| October 22, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Bitcoin Options Traders Eye $80,000 No Matter Who Wins US Election; Implied volatility on options around election day has jumped; Bets heavily skew toward calls with record high strike prices
David Pan - Bloomberg
Options traders are increasing bets that Bitcoin will reach a record high of $80,000 by the end of November no matter who wins the US presidential election.
The implied volatility for Bitcoin options coming due around the Nov. 5 election day is elevated, with the wagers skewed toward call options that give the buyer the right to buy the cryptocurrency at new highs.
/jlne.ws/4dX7HzO
Volatility Hedge Fund QVR Takes Aim at JPMorgan Options Whale; QVR looks to capitalize on boom in price-insensitive trades; Funds like JEPI have 'materially changed' market dynamics
Lu Wang - Bloomberg
In the telling of Scott Maidel, a 20-year volatility pro, it's official: the options-selling boom across Wall Street has now become too popular for its own good.
Retail and institutional crowds are pouring into funds that go all-in on stock derivatives to generate steady income on autopilot, day in and day out. But this now-$100 billion frenzy - part of the broader short-volatility trade - is whittling down once-lucrative returns, creating fresh wrinkles in the options landscape that specialist hedge fund managers like Maidel are racing to exploit.
/jlne.ws/4fd5yRU
Investors flee thematic ETFs as stock benchmarks soar
Suzanne McGee - Reuters
Investors are leaving exchange-traded funds tied to specific themes, such as artificial intelligence and video gaming, as they flock to funds linked to broad stock-market benchmarks that are hitting record highs.
The run for the exits, however, may slow if the broader market stumbles.
While flows in equity ETFs overall continue to climb, thematic ETFs, which invest in companies tied to everything from solar energy to robotics and millennial consumers, are on pace for their third-consecutive year of net outflows, according to financial data and analysis company Morningstar.
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| | | | | | Exchanges | | | SGX FX Aims to Grow Electronic FX Options Trading
Shanny Basar - MarketsMedia
Lee Beng Hong, CEO of SGX FX and head of wholesale markets & platforms at Singapore Exchange (SGX Group), said the company would like to grow electronic trading of currency options as average daily volume (ADV) of both over-the-counter and exchange-traded derivatives reached a record. SGX reported that OTC FX ADV surpassed its target by increasing 47% to reach $111bn in the last financial year, between 1 July 2023 and 30 June 2024. In the same period, FX futures ADV grew 36% to about 204,000 contracts. In September this year, combined OTC and futures ADV reached a notional $168bn.
/jlne.ws/3NxHCg6
Delisting of Securities of Vocodia Holdings Corp and SinglePoint Inc. from Cboe BZX Exchange, Inc.
Cboe
Cboe BZX Exchange, Inc. ("BZX") announced today that it will delist the common stock and warrants of Vocodia Holdings Corp. Vocodia Holdings Corp's securities were suspended on September 11, 2024 and have not traded on BZX since that time.
BZX also announced today that it will delist the common stock of SinglePoint Inc. SinglePoint Inc.'s securities were suspended on September 11, 2024 and have not traded on BZX since that time.
/jlne.ws/4eVyCgU
Traditional exchanges gain ground in the US$100bn-a-day crypto derivatives market
Natasha Rega-Jones - IFR
A battle between the worlds of traditional finance and crypto currencies is heating up as mainstream exchange operators like CME Group start to grab a larger share of the US$100bn-per-day crypto derivatives market. CME, one of the largest derivatives exchanges in traditional financial markets, has seen average daily volumes in its bitcoin futures contracts almost triple over the past year to US$4.5bn amid growing interest from institutional investors. Other mainstream platforms like Eurex are steadily gaining ground too, while LCH, owned by IFR's parent LSEG, has plans to ramp up its involvement in the market.
/jlne.ws/4hcjqO1
ICE Reaches Record Open Interest Across Global Energy Benchmark Brent Crude Futures and Options; Plus, Record Open Interest across Gasoil Futures and Options and Total Oil Options
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced that ICE Brent, the largest crude oil futures and options market in the world and the global benchmark price for crude, reached record open interest of 6.4 million contracts on October 18, 2024, surpassing the record previously set in April 2020. Brent open interest is up 20% year-over-year (y/y) across futures and options. In addition, ICE's total oil options markets reached record open interest of approximately 6.4 million contracts on October 18, 2024. While ICE Low Sulphur Gasoil futures and options reached record open interest of 1.3 million contracts, up 67% y/y. ICE Gasoil sits at the center of middle distillates trading as the global benchmark for refined oil products. Average daily volume (ADV) in Gasoil is up 24% y/y.
/jlne.ws/4h845Om
OptAxe launches new MTF for FX options; Having received authorisation from the FCA, the OptAxe trading venue centralises FX options liquidity to increase trading opportunities.
Wesley Bray - The Trade
Centralised trading venue OptAxe has received FCA authorisation to operate a multilateral trading facility (MTF) for axe-driven FX options trading. OptAxe stated that it is launching the new venue to address fundamental shortcomings in FX options trading. According to the firm, increased fragmentation in FX trading now presents substantial position distribution and coverage challenges, and places constraints on effective price discovery and execution options.
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MEMX Options - Options Exchange Penny Program
MEMX
This regulatory notice is being provided by MEMX LLC ("MEMX") to inform Members of MEMX Options ("MEMX Options" or the "Exchange") that the following classes will be added to the Exchange's Penny Program on November 1, 2024.
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Abaxx Announces C$2.795 million Strategic Financing
Abaxx
Abaxx Technologies Inc. (CBOE CA:ABXX) ("Abaxx" or the "Company"), a financial software and market infrastructure company, majority shareholder of Abaxx Singapore Pte Ltd., the owner of Abaxx Commodity Exchange and Clearinghouse (individually, "Abaxx Exchange" and "Abaxx Clearing"), and producer of the SmarterMarkets Podcast, is pleased to announce that it anticipates entering into a binding agreement with a strategic investor, pursuant to which the investor has agreed to purchase 215,000 common shares (the "Shares") of the Company at a price of CAD$13.00 per common share for aggregate gross proceeds of C$2,795,000 on a private placement basis (the "Financing").
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| | | | | | Strategy | | | Bitcoin's $4.2B October Options Expiry May Increase Short-Term Volatility; Approximately 16% ($682 million) of the notional value in bitcoin that is set to expire is currently "in the money."
James Van Straten - CoinDesk
Is Bitcoin Losing Its Bullish Momentum?
The crypto market may be set up for some short-term volatility this week as monthly bitcoin (BTC) and ether (ETH) options contracts are set to expire on Friday.
BTC and ETH options contracts worth $4.2 billion and $1 billion, respectively, will expire on Deribit at 08:00 UTC. An option allows the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a certain time period.
/jlne.ws/3YvxJWC
A Short Yet In-depth Analysis of VIX Trading Above 38%; The VIX has traded above that elevated only five times since 1995
Kai Zeng - tastylive
On Aug. 5, the S&P 500 (SPX) experienced a surprising decline of 3% in a single day. However, even more notable was the Cboe Volatility Index, or VIX, also known as the "fear index," closing at a high of 38%. That situation raises the question of how often such occurrences happen and their historical significance, particularly when compared to the market correction in 2022.
/jlne.ws/4dSvf93
Traders Are Paring Bearish Dollar Bets Leading Into US Election; USD sentiment sees biggest positive swing since 2021: CFTC; Euro, Mexican peso vulnerable to selloff ahead, Citi says
Carter Johnson - Bloomberg
Speculative currency traders who vacillated all year between bullish and bearish views on the dollar just made their biggest move in three years ahead of the US election.
Hedge funds and asset managers in the second week of October reduced dollar shorts, or bets against the greenback, by some $8 billion. That net positive swing in trades was the largest since the depths of the pandemic in 2021, latest data released by the Commodity Futures Trading Commission and compiled by Bloomberg show. After entering the month holding more than $13 billion in bearish wagers on the greenback, these derivatives traders are now effectively flat.
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| | | Jeff Bergstrom
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