| December 22, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Editor's Note: This will be the final JLN Options newsletter of 2022. It's been an interesting year to be sure and we look forward to the next. We wish you all the best and joy for the holidays. JLN Options will be back on January 3, 2023.
| | | | | | Lead Stories | | | 10 Lessons for a Tough Year in the Options Market
Steven M. Sears - Barron's
In 2022, we crossed the financial Rubicon. The Federal Reserve ended easy-money policies and made the stock market a much rougher place. Investors know they must act with ingenuity to regain that lost equity paradise.
The heightened volatility should benefit options investors, but the takeaway after another year writing this column is that few investors really understand puts and calls.
/jlne.ws/3VjXZyf
Wall Street Searching for Clues Behind the VIX's Very Weird Year
Lu Wang - Bloomberg
Wall Street's favorite volatility gauge has acted so strangely in this brutal year for equities that a debate has emerged over its soundness. Options experts say there's nothing wrong with the gauge and the reason is the behavior of investors themselves.
The Cboe Volatility Index, the measure of S&P 500 option costs known as the VIX, usually moves in the opposite direction of the stock benchmark, going up when demand for hedges expands in down markets. This year, however, the two gauges have moved in tandem 26% of the time, the most since 2006. And spikes in the VIX have been muted. It topped out at 36, a lower level than during every bear market since 1990.
/jlne.ws/3FOoOFg
Tesla Is the Most Profitable Short of 2022 After Elon Musk Buys Twitter
Matthew Fox - Markets Insider
Short sellers betting against Elon Musk and Tesla are having a banner year, according to a Wednesday research note from S3 Partners.
The firm said that Tesla is the most profitable short trade of 2022, with traders bagging $15 billion in mark-to-market profits year-to-date.
/jlne.ws/3Ww45gg
Traders Rush into Tesla Put Options
Gunjan Banerji - WSJ
Trading in put options tied to Tesla surged to a record in December as the stock headed toward its lowest level in two years, according to Cboe Global Markets data.
/jlne.ws/3jnyOO2
Traders' $129 Billion Commodities Exodus Marks a Historic Shift
Devika Krishna Kumar and Isis Almeida - Bloomberg
In just one year, investors' bullish exuberance for commodities has turned into a spectacular retreat.
It's one of the biggest shifts in sentiment in history for raw materials. This time around, wild price swings have helped spur a rush for the exits that's taken $129 billion out of the global market â a record for any annual period up to mid-December, according to JPMorgan Chase & Co. The latest exodus comes after money poured into commodities in the first two months of this year.
/jlne.ws/3WAWGw3
Morningstar CEO's message to meme stock investors
Brian Sozzi - Yahoo!Finance
The meme stock frenzy may have died down from its fever-pitch levels during the COVID-19 pandemic, but there continues to be a wide swath of supporters for companies that are far from fundamentally sound and trade with heightened volatility. To that end, Morningstar CEO Kunal Kapoor has a reminder to the growing retail investor community still playing stocks such as AMC (AMC), GameStop (GME), and Bed Bath & Beyond (BBBY) in the hopes of quick and easy gains: Please use extra caution and think about long-term investing approaches.
/jlne.ws/3hP9v71
| | | | | | Exchanges | | | NYSE Group Announces 2023, 2024 and 2025 Holiday and Early Closings Calendar
Intercontinental Exchange
NYSE Group, part of Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, announced today the 2025 holiday calendar and early closing dates for its cash equity markets: New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, and NYSE National, as well as the NYSE American Options, NYSE Arca Options and NYSE Bonds markets. The 2023 and 2024 holiday and early closing dates are also set forth below.
/jlne.ws/3WGV3Nr
NYSE Arca Options: Changes to the maximum number of Complex Strategies
NYSE
NYSE Arca Options: Pillar Updates - Changes to the maximum number of Complex Strategies. On December 22, 2022, NYSE Arca Options (the "Exchange") will change the maximum number of new complex strategies per MPID to 35,000. As per Rule 6.91P-O (g), the Exchange imposes a limit on the maximum number of new complex strategies that may be requested to be created per MPID. Currently the maximum is 25,000. As of today, that limit has been increased to 35,000 new complex strategies per MPID.
/jlne.ws/3Wx8bV8
| | | | | | Moves | | | Cboe Clear Europe selects former SWIFT executive to replace departing Nagel as president; Cécile Nagel confirmed she would be stepping down from her role as president of EuroCCP - now Cboe Clear Europe - in September.
Annabel Smith - The Trade
Cboe Clear Europe has selected a former SWIFT executive to become its new president following the departure of Cécile Nagel in October earlier this year. Vikesh Patel is set to join Cboe Clear Europe at start of next year, subject to regulatory approval. He joins the clearing house as its president after serving at SWIFT for the last five years, most recently as its head of securities.
/jlne.ws/3YGaPKe
Cboe Appoints Vikesh Patel as President of Cboe Clear Europe
Cboe
Cboe Global Markets Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced the appointment of Vikesh Patel as President of Cboe Clear Europe, its leading pan-European clearing house. Mr. Patel will join the company in early 2023, subject to regulatory approval. Mr. Patel replaces Cécile Nagel, who stepped down from the role in September this year.
/jlne.ws/3HTZqjT
| | | | | | Strategy | | | Is a 2023 Stock-Market Rebound in Store After 2022 Selloff? What History Says About Back-to-Back Losing Years.
Isabel Wang - Barron's
History shows back-to-back losing years for the stocks are rareâbut the size of the market's drop in 2022 with no sign the Federal Reserve is ready to ride to the rescue means investors should beware, analysts warned.
With just a handful of trading days left in what is shaping up to be the worst year for the U.S. stock market in over a decade, the S&P 500 index is on track to close out the year down more than 18%.
/jlne.ws/3BYouTg
Opinion: If you think a Santa Claus rally is coming to the stock market, this is how to play it
Lawrence G. McMillan - MarketWatch
The benchmark S&P 500 Index has finally fallen below the 3900- to 4100-point trading range.
The move prompted an immediate reaction down to 3800, the next support level. (To see my suggestion for a so-called Santa Claus rally, please see the next item, below.)
Frankly, I would have expected more selling after the S&P 500 broke a support level of that magnitude (perhaps a move to 3700).
/jlne.ws/3FOCdwT
| | | | | | Miscellaneous | | | How 2022 shocked, rocked and rolled global markets
Reuters
Trillions of dollars wiped off world stocks, bond market tantrums, whip-sawing currency and commodities and the collapse of a few crypto empires - 2022 has been perhaps the most turbulent year investors have ever seen, and for good reason.
Tallying the final numbers is useful but doesn't even come close to telling the whole story.
/jlne.ws/3YIfafW
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| | | Jeff Bergstrom
Editor
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