Editor's Note: JLN Options will not be published on Monday, May 26 in observance of the Memorial Day holiday in the US. We'll be back on May 27. Have a great weekend! ~JB

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SEC Commissioner Caroline A. Crenshaw strongly criticized the SEC's recent decision to dismiss three lawsuits against businesses accused of acting as unregistered "dealers," arguing that these dismissals undermine congressional intent and decades of legal precedent, harming investors and capital markets. The lawsuits targeted firms that bought debt from small issuers, converted it to stock, and sold billions of shares for profit-behavior courts had already deemed sufficient to meet the statutory definition of a dealer. Crenshaw rejected arguments for dismissal, noting that the law does not require dealers to have customers and that the dismissed cases did not target traditional investment advisers or hedge funds, but rather entities engaging in high-frequency, profit-driven trading that often results in "toxic" financing.

Crenshaw warned that abandoning these enforcement actions removes critical investor protections, as registration requirements are central to market integrity, risk management, and regulatory oversight. She emphasized that registration rules ensure dealers adhere to financial responsibility, reporting, and operational standards, and that dismissing these cases could encourage others to evade legal requirements, undermining the securities law framework and exposing investors to greater risks.

Crenshaw argued that the SEC's mission to protect investors and maintain fair, efficient markets is being eroded by these dismissals, which she views as prioritizing convenience for market participants over the rule of law and the long-term health of U.S. capital markets. ~JJL

Bitcoin Options Show Bulls Unbowed With Open Interest at Record
Sidhartha Shukla - Bloomberg
Even though Bitcoin has retreated from record territory, options show that traders remain extremely bullish with open interest reaching an all-time high.
The total number of outstanding Bitcoin options contracts reached $48.2 billion as of Friday, according to data compiled by Coinglass. The largest digital currency fell as much as 3.4% to $107,357 on Friday, a day after reaching a record $111,980.
/jlne.ws/3Zxps4m

Jane Street Earns $2.3 Billion Riding India Options Trading Wave
Chiranjivi Chakraborty and Anto Antony - Bloomberg
Jane Street Group LLC generated more than $2.3 billion in net revenue from equity derivatives last year in India, where its lucrative trading strategies have sparked a probe by regulators. The trading haul was a sharp surge from 2023, underscoring the country's growing importance to the firm's global expansion, according to people familiar with the matter. India accounted for more than a 10th of the New York-based giant's record $20.5 billion in net trading revenue last year, the people said, asking not to be identified as the information is private.
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Nvidia, Tesla lead over $250 billion in short-seller losses during massive market rally
Josh Schafer - Yahoo Finance
The market's rapid bounce back to near-record highs over the past month has not been kind to investors betting against US stocks. From the market bottom on April 8 through May 20, short sellers have lost more than $250 billion, according to data from S3 Partners. All of the "Magnificent Seven" stocks were among the top 20 names on which short investors lost the most money. Shorts on Nvidia (NVDA) and Tesla (TSLA) lost more than $19 billion combined during the period.
/jlne.ws/4jdBKWM

Wall Street's 'fear gauge' shoots higher on latest Trump tariff threats
Joseph Adinolfi - MarketWatch
The Cboe Volatility Index, known as the VIX, or Wall Street's "fear gauge," shot higher on Friday after President Trump took to Truth Social to unveil his latest tariff threats.
In a series of posts, Trump demanded that Apple Inc. make its products in the U.S, or face a 25% tariff, then announced plans to slap a 50% levy on all imports from the EU, beginning June 1.
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Trump Media Is Coming for Brokerage Accounts With ETF Push; The company owned by a president who is already pushing the boundaries between business and public office is getting into the fund business.
Vildana Hajric - Bloomberg
The Trump brand has been used to hawk cryptocurrencies, Bibles, steaks and guitars. Now the US president's media company is laying the groundwork to sell investment funds. Trump Media & Technology Group Corp., which is majority owned by Donald Trump, plans to sell offerings tied to his agenda. The parent of the Truth Social platform, where the president is also a prominent poster, has announced plans for and trademarked the names of a group of financial products under the Truth.Fi banner-investments that will potentially benefit from the president's policies with bets on energy, crypto and domestic manufacturing. The proposed products include exchange-traded funds, or portfolios that trade like stocks that can be purchased through most brokers.
/jlne.ws/43yiBJq

LSEG drops plan to add Cboe data to WMR FX benchmarks
Marc Jones - Reuters
The London Stock Exchange Group's FTSE Russell unit has dropped plans to add Chicago Board Options Exchange owner Cboe to the group of currency data providers used to calculate its WMR FX benchmarks after pushback from users. FTSE Russell proposed adding Cboe's data for ten top currencies almost a year ago, but it said on Wednesday that user consultations showed it "could not be considered sufficiently equivalent to the current WMR Spot FX Benchmark primary data sources".
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Tiger-Backed Robinhood Rival Launches DIY Indexing With a Twist
Claire Ballentine and Vildana Hajric - Bloomberg
What if you wanted to build an index betting on companies traveling to Mars, firms with the most social-media followers, or those with CEOs over six feet tall? Ideas like these live outside the bounds of traditional index construction on Wall Street - too niche, too speculative. But a new offering from investing platform Public Holdings Inc. is testing whether that kind of demand exists among everyday investors.
/jlne.ws/43yiSvW

CFTC Staff Issues Advisory on Market Volatility Controls
CFTC
The Commodity Futures Trading Commission's Division of Clearing and Risk and Division of Market Oversight today issued a staff advisory reminding designated contract markets (DCMs) and derivatives clearing organizations (DCOs) of certain Core Principle and regulatory obligations under the Commodity Exchange Act and CFTC regulations related to controls designed to address market volatility.
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Opinion: The stock market is seeing more '90% days.' Here's what that means for your money.
Volatility favors the bulls for now, with the S&P 500's upside target near 6,150
Lawrence G. McMillan - MarketWatch
It is significant that Wednesday's sharp decline in the S&P 500 was a "90% down day." In such a trading session, either declines were nine times the number of advances, or declining volume was nine times the advancing volume, or both.
This is the fourth "90% day" for the U.S. market in the past month. Two have been 90% up days and two have been 90% down days. When the frequency of 90% days increases, that is not good for stocks. A large number of volatile days in the market is a bearish indicator. The chart below shows this data since 1998.
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Still Above 2000
Cboe (Video)
Catch this week's #RUTreport with Angela Miles as she shares market updates ahead of the U.S. market closure for Memorial Day this Monday.
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The upcoming FIA webinar, "Improving the Timeliness of Give-Up Processing," scheduled for June 4, 2025, will feature experts from the Derivatives Market Institute for Standards, including representatives from Cargill, Fincloud, Goldman Sachs, and Eurex Clearing. Panelists will discuss the industry's adoption of the Final Standard for Improving Timeliness of Trade Give-Ups and Allocations (30/30/30), released in June 2023, and share practical solutions for overcoming friction points that cause processing delays. The session highlights how these efforts have reduced risk and increased the percentage of trades correctly allocated to the right account on trade date (T+0). Register at www.fia.org. ~JJL

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