| May 06, 2019 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
|
| | | | Observations & Insight | | | Double Jeopardy, Sort Of - U.S. v Thakkar
Thom Thompson - John Lothian News
As just about everyone who reads this newsletter knows, the criminal case brought by the U.S. Department of Justice against Jitesh Thakkar dissolved last month when the judge dismissed the conspiracy to spoof charge and the jury split (10-2 for acquittal) on the two remaining spoofing charges. The presiding judge had called the DOJ's case "thin." A couple of weeks later the DOJ declined to re-try him on the two spoofing counts in the original indictment. You would think this whole, fruitless mess has been put to rest, that Thakkar could return to his business.
/jlne.ws/2PNrjx2
++++
Aggressive Government Positions Expand Liability for Non-Traders
Renato Mariotti and Holly Campbell via John Lothian News
The recent case of United States v. Jitesh Thakkar demonstrated extraordinary government overreach that could result in a non-trader being liable for millions of dollars in trading losses even though the non-trader had no knowledge of the trading activity.
/jlne.ws/2H3NsED
****The above was sent to John Lothian News from Renato Mariotti, the attorney who defended Jitesh Thakkar, and Holly Campbell, who assisted with the defense, both of the law firm Thompson Coburn LLP.
| | | | | | Lead Stories | | | With Two Tweets, Trump Shatters Historic Calm in Global Markets
Joanna Ossinger and Michael Patterson - Bloomberg (SUBSCRIPTION)
Renewed threat of import tariffs roils stocks, currencies; China's stocks tumble along with yuan, while VIX skyrockets
In the end, all it took was two tweets from Donald Trump. After weeks of warnings from many on Wall Street that price swings across global markets were too subdued, the American president's threat to boost tariffs on China sent volatility soaring Monday. The VIX Index jumped 43 percent, the most since October -- the start of a horrible quarter for U.S. equities. S&P 500 Index futures slid 1.7 percent and the Shanghai Composite fell 5.6 percent, the most since February 2016. European shares also dropped.
/jlne.ws/2Y4uHGA
****SD: My tooth is still sore from a root canal and new crown - the silver lining of the soreness waking me up in the middle of the night was I took the time to check in on overnight futures action. The Financial Times has Volatility soars, Treasury prices jump on US-China trade fears; Bloomberg has Market Fallout in Charts: Investors React to U.S. Tariff Threat and MarketWatch has Wall Street's 'fear gauge' set to jump by the most in more than year as Trump tariff talk roils stock market.
Worst Yuan Drop Since 2016 Catches Options Traders Off Guard
Tian Chen - Bloomberg (SUBSCRIPTION)
Traders rushed to protect against further losses in the yuan after the currency suddenly sank the most in more than three years.
A gauge measuring demand to buy bearish contracts on the offshore yuan surged the most since early 2018 on Monday. The move came after U.S. President Donald Trump threatened to levy new tariffs on the country's goods. China's foreign ministry said officials were still planning to travel to the U.S. for the next round of talks but was unable to confirm when amid signs that a delay is being considered.
/jlne.ws/2H41zd5
What has the KY Derby to do with options?
ORATS Blog
For me, the road to options was through horse racing. When my professor of a basic programming class at Loyola Marymount University asked us to write a program on something with a lot of numbers, I picked up the sports page, saw the training times for Santa Anita, and was hooked. That program led to a successful handicapping program and eventually to buying thoroughbreds.
/jlne.ws/2H6WFdY
****SD: ORATS Blog also has an OIC recap - Options Industry Conference 2019. We filmed a video with Matt Amberson of OIC so keep your eyes peeled for that.
Energy Options Skews: Beyond Supply Shocks
Erik Norland - CME Group
If one reads news coverage of the global crude oil and oil products markets, one might imagine that risks to oil prices are skewed dramatically to the upside. Indeed, among oil consumers - and that's all of usÂthe main concern is supply disruptions, as driven home by the 1970s oil shocks, Iraq's 1990 invasion of Kuwait, and consequences of the Arab Spring in 2011. As such, casual observers of the oil markets might be surprised to discover that during the past decade, out-of-the-money (OTM) put options were more expensive than OTM calls 92.5% of the time for crude oil and around 89% of the time for products such as Ultra-Low Sulfur Diesel (ULSD, formerly heating oil) and gasoline. In other words, oil traders have spent much more time during the past decade worried about downside risks than prices heading higher (Figures 1 and 2). Moreover, it turns out that the degree of skewness in the options markets has often been a good contrary indicator of where prices are heading, especially for the product markets.
/jlne.ws/2GZzsur
****SD: This slipped under my radar last week.
| | | | | | Exchanges and Clearing | | | More Options Trading Focused in the Equity Space
TABB Forum Options Liquidity Matrix
The Options LiquidityMatrix is a monthly report of options market activity published by TABB Group with analysis and statistics. The report includes options trading volumes and statistics on execution metrics for each US listed options exchange and the industry, using data sourced from the OCC and Cboe LiveVol.
/jlne.ws/2GYjJM2
****SD: This also slipped under my radar last week.
Intercontinental Exchange Reports April Statistics
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported April trading volume and related revenue statistics.
/jlne.ws/2H105iq
****SD: NYSE options stats down slightly.
Nasdaq to Remove Invoice Availability from NDAQOptions.com
Nasdaq Options Trader Alert #2019
As part of an upgrade to the billing system, effective Friday, June 3, 2019, The Nasdaq Options Market (NOM) and Nasdaq BX (BX Options) will no longer deliver invoice and invoice reconciliation data on NDAQOptions.com. Nasdaq Phlx (Phlx) will discontinue invoice and invoice reconciliation data on NDAQOptions.com on June 28, 2019.
/jlne.ws/2He60B5
CME Group Announces Launch of New Micro E-mini Equity Index Futures
CME Group
CME Group, the world's leading and most diverse derivatives marketplace, announced the successful launch of its new Micro E-mini futures on the S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial Average indexes, which became available for trading today.
/jlne.ws/2H0GwXv
****SD: No volume yet displayed on CME's website but a product to watch as the Small Exchange gears up for launch. Plenty of options world overlap here. For more see CME's Why Micro Futures Are A Game Changer for Retail Traders.
Eurex ends April on a high: largest month-end open interest of all time
Eurex Exchange
Eurex, Europe's largest derivatives exchange and part of Deutsche Börse Group, has continued its upward trend in April. The number of traded contracts reached 160.8 million compared to 148.7 million in April 2018. This is an increase of 8 percent.
/jlne.ws/2H3uSMN
CBOE Proposes to Eliminate On-Floor Position Transfers
National Law Review
CBOE Exchange, Inc. (CBOE) recently filed a proposal to amend its Rule 6.49A to delete the provisions therein related to on-floor position transfers and amend the provision regarding presidential exemptions. Generally, CBOE Rule 6.49(a) requires that transactions of option contracts listed on the exchange for a premium in excess of $1.00 to be effected on the floor of the exchange or on another exchange.
/jlne.ws/2H1Mpnu
| | | | | | Moves | | | Stacey Gilbert Joins Glenmede Investment Management Derivatives Team
Business Wire
Glenmede Investment Management LP ("GIM"), a privately owned, independent asset management firm, today announced the appointment of Stacey Gilbert as a Portfolio Manager on its derivatives team. GIM continues to invest in its platform, offering strategies designed to mitigate risk and capture non-traditional sources of return.
/jlne.ws/2UYKkO0
****SD: Gilbert joins Glenmede after more than 20 years at Susquehanna where she was most recently head of derivatives strategy. I'd say Gilbert + (SIGx22) = ?$.
| | | | | | Regulation & Enforcement | | | SAT Stays SEBI Orders Against 3 Brokers, 3 NSE Officials
Moneylife Digital Team
The Securities Appellate Tribunal (SAT) has stayed orders passed by market regulator Securities and Exchange Board of India (SEBI) against three brokerages and three senior officials of the National Stock Exchange (NSE) in the NSE co-location (Colo) or algo trading scam. However, the Tribunal has asked the brokers, GKN Securities, Way2Wealth Brokers Pvt Ltd and OPG Securities to deposit 50% of the penalty amount as security by 20 May 2019. The SAT also stayed SEBI order on barring three NSE officials from holding any position in any market intermediaries for two years.
/jlne.ws/2UYT9Hz
****SD: It isn't so much the fines for brokers that intrigue me, it's the exchange officials. (NSE's swag at OIC was leather wallets.)
CFTC charges principals of binary options trading firm with USD4.8m fraud scheme
HedgeWeek
The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action (Complaint) against the principals of Berkley Capital Management, a binary options trading firm with offices in the US and the Netherlands and two pools that operated as Delaware limited partnerships - BBOT 1 and Berkley II.
/jlne.ws/2V3jDrE
Growing Sanctions Complexity Causes Headaches for Traders
Emilia David - WatersTechnology (SUBSCRIPTION)
Robust global sanctions data could be the next big pain point for trading firms, as actions against countries and businesses become both broader and more complicated.
/jlne.ws/2ViA2NT
| | | | | | Technology | | | Citi Forms New Lab to Teach Traders, Coders Other Skills
Jennifer Surane - Bloomberg (SUBSCRIPTION)
Markets Acceleration Lab is seeking about 12 people at first; Goal is 'to attract and create a pipeline of unique talent'
Citigroup Inc. isn't just teaching traders how to code, it's also making sure its coders know how to trade.
/jlne.ws/2H5n2Ct
| | | | | | Miscellaneous | | | Will ECB Change Course to End Negative Rates?
Blu Putnam - CME Group
Negative rates aimed at boosting European bank lending instead had the opposite effect. Will the ECB end this policy and raise rates in 2019?
/jlne.ws/2GYZ8aj
Conflicting Tax Forms Create `Nightmares' for Some Investors
Lynnley Browning - Bloomberg (SUBSCRIPTION)
Brokerage firms are sending tax statements to clients and the IRS with information that differs from the taxes investors ultimately owe, leading some filers to appear to owe tax on profits they never made.
The federal tax code contains two sets of IRS rules -- one that defines what information on taxable gains and losses that brokerages must report to their clients and the IRS, and another that defines how individual taxpayers report those gains and losses on their returns.
/jlne.ws/2H6cDXg
In Tough Times for Hedge Funds, These Are the Ones That Stand Out
Eric Uhlfelder - WSJ (SUBSCRIPTION)
The hedge-fund industry continued its losing streak last year.
The industry once again trailed the market in 2018, marking 10 straight years it has underperformed the S&P 500, according to data from BarclayHedge.
/jlne.ws/2Vj5xqY
The Great War and the Bank of England as Market Maker of Last Resort
Mike Anson, David Bholat, Mark Billings, Miao Kang, Kilian Rieder and Ryland Thomas - Bank Underground
During the global financial crisis, some central banks acted as market makers of last resort, buying and selling securities in financial markets when trading in them had stalled. Some commentators claimed this role was "a completely new" one for central banks. In this blog, we show, on the contrary, that the Bank of England acting as a 'market maker of last resort' has precedent.
/jlne.ws/2Vj5OtP
| | | | | | | | | JLN Options is sponsored by: | | | | | | | | | | | | | | | | | | |
|
|
| | | |
| | | | 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
Publisher | | | Sarah Rudolph
Managing Editor
| | | Jeff Bergstrom
Editor
| | | Spencer Doar
Editor
| | |
|
|
Disclaimer: All John Lothian Newsletters, JohnLothianNews.com, MarketsWiki.com and MarketsReformWiki.com are products of John Lothian News, a division of John J. Lothian & Company, Inc. The opinions expressed in all John J. Lothian & Company, Inc. publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers. Futures and options trading involve risk. Past results are no indication of future performance. Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any website or newsletter content.
© 2019 John J. Lothian & Company, Inc. All Rights Reserved. |
|
|
