks, indexes and exchange-traded funds fall off the board - this year's largest and among the biggest on record, though still slightly smaller than a year ago, according to an estimate from derivatives analytical firm Asym 500.
/jlne.ws/49OBWbN
Options Market Charts Show Rush for Protection as Stocks Tumble; US stocks slump after Fed rate decision, policy path forecast; Volatility and bearish skew increase across benchmarks
David Marino - Bloomberg
As the smoke clears after the worst S&P 500 reaction to a Federal Reserve meeting in years, charts of equity options markets show a sudden shift in sentiment and positioning as the equity benchmark fell almost 3%.
Stocks sold off sharply late in the session after Fed Chair Jerome Powell indicated that the central bank will likely put further reductions on hold while inflation stays above its 2% target.
/jlne.ws/41HZeOM
VIX's Second-Largest Spike in History Indicates a Local Bottom for Bitcoin: Van Straten
CoinDesk via Markets Insider
Wednesday, Dec. 18, will go down in history as a day of market panic triggered by the 25 basis point Fed rate cut and Chair Jerome Powell's hawkish outlook.
Bitcoin (BTC) briefly tumbled below $100,000; U.S. equities dropped around 3%, while the dollar index (DXY) index soared to a two-year high of 108, which continues to put pressure on currencies worldwide.
/jlne.ws/3VLEl16
Wall Street Fear Index Dives as Fed Worries Ease
George Glover - Barron's
The market's best-known fear gauge was sliding on Thursday, signaling that the previous session's big selloff isn't rattling investors too much.
The Cboe Volatility Index, which trades under the ticker VIX and tracks S&P 500 options contracts, dropped 25% to about 21 in early trading. Any reading of above 20 is seen as a sign of heightened uncertainty.
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Europe's STOXX 600 clocks worst day in more than a month after Fed's hawkish signal
Sruthi Shankar and Shashwat Chauhan - Reuters
European stocks fell on Thursday, with the benchmark STOXX recording its biggest single-day drop since early November as investors fled riskier assets after the U.S. Federal Reserve signalled a slower pace of interest rate cuts next year.
The pan-European STOXX 600 index (.STOXX), opens new tab closed 1.5% lower, hitting a three-week low, with all the major sub-sectors in the red.
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Volatility Futures Show Equities Fear Limited to Near Term
Jan-Patrick Barnert and Christian Dass - Bloomberg
The Federal Reserve's hawkish signaling on Wednesday sent US stocks tumbling and drove a key index of volatility to the highest level since August, but markets are indicating that concern may be limited to the near-term.
The Cboe Volatility Index spiked on Wednesday as the market's so-called fear gauge reflected the souring in risk sentiment that followed the Federal Reserve's decision. The index rose to 28 points on Wednesday from Tuesday's close of about 16.
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Dow Tanks as Powell Sends Shockwaves. This Is No Time To Panic.; Investors should brace for more declines as the market keeps flushing out excesses.
Daren Fonda - Barron's
So much for a Santa rally. The Fed sent shock waves through markets on Wednesday with a sobering outlook for rates and inflation in 2025. While we may be at the start of the correction, this is no time to panic.
Stocks and bonds tanked after Federal Reserve Chair Jerome Powell delivered a message nobody wanted to hear: Inflation is moving sideways and investors should only expect two more quarter-point cuts in 2025, a letdown from previous forecasts for deeper cuts and more progress on inflation.
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Why currency volatility could be the market's 'Achilles heel' in 2025
Filip De Mott - Markets Insider
Investors may be underestimating the threat to the bull rally posed by wild moves in the foreign exchange market.
KKR wrote in its 2025 outlook this week that currency swings will become the market's "Achilles' heel" next year.
/jlne.ws/3P2njbx
Korea Said to Fine Barclays, Citi for Naked Short Selling
John Cheng and Youkyung Lee - Bloomberg
South Korea has fined Barclays Plc and Citigroup Inc. for naked short selling, according to people familiar with the matter, as the nation ramps up its fight against such illegal trading practices. Barclays and Citi were fined 13.7 billion won ($9.5 million) and 4.7 billion won ($3.2 million), respectively, by the Securities and Futures Commission, said three people, who asked not to be identified discussing internal matters.
/jlne.ws/4gjAQYb
Fed Drops a Lump of Coal in Trump Market's Christmas; Powell rebuffs notion that tariffs weighed on calculations for fewer cuts, but a showdown may be looming.
John Authers - Bloomberg (Opinion)
Oh Say Can You FOMC!
Every so often, things happen just as expected. That's what happened Wednesday when the Federal Open Market Committee announced their widely telegraphed and oxymoronic "hawkish cut." Rates came down, and guidance strongly suggested that there might not be too many more cuts to come.
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| | | | | | Exchanges | | | Best Options Trading Platforms For December 2024
Steela Osoba - Investopedia
The best options trading platforms must offer robust tools, including comprehensive charting tools, clear profit and loss calculators, good trading execution, excellent analytical and research materials, a good user interface, and much more.
Investopedia's subject matter experts spent hundreds of hours researching and analyzing online broker platforms offering options trading. They used live broker accounts to assess and compare the different offerings from online brokers to determine the best options trading platforms for December 2024. Our analysis led us to select tastytrade as the best overall online brokerage for options trading.
/jlne.ws/3P2EOsj
ANALYSIS: LCH SA plans push into US credit derivatives clearing - CEO
FOW
Corentine Poilvet-Clediere, the chief executive officer of LCH SA, has said the Paris-based clearing house is moving aggressively into US credit derivatives, taking the LSE Group-owned service into its main rival's backyard.
CDSClear, the credit derivatives clearing house operated by LCH SA, has been running for nearly 15 years, having emerged to support the clearing of credit default swaps (CDS) mandated after the collapse of Lehman Brothers.
/jlne.ws/4gI5Lgv
Cboe Data Vantage: Data, Tools and Access to Navigate Global Markets with Confidence
Adam Inzirillo - Cboe
All,
I hope you are enjoying the holiday season and looking forward to the new year. As 2024 comes to a close, I am reflecting on the year, the accomplishments of our team and thinking about what's ahead in 2025.
2024 was a year of alignment and optimization for the Cboe Data and Access Solutions business. Last year when I stepped into my role leading Data and Access Solutions, I was excited to broaden my understanding of the team and learn how we could harness our strengths to grow the business globally. After collaborating internally, connecting with our customers and evaluating the market landscape, we have developed a streamlined vision for the business with our customers at the forefront.
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| | | | | | Regulation & Enforcement | | | The CFTC's Office of Customer Education and Outreach has issued a new advisory encouraging Americans to prioritize scam awareness as a New Year's resolution for 2025. Titled Avoiding Fraud May be Your Best Resolution, the advisory highlights the rising threat of online investment scams that exploit trust through fake profiles, testimonials, and trading platforms, stealing billions annually. It emphasizes three key resolutions to protect against fraud. First, individuals should be cautious about trusting online contacts and limit exposure to suspicious activities on social media. Second, investing time in learning about trading risks and relying on trusted sources is essential before committing any funds. Third, verifying the registration of financial professionals and promptly reporting suspicious activity are crucial steps to safeguard finances. The advisory underscores vigilance and education as vital tools for preventing financial loss, with resources for fraud reporting and educational materials available at www.cftc.gov.
North Korean-affiliated hackers stole a record $1.34 billion in cryptocurrency in 2024, accounting for two-thirds of global crypto thefts, according to Chainalysis, the Financial Times reported. These funds, stolen across 47 incidents, reportedly help fund Pyongyang's missile and nuclear programs. One major heist involved the theft of 4,500 bitcoin worth $305 million from Japan's DMM Bitcoin exchange. Despite a 21% rise in global crypto thefts to $2.2 billion, North Korea's activity slowed after a strategic partnership with Russia in June, as increased support from Russia potentially reduced its reliance on cybercrime.
The UK Financial Conduct Authority (FCA) has announced plans to overhaul EU-inherited disclosure rules for investment products, aiming to simplify and make them more flexible, the Financial Times reported. The current "overly prescriptive" regime will be replaced with a framework focused on providing clear, accurate, and comparable information. This change, welcomed by industry groups, seeks to address investor confusion and improve decision-making. The new rules will cover Consumer Composite Investments, impacting 12.6 million UK investors, and represent the UK's biggest regulatory divergence from the EU since Brexit. Feedback is invited until March 2025, with final rules expected later in the year. ~JJL
| | | | | | Strategy | | | VIX's Second-Largest Spike in History Indicates a Local Bottom for Bitcoin: Van Straten; The VIX jumped 74% yesterday after a 25bps rate cut and a hawkish outlook from Fed Chair James Van Straten - CoinDesk
Wednesday, Dec. 18, will go down in history as a day of market panic triggered by the 25 basis point Fed rate cut and Chair Jerome Powell's hawkish outlook.
Bitcoin (BTC) briefly tumbled below $100,000; U.S. equities dropped around 3%, while the dollar index (DXY) index soared to a two-year high of 108, which continues to put pressure on currencies worldwide.
/jlne.ws/49MdXtQ
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| | | Jeff Bergstrom
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