| August 19, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
MWE SHORT: Kapil Rathi - Start Your Career with Confidence
JohnLothianNews.com
If you're starting a new job, have your house in order, literally. Kapil Rathi, vice president of options business strategy with BATS, focused his talk on the all-important moments at the very beginning of a new job or career. While confidence is key in nearly all endeavors, there are some simple steps that, if executed properly, put people in a position to succeed before even completing day one.
Watch the video »
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Register HERE
| | | | | | Lead Stories | | | A $2 Trillion Stock-Options Deadline Is Make-Or-Break Moment for Bulls; Options trading seen having lifted stocks, capping volatility; Brace for price swings in both directions: Nomura strategist
Lu Wang - Bloomberg
With August shaping up to be the calmest month this year for US stocks, traders are closely watching Friday's $2 trillion options expiration for hints whether the tranquility will last. At issue is the belief that derivatives markets have somehow played a key role in suppressing volatility, thereby compelling rules-based quant traders to buy shares and in turn luring a broader group of investors back into the market in order to chase gains.
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Hedge funds pile up $125 billion bet against the S&P 500's big summer rally
Joy Wiltermuth - MarketWatch
A more than $125 billion institutional short position has been building up against the U.S. stock market, driven by hedge funds, according to BNP Paribas.
Futures contract data points to a sharp increase in the amount of bets against the S&P 500 index in recent months, even though the stock-market gauge has climbed nearly 17% from its mid-June low when it tipped into a bear market.
/jlne.ws/3cadtEz
Catching up with former longtime CBOE exec William Brodsky; He was recently appointed to the board of the Securities Investor Protection Corp. by his former law school classmate: President Joe Biden.
Laura Bianchi - Crain's Chicago Business
During his 20-year tenure at what is now Cboe Global Markets from 1997 to 2017, William Brodksy transformed the Chicago Board Options Exchange into an electronic, publicly held exchange. Brodksy, 78, is now chairman of two Chicago-based firms: Options Solutions, which he founded with his son Michael, and Cedar Street Asset Management, founded by his son Jonathan.
/jlne.ws/3QVl093
****** Always fun to catch up with Bill Brodsky, but his wife Joan is fun too. They are a pair. ~JJL
Stocks Slide as Short-Sellers Cash In on Rate Woes: Markets Wrap
Stephen Kirkland and Vildana Hajric - Bloomberg
Stocks fell as short-sellers resurfaced and investors turned cautious after Federal Reserve officials beat the drum on hiking rates. Treasury yields climbed and the dollar rose.
The S&P 500 Index extended losses, heading for its biggest daily decline since June. The tech-heavy Nasdaq 100 dropped more than 2%, with growth-related stocks among the hardest hit Friday. Meanwhile, Wall Street's fear gauge, the Cboe Volatility Index, jumped the most in more than two weeks, back above 20.
/jlne.ws/3QBdoZB
The BlackRock Trust: Crypto Legitimacy or the Beginning of the End for Bitcoin?
Zac Colbert - CoinDesk
After BlackRock, the largest asset manager in the world, announced on Aug. 11 that it will launch a private bitcoin trust for its clients, some crypto enthusiasts said the move could legitimize the digital asset in the eyes of more traditional investors. BlackRock's new private trust will make bitcoin available to its institutional clients, tracking bitcoin's performance, offering direct exposure to the price of the cryptocurrency and of course, trading options.
/jlne.ws/3QFTAEn
Ryan Cohen Dumped Bed Bath & Beyond Stock. Is the Meme Trade Over?
Ben Levisohn - Barron's
So much for diamond hands.
Ryan Cohen, meme stock cheerleader extraordinaire, just did something that no self-respecting Reddit trader would do: He sold his entire stake in Bed Bath & Beyond.
The decision to sell may have been a smart one. Cohen first bought Bed Bath & Beyond stock at $15.34 a share, only to watch the stock tumble below $5. Losing about two-thirds of your money on a trade is never great, even when you are a billionaire.
/jlne.ws/3dIxbYi
Meme stock Bed Bath & Beyond 'decoupled from economic reality' but now getting crushed; it isn't alone
James Rogers - MarketWatch
This is an eventful time for meme stocks, as evidenced by Bed Bath & Beyond's rollercoaster week.
Shares of the troubled retailer skyrocketed recently, driven by the Wall Street Bets crowd on Reddit. However, a filing with the Securities and Exchange Commission made public on Wednesday afternoon showed that investor Ryan Cohen planned to unload his large stake in the home goods retailer. Then an SEC filing made public after markets closed Thursday showed that Cohen's RC Ventures had sold its entire stake in Bed Bath & Beyond Inc., sending its shares plunging for a second consecutive day.
/jlne.ws/3PzSgle
Meme stocks in reverse as Bed Bath & Beyond slump spooks investors
Anisha Sircar, Susan Mathew and Bansari Mayur Kamdar - Reuters
Retail favorites GameStop and AMC Entertainment fell on Friday, undoing much of their recent gains after billionaire Ryan Cohen abruptly dumped his stake in struggling retailer Bed Bath & Beyond days after he took a bullish options position in the stock.
Bed Bath & Beyond Inc's shares (BBBY.O) extended their plunge, falling 42% to $10.80, after Cohen said a day earlier he had sold his 9.8% stake in the company, almost five months after amassing it and pushing for changes.
/jlne.ws/3puD3Hl
Ken Griffin's Citadel Securities borrows $600mn as trading revenues surge; Lenders line up to provide financing after volatility spurs profit gains for US equities trading house
Eric Platt - Financial Times
Citadel Securities borrowed $600mn on Thursday to bolster its balance sheet and trading business, capitalising on strong demand from lenders after volatile markets helped one of the biggest US equity trading houses make a banner start to 2022. The company, which is majority owned by billionaire Ken Griffin, forms a critical part of the plumbing of US financial markets. It was thrown into the spotlight last year as millions of investors piled into stock and option markets for the first time. The company told lenders, which include credit funds, that it planned to use the $600mn in part for additional trading capital. Citadel has sought to expand into markets outside the US and build its business with institutional traders in fixed income.
/jlne.ws/3QI54Yc
| | | | | | Exchanges | | | Horizons ETFs launches Nasdaq-100 Covered Call ETF
Sherree DeCovny - Nasdaq
For more than a decade, Horizons ETFs has managed one of the largest covered call suites in Canada. Effective on June 27, 2022, they've added another to their covered call suite: the Horizons Nasdaq-100 Covered Call ETF (QQCC), which trades on the Toronto Stock Exchange (TSX). For the first time, investors now have a Canadian-listed opportunity to gain exposure to the Nasdaq-100 Index (NDX ) while enhancing distribution yield and income through an actively managed options strategy.
/jlne.ws/3dDUFho
Cboe Global Markets Declares Increased Third-Quarter 2022 Dividend; Quarterly cash dividend increased four percent to $0.50 per share; 12th consecutive year Cboe has increased its dividend
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced its Board of Directors has declared an increased quarterly cash dividend of $0.50 per share of common stock for the third quarter of 2022, representing a four percent increase from the prior quarter's dividend of $0.48 per share. The third-quarter 2022 dividend is payable on September 15, 2022, to stockholders of record as of August 31, 2022.
/bit.ly/3K9DtN4
| | | | | | Regulation & Enforcement | | | SEC Will Likely Look Into Ryan Cohen's Bed Bath & Beyond Exit: Jay Clayton
Jennifer Sor - Markets Insider
The Securities and Exchange Commission will likely look into Ryan Cohen's exit from Bed Bath & Beyond this week, former SEC Chairman Jay Clayton said.
Cohen, who is known for ambitious stakes in meme stocks, sold his holdings in Bed Bath & Beyond this week for a profit of $68 million. The star investor announced in March that his venture capital firm had taken a nearly 10% stake in the struggling home-goods retailer, sending the stock higher. Shares tumbled 40% Friday and are now less than half of their peak.
/jlne.ws/3QSJXC3
| | | | | | Technology | | | Baton Systems expands its CCP network by connecting to OCC
Baton Systems
Baton Systems ("Baton"), the global fintech digitally transforming post-trade processing using distributed ledger technology (DLT), now provides connectivity to the Options Clearing Corporation (OCC) through the Baton Core-Collateral⢠ecosystem. By expanding connectivity, clearing firms will be able to automate collateral management across 11 major CCPs globally, together comprising more than 93% of margin, placed by U.S. registered FCMs. With the continued rise in interest rates, it's becoming even more important to FCMs that they maximise their non-cash collateral usage.
/jlne.ws/3CdL9fa
| | | | | | Strategy | | | Flipping Perspectives: The Continued Value of Inverted Exchanges
Cboe
The U.S. equity market structure landscape has changed substantially over the last decade. In particular, in the last three years there have been large shifts in volume and a restructuring of where that order flow is directed, as well as the noticeable rise and fall of inverted exchange market share. Inverted exchanges play an important role in U.S. equity market structure and participants should be mindful when deciding where to route their orders, primarily to retain faster fill times for orders at the National Best Bid or Offer (NBBO).
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Friday's $2.3 trillion options expiration could remove a critical avenue of support for stocks, analysts say
Joseph Adinolfi - MarketWatch
Investors looking for signs as to whether the rally in U.S. stocks will continue in the latter half of August may find some meaningful clues on Friday, when $2.3 trillion in equity-linked options are set to expire, according to analysts from Spotgamma and Goldman Sachs Group Inc.
On Friday, Rocky Fishman, the head of index volatility research at Goldman, sent a chart to MarketWatch illustrating the different types of stock-linked options that are set to expire, as well as whether they're set to expire in the morning, or in the afternoon in New York.
/jlne.ws/3dBopeF
Options Trading Rises, and So Does This Portfolio Stock
The Street
Month to date, the portfolio's position in Cboe Global Markets (CBOE) is up mid-single digits, with roughly half that gain coming on Wednesday. There were two catalysts for that jump - data from Trade Alert that showed retail investors are back trading single stock options, and a new Buy rating on the shares from Rosenblatt Securities with a Wall Street high price target of $153. The consensus price target for CBOE shares has inched up to $138 from $136, but remains modestly below our $140 target.
/jlne.ws/3dw1LEw
| | | | | | Events | | | Cboe RMC 2022
Cboe
We're back and bigger than ever with our leading global Risk Management Conference sure to leave you energized and empowered with perspectives on trading and investing strategies.
Join your fellow traders, investors, strategists and researchers to learn about the latest products and strategies for managing risks, enhancing yields and managing volatility.
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October 17 - 21, 2022
/jlne.ws/3pz3WKp
**** JB: Fantastic destination. Just be wary if anyone offers you some Hákarl (it's...an acquired taste).
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| | | Jeff Bergstrom
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