| October 13, 2016 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Winner Takes It All in the World's Biggest Index Options Market
Santanu Chakraborty - Bloomberg
India's index options market, the biggest in the world, is a virtual monopoly. The National Stock Exchange of India Ltd. has a 99.6 percent share of trading in the derivatives. The 657 million index options contracts traded at NSE this year through August is higher than any other venue and the country's total outstrips any other nation, according to the World Federation of Exchanges.
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Mark on the market
RMA Securities Lending Conference
OCC chairman and CEO Craig Donohue reveals how the central clearer aims to evolve from an important market utility to a market influencer. OCC has made several senior appointments this year, including your decision to stay on. Should we expect more hires this year and how does this fit into OCC's wider strategy going forward?
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****SD: This is a link to the full PDF put out for the 33rd Annual Conference On Securities Lending. The OCC story starts on page 8.
Fed Minutes See Rate Rise 'Relatively Soon'
Binyamin Appelbaum - NY Times
The Federal Reserve expects to increase its benchmark interest rate "relatively soon" if the economy continues to advance at a reasonable pace, according to an account published Wednesday of the bank's most recent policy meeting. The account strengthened expectations that the Fed may raise rates at its final meeting of the year, in December. But it also underscored that a majority of Fed officials did not see sufficient economic evidence to warrant an increase right away. And some expressed doubt that the economy would be strong enough for the Fed to move this year.
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***SD: The incessant Fed tease continues. I imagine a kid being told to clean his room  "I am waiting for a point at which conditions indicate it is the proper environment to clean. The level of dirtiness does not indicate that I should proceed as of yet." Just take a cue from Nike and do it already. I bet Bo knows that.
Bullish October? Election and Earnings Surprises Could Lie in Store
Frederic Ruffy - The Ticker Tape
The month of October during an election year isn't always bullish for the stock market. In fact, according to the Stock Trader's Almanac, the average change in the S&P 500 is -0.7%. Perhaps election uncertainty serves to keep rally attempts in check? For whatever reason, equities often see lackluster action in the month before voters go to the polls. But this year, it's not just about the elections. Earnings could be an important force driving market volatility as the numbers unfold in the weeks ahead.
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Why China is not finished reining in this stock market
Barbara Kollmeyer - MarketWatch
It's been a while since China has tripped up stock markets, but that's what's mainly going on this morning. China's September trade report showed a massive 10% drop in exports, reviving the specter of a slowdown from the Middle Kingdom, as it reminded investors that global demand is still a fragile thing. It's just one month of data, of course, so it bears further watching. But investors  a little twitchy after those Federal Reserve minutes  were looking for a reason to sell. They appear to have found it in China.
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Top Yuan Forecaster Upbeat as Currency Sinks to Six-Year Low
Justina Lee and Elena Popina - Bloomberg
Yuan bears have little to celebrate, according to the currency's top forecaster. While the yuan's slump to a six-year low this week has fueled speculation of a faster depreciation, Landesbank Baden-Wuerttemberg predicts further losses will be limited to 0.3 percent this year and another 0.7 percent in 2017. The currency may even start to rebound toward the end of next year as inflows rise and companies taper foreign debt repayments, said Julian Trahorsch, an economist at the German bank, the most accurate forecaster of the yuan as ranked by Bloomberg.
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Pound's Plunge Squeezes U.K. Firms as Brexit Hedges Unravel
Thomas Seal and Eric Pfanner - Bloomberg
Sterling's volatility upends firms' hedging strategies; Costs rise for soap dishes, running shoes, Unilever's Marmite
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****SD: Hopefully, Marmite gets so expensive that it goes the way of the dodo.
Is A short Squeeze Coming In VOL ETPs?
ValueWalk
In this week's edition of the WOW we're covering volatility ETP's (Exchange Traded Products)
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| | | | | | Exchanges | | | IMF warns of Brexit impact on UK clearing
Julie Aelbrecht - Futures & Options World
UK-based Euro clearing may be forced to move to the continent
The International Monetary Fund has warned that the UK leaving the European Union could have a significant impact on the City's role as a Euro clearing hub. "UK clearing of OTC derivatives meets EU standards but the use of UK clearing by EU banks will be subject to negotiation, and if not fully recognised by the EU, some relocation of clearing activities is likely," the International Monetary Fund (IMF) said in its annual Global Financial Stability Report on Tuesday.
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Intercontinental Exchange Announces Approval of 5-for-1 Stock Split
Press Release
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that its board of directors, through a designated dividend committee, declared a five-for-one stock split of ICE's common stock in the form of a stock dividend. Stockholders of record as of the close of market on October 27, 2016 will receive four additional shares for each share of ICE common stock held on such record date. The new shares will be payable on November 3, 2016. ICE's common stock is expected to begin trading on a split-adjusted basis on November 4, 2016.
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Nadex Q3 2016: Interest Keeps Growing in Limited Risk Trading
Accesswire via Yahoo
Following the Trading Update for the quarter ending August 31, 2016 reported by parent company IG Group (LSE: IGG), Nadex reported over 37% growth in trade volume and over 53% growth in total trades of binary options during the third quarter of 2016 compared to Q3 2015.
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ICAP acquires Abide Financial amid NEX transition
Hayley McDowell - The Trade
CAP has announced its acquisition of regulatory reporting technology firm Abide Financial, as the group continues its transition to become NEX Group. Abide will become a subsidiary of ICAP's post-trade risk and information (PTRI) business with its CEO, Collin Coleman, reporting to ICAP's PTRI CEO, Jenny Knott.
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Best Derivatives Trading Platform: Eurex
Financial News
Eurex, owned by Frankfurt-headquartered exchange heavyweight Deutsche Börse, won the award for Best Derivatives Trading Platform for the second year running. One judge, who scored the company highly during the voting process, said: "Eurex is highly regarded for its technology, its willingness to back new initiatives, and also for keeping its members well abreast of regulatory changes."
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Exchange Group of the Year: Bats Global Markets
Financial News
Bats Global Markets has stayed true to its challenger ethos over the past year, launching innovative services, diversifying into other asset classes and keeping longer established rivals on their toes - all factors helping it to win FN's Exchange Group of the Year award for the second year in a row.
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| | | | | | Regulation & Enforcement | | | Rule on funds' derivatives use unlikely this year: U.S. SEC commissioner
Lisa Lambert and Trevor Hunnicutt - Reuters
The top U.S. securities regulator is unlikely to approve rules this year that would restrict fund managers' use of derivatives and require additional planning to prevent service disruptions, one of the agency's members said on Wednesday. Michael Piwowar, the sole Republican member of the Securities and Exchange Commission, told a conference at Georgetown University he did not foresee the regulator voting on the final rules for derivatives and transition planning before a change in the presidential administration after Nov. 8 elections.
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New bank capital rules 'several years away' in practice
Francesco Guarascio and Huw Jones - Reuters
New bank capital rules now being finalised by global regulators will not be implemented for several years, an official responsible for writing them said on Wednesday, seeking to soothe European concerns about their impact on struggling lenders.
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****SD: "We talkin' about practice?!" -Allen Iverson
Basel Committee Chief Says New Capital Rules Are on Track
Julia-Ambra Verlaine - WSJ
The head of the Basel Committee on Banking Supervision said Wednesday his organization won't yield to pressures from European lenders to water down proposed new standards which could increase capital requirements. William Coen, Secretary-General of the Swiss-based standards setter, spoke at the European Parliament on Wednesday and said that the committee would forge ahead with the controversial plans to revise postcrisis capital rules which are still under negotiation.
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'Flash-Crash' Trader Faces End of Road in U.K. Extradition Fight
Suzi Ring - Bloomberg
Navinder Singh Sarao hasn't ventured outside London for more than a year due to bail restrictions imposed after his arrest for spoofing markets. That could all change should his final appeal fail Friday, forcing his extradition to stand trial in the U.S.
jlne.ws/2e8uv7P
SEC Said to Demand That Cooperman Agree to Hedge Fund Suspension
Matt Robinson - Bloomberg
Wall Street's top cop demanded that a resolution of its insider-trading case against Leon Cooperman include the billionaire investor accepting a temporary suspension from the hedge fund industry, according to people familiar with the matter.
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Fiduciary rule will give investors a break
Jill Schlesinger - Chicago Tribune
Has the political season got you down? Here's an imperfect antidote to the vituperative presidential campaign scrum: Over the past month, large investment companies like Blackrock and Charles Schwab announced that they are cutting fees on some of their largest exchange traded funds (ETFs). (As a reminder, ETFs are listed on an exchange, can be traded intra-day like an individual stock and must be held in a brokerage account. Companies usually charge a nominal commission to execute either a buy or sell order for an ETF.)
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| | | | | | Technology | | | Bots and Bobs - Robo Trading and the GBP Flash Crash
Kris Longmore, Robot Wealth - TABB Forum
It was the FX market's turn for a bewildering flash crash last week, and once again the world is left wondering what happened. Here's why we shouldn't blame the robots, and what we should do next.
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Tiny Bank-Beating Trading Firm Doesn't Use Any Human Traders
John Detrixhe - Bloomberg
One of the world's fastest-growing trading shops doesn't have any traders. XTX Markets Ltd. has emerged as a foreign-exchange powerhouse, relying on programmers and mathematicians to fuel its rise into the global top five earlier this year. Now, after becoming a formidable player in currencies, XTX has its sights set on growing in stocks, commodities and bonds markets.
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| | | | | | Strategy | | | Trading volatility with options (VIDEO)
TradingFloor.com
Georgio Stoev, futures and listed options product manager at Saxo Markets, provides insights to his options trading strategy during the current and upcoming period of higher market volatility.
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| | | | | | Events | | | Five tips for getting the most out of FIA Expo
3Points Communications
This year, Chicago's FIA Expo is in mid-October rather than early November, which means it may have snuck up on you with its earlier-than-usual start. In preparation for next week, we've compiled a checklist that attendees can use to make sure they are ready for the futures industry's biggest event of the year.
/goo.gl/wF3qVq
****SD: See you all there!
| | | | | | Miscellaneous | | | The Oldest Map of New York Is Drawn on Goat Skin, Costs $10 Million
Bloomberg
On a Tuesday in mid-October, the most expensive map ever to hit the market was sitting on the floor of an empty office on Manhattan's Upper East Side. Daniel Crouch, the rare book and map dealer to whom it had been consigned, stood over it, beaming. "I've handled several [similar] maps in my life," said Crouch. "But never one so gleamingly brilliant as this."
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