| September 30, 2021 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | **** SC: In time for the 2021 United Nations Climate Change Conference, or COP26, which begins October 31 in Glasgow, ISDA today released a white paper on the "Role of Derivatives in Carbon Markets." Not surprisingly, the group takes a decidedly pro stance on traded carbon derivatives, including futures, options and swaps, which the authors of the paper say help companies subject to carbon compliance programs meet their obligations and manage risk in a cost-effective way. You can access it here.
| | | | | | Lead Stories | | | Will Oil Prices Soar to $200 a Barrel? This Options Trader Thinks So
Alex Longley - Bloomberg
Could the energy crunch get so bad that oil prices hit $200 a barrel? One options trader thinks so.
Brent $200 calls for December 2022, options contracts that would profit a buyer from a rally toward that level, traded 1,300 times on Wednesday. While the contracts don't expire until October next year, they could profit from any sharp spike in prices this winter or next summer.
/bloom.bg/3zTotMl
Meme traders see red as heavily-shorted stocks grow scarcer and old names fall
Thornton McEnery - MarketWatch
Investors trading meme stocks spent Wednesday looking at a lot of red.
The unofficial meme-stock index took a uniform pounding on Wednesday, with major names down significantly, and even a meme rotation into clean-energy names looked to slow down as retail investors found themselves playing an uneventful game of Whack-a-Mole trying to find heavily-shorted stocks to play for squeezes.
/on.mktw.net/3CXrptm
Whatever Happens to Evergrande, Nobody Wants to Short the Yuan
Brody Ford and George Lei - Bloomberg
The highly public unraveling of China Evergrande Group is shaking markets worldwide, but analysts are confident the nation's own currency will be spared.
The yuan has been the subject of almost no short recommendations. Even among bearish analysts, few suggest betting against it directly amid soaring trade surpluses, negative carry for short positions and potential intervention by the People's Bank in the case of Evergrande's collapse.
/bloom.bg/3F3OZGB
Stocks struggle to recover losses after inflation jitters
Naomi Rovnick, Nicholas Megaw, Hudson Lockett and Leo Lewis - Financial Times
Stocks on Wall Street struggled to claw back their losses on Wednesday after fears about prolonged inflation and rising interest rates prompted the worst day for US equity markets since May during the previous session.
The blue-chip S&P 500 share index rose 0.2 per cent, recouping only a small portion of the declines it tallied on Tuesday when the benchmark fell 2 per cent. The technology-focused Nasdaq slid a further 0.2 per cent following its 2.8 per cent decline the previous session.
/on.ft.com/3F7Kmvm
Powell Says Fed Faces 'Difficult Trade-Off' if Inflation Doesn't Moderate
'Our expectations is that inflation will come down,' central bank leader tells lawmakers
Kate Davidson and Nick Timiraos -- WSJ
Federal Reserve Chairman Jerome Powell told lawmakers Thursday that the central bank still expects a recent spell of high inflation to reverse but said it was difficult to pinpoint when that might happen. A surge in prices this year "is a function of supply-side bottlenecks over which we have no control," Mr. Powell said at a House Financial Services Committee hearing, where he appeared alongside Treasury Secretary Janet Yellen.
/on.wsj.com/3A0lQs6
Traders Take Aim at $40 U.S. Natural Gas in Bet on Supply Shock
Joe Carroll and David Marino - Bloomberg
The biggest rally in U.S. natural gas futures since the beginning of the century has some traders betting that prices will spike to an unheard-of $40 per million British thermal units.
Two contracts for March $40 European-style call options traded Monday and one traded on Tuesday, selling for as much as 10.5 cents. That $1,050 investment would only pay off if Henry Hub futures on the New York Mercantile Exchange rise by more than seven times the current March futures price by the time the option expires on Feb. 23.
/bloom.bg/2Y8A51o
The World Federation of Exchanges Publishes a Research Working Paper on the impact of different investor types on liquidity and price formation
WFE
The World Federation of Exchanges ("WFE"), the global industry group for CCPs and exchanges today published a Research Working Paper on the impact of different investor types on liquidity and price formation.
Using timestamped orders and trades data from the Stock Exchange of Thailand (SET), the WFE Research paper studies how different market participants - retail investors, domestic and foreign institutions - influence price formation for different liquidity levels. The paper finds that trading participants in the SET market contribute heterogeneously to price formation, and that liquidity affects the size, but not the relative importance, of their contribution to prices. In particular:
/bit.ly/3F9rg7Q
Have retail investors changed markets?
This time it is different!?
Nicolas Rabener - ETF Stream
During the 1954 recession in the US, Sir John Templeton wrote to his clients that "this time it's different" are the four most dangerous words in investing. A pedantic reader might comment that it is actually five words, but that is beside the point.
The current investing world is odd indeed and perhaps this time it is different: interest rates are zero, central banks manage stock markets, start-ups with unrealistic plans to make money are valued at billions, the market cap of cryptocurrencies has breached a trillion dollars, zombie companies like GameStop have been rejuvenated, and so on.
/bit.ly/3muIjcn
| | | | | | Exchanges | | | Cboe Global Markets Announces Date of Third-Quarter 2021 Earnings Release and Conference Call
Cboe - PRNewswire
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today said it will announce its financial results for the third quarter of 2021 before the market opens on Friday, October 29, 2021. A conference call with remarks by the company's senior management will begin at 7:30 a.m. Central Time (CT), 8:30 a.m. Eastern Time (ET).
/bit.ly/3uz6BFx
SGX wins two Exchange of the Year awards
SGX
Asia Risk and GlobalCapital awards underscore strength of client offering; SGX's innovation and product leadership cited
Singapore Exchange (SGX) has been awarded two more Exchange of the Year 2021 accolades, underscoring the strength of its client offering in helping market participants manage risk in Asia amid the upheaval in global markets.
/bit.ly/2ZJXXJ4
Global Derivatives Awards 2021 - European Derivatives Exchange of the Year: Eurex
Global Capital via Eurex
On a number of fronts, Eurex excelled in its support of, and offering to, the derivatives market in the past year. It demonstrated its strength as Europe's largest and one of the world's leading derivatives exchanges, and an ability to innovate and push forward new segments in risk transfer markets. It is for these reasons, together with an intimate understanding of its core market and ability to maintain service during periods of high volatility, that Eurex is GlobalCapital's European Derivatives Exchange of the Year.
/bit.ly/3A8keNj
MIAX Options Exchange - October 1, 2021 Non-Transaction Fee Changes
Mondovisione
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).
/bit.ly/39S5E1I
| | | | | | Regulation & Enforcement | | | CFTC charges 12 New York crypto options businesses with failing to register
The listed crypto options providers named by the CFTC include relatively unknown names such as Bitfxprofit, Star FX Pro, Smarter Signals and BinanceFx Trade.
Brian Quarmby - Cointelegraph
The Commodity Futures Trading Commission (CFTC) has charged 12 New York-based crypto options businesses with allegedly failing to register with the regulatory body.
In a Thursday press release, the CFTC outlined that it is charging 14 entities in total, with the 12 crypto-focused firms all on the hook for failing to register as futures commission merchants (FCMs). All of the firms were "allegedly based in New York." The other two companies have allegedly posted misleading information about their National Futures Association (NFA) membership and registration with the CFTC.
/bit.ly/3F39PWG
| | | | | | Technology | | | Belvedere Trading Selects Rival Systems for Real-Time Portfolio Margin and Risk Based Haircuts
Rival Systems
Rival Systems (Rival), an award-winning provider of trading and risk management software, today announced Belvedere Trading is leveraging Rival's enterprise risk platform for real-time Portfolio Margin and Risk Based Haircuts. Rival's fully hosted and managed solution provides a cost-effective way to monitor the firm's capital requirements across futures, equities, and options.
/bit.ly/3okxFr8
Euromoney TRADEDATA integrates EDI's DerivActions to launch cutting-edge futures and options corporate actions service; ViewXone, Euromoney TRADEDATA's online service, enhances reference data offering by integrating EDI's DerivActions feed
Exchange Data International
Exchange Data International (EDI) is pleased to partner with Euromoney TRADEDATA, and announce the integration of EDI's DerivActions feed for the futures and options industry.
/bit.ly/3F6ypG0
| | | | | | Strategy | | | Energy Is Rallying. How to Play It With Options.
Steven M. Sears - Barron's
The energy market may soon deliver a hard lesson to a world that has grown accustomed to having what it wants whenever it wants it, and almost instantaneously.
Demand seems to be exceeding supply, and that is creating imbalances in the oil and natural-gas markets. China's energy system is teetering on the edge of crisis. In the United Kingdom, some gas stations have run out of fuel due to labor issues.
/bit.ly/3kTuhRD
| | | | | | Education | | | APAC cross border trading: challenges and opportunities
FIA Webinar
October 7, 2021 - 9:30 a.m. - 11:00 a.m. SGT
Whether it's inter-regional or global, there are consistent dynamics which shape the exchange traded derivatives industry. In the Asia Pacific region, some have created opportunities amidst the current uncertain environment whilst others have posed major challenges. Coupled with the multijurisdictional and constant regulatory reforms, as well geopolitical issues, cross border trading is ever more complex. Is there light at the end of the tunnel? A broad spectrum of industry participants will discuss how they are adapting to this new environment in this informative webinar.
Register here: https://bit.ly/3D4YIuH
| | | | | | Miscellaneous | | | Derivatives Set for $15 Trillion Switch in Libor Test Run
William Shaw - Bloomberg
Global banks are about to get a comprehensive blueprint for how derivatives worth several hundred trillion dollars may be finally disentangled from the London Interbank Offered Rate.
/yhoo.it/3D1bF8S
The Pros and Cons of the New Alternative 'Buffer' ETFs
Lewis Braham - Barron's
Ever since the 2007-09 financial crisis, alternative exchange-traded funds have seemed like exotic failures. These ETFsâdesigned to hedge against market downturns or provide portfolio diversification by behaving differently from stocks and bondsâwere celebrated after the crash, then largely ignored by investors in the great bull market that followed.
/bit.ly/2YhXflI
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| | | | 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
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| | | Jeff Bergstrom
Editor
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