| April 27, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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NovaFori's Garry Jones wants to transform markets with technology
JohnLothianNews.com
Garry Jones, the CEO of NovaFori, says the company is focused on digital transformation. He has spent most of his career working in the derivatives markets and applied technology, but now is creating auction platforms for clients such as Christie's and overlaying them with data science.
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| | | | | | Lead Stories | | | Day Traders Lost $1 Billion Trading Options During the Pandemic
Vildana Hajric - Bloomberg
Of all the risky things amateur investors did while locked at home in the pandemic, dabbling in stock options was one that veteran investors were convinced would end badly.
They weren't wrong.
Turns out, taking leveraged flyers on meme stocks mentioned on Reddit's WallStreetBets trading forum is harder than it looks. New research from economists at the London Business School found that mom-and-pop day traders managed to lose more than $1 billion during the bull market. The bill climbs to $5 billion when the cost of doing business with market-makers is factored in.
/jlne.ws/3vki3Xt
Wall Street's big slide makes retail investors wary to 'buy the dip'
John Mccrank - Reuters
U.S. investors have apparently been losing their appetite to "buy the dip" during Wall Street's recent slide, further eroding support for a market pummeled by worries over everything from tightening monetary policy to the war in Ukraine.
Options trading data tracked by Vanda Research showed that purchases of calls - typically employed to express a bullish view of stock prices - have fallen close to year-to-date lows for the tech-heavy Invesco QQQ ETF (QQQ.O), which tracks the tech-heavy Nasdaq Composite Index.
/jlne.ws/3EWbn5m
Churning Stocks Dealing Swift Punishment to Anyone Who Dares Buy
Lu Wang and Denitsa Tsekova - Bloomberg
Trying to pick the bottom in stocks every time they fall is proving costlier this year than any time since the 1970s.
Beset with slow and steady declines spread out over days and sometimes weeks, investors are being shaken out of their dip-buying stupor. In 2022, the average drop in the S&P 500 has lasted roughly 2 1/2 days, more than any year since 1974, while its returns following down sessions have been negative 0.2%. That's also the worst in almost five decades.
/jlne.ws/3rXGYy5
Stock Rout Is Fed's 'Best-Case Scenario' as Powell-Put Era Ends
Katherine Greifeld - Bloomberg
If you're a Federal Reserve policy maker, the stock selloff of the last few weeks comes with a silver lining.
Financial conditions -- a cross-asset measure of market health from equities to fixed income -- have finally started to tighten over the past week in sympathy with the recent plunge in equities, led by richly priced technology companies.
/jlne.ws/3vQ4Jcq
U.S. Diesel Futures Close at Record High as Shortage Deepens
Chunzi Xu - Bloomberg
Diesel futures trading in New York surged to the highest level in records going back to 1986 as global demand for the fuel remains robust in the wake of Russia's invasion of Ukraine.
Nymex ultra-low sulfur diesel futures settled at $4.4679 a gallon on Tuesday, exceeding the prior record on March 8, when the U.S. formally sanctioned Russian oil. Since then, diesel has become the world's most in-demand fuel as buyers in Latin America, Europe and within the U.S. compete for supplies as fast as refiners on the U.S. Gulf Coast can make them.
/jlne.ws/3LhuEQV
| | | | | | Exchanges | | | JP Morgan to offer clients clearing of CDS index options through ICE; ICE Clear Credit announces the expansion of its index option clearing services to include JP Morgan.
Jonathan Watkins - The Trade
Intercontinental Exchange (ICE) has added JP Morgan as a partner who will offering clearing services for client-executed Credit Default Swap (CDS) Index Options. JP Morgan will deliver its clients the service via ICE Clear Credit.
/jlne.ws/3kf55nF
Expansion of Listing Schedule of the E-mini Nasdaq-100 Index Futures and Options on E-mini Nasdaq-100 Index Futures Contracts
CME Group
Expansion of Listing Schedule of the E-mini Nasdaq-100 Index Futures and Options on E-mini Nasdaq-100 Index Futures Contracts Effective Sunday, May 22, 2022, for trade date Monday, May 23, 2022, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. ("CME" or "Exchange") will expand the listing schedule for the E-mini Nasdaq-100 Index Futures and Options on E-mini Nasdaq-100 Index Futures contracts (the "Contracts") for trading on the CME Globex electronic trading platform ("CME Globex") and for submission of clearing via CME ClearPort, as more specifically described in the table below.
/bit.ly/3Mvhwry
Crypto ETF Roll Out in Australia Hits Snag in Inaugural Push; Cosmos Asset Management, 21Shares funds both hit with delays; Cboe Australia says 'standard checks' are still being done
Tanzeel Akhtar - Bloomberg
Australians may have to wait a little longer for the debut of the nation's first financial products offering direct expose to cryptocurrencies. Cboe Australia said in a statement Tuesday that "standard checks" prior to the launch of Cosmos Asset Management's Cosmos Purpose Bitcoin Access ETF are still being completed and the fund will not commence trading Wednesday as anticipated. 21Shares AG, in partnership with ETF Securities, said its fund listing was also delayed.
/jlne.ws/36SSrI2
CME Group 1Q Net Up Sharply on Higher Volumes
Rob Curran - MarketWatch
CME Group Inc. said first-quarter earnings rose by 24% on robust growth in trading volumes of options and other financial contracts, as the company benefited from a volatile quarter for markets.
The Chicago exchange operator said net income rose to $711 million, or $1.95 a share, from $574.4 million, or $1.60 a share, a year earlier. Excluding certain items, CME posted adjusted earnings of $2.11 a share.
Revenue rose 7.4% to $1.35 billion, the company said.
/jlne.ws/3Kgm83r
Bybit Unveils Crypto Options Trading Services
Reuben Jackson - TipRanks
As the crypto market advances and matures, the demand for more sophisticated trading products has risen. For instance, options trading, which has its roots in the traditional finance (TradFi) ecosystem, is now one of the most popular products in the crypto space.
Several exchanges already offer crypto options trading for some popular digital currencies, including Bitcoin (BTC) and Ethereum (ETH). Realizing the growing popularity of crypto options trading, crypto exchange Bybit is also expanding into the options trading market.
Bybit has just revealed that the exchange platform will launch a crypto options trading feature to complement its existing suite of perpetual and expiration futures contracts.
/jlne.ws/3ETk9AW
| | | | | | Regulation & Enforcement | | | Archegos chief Bill Hwang has been arrested a part of an alleged securities-fraud scheme that helped his doomed fund boost leverage to $160 billion
Matthew Fox - Business Insider
The investment manager had increased his fund's leverage to $160 billion by relying on various counterparties.A cascade of margin calls in March 2021 led to the ultimate collapse of Archegos and cost banks more than $10 billion in losses.
Archegos Capital Management founder Bill Hwang was arrested on Wednesday and charged by the Justice Department with securities fraud, wire fraud, and racketeering conspiracy.
/jlne.ws/3MEc3il
| | | | | | Technology | | | Quantitative Brokers Launches Prism, The Next Gen Smart Order Routing Tool For Us Treasuries
Quantitative Brokers
Quantitative Brokers (QB) a leading provider of advanced execution algorithms and data-driven analytics for global futures, options, and OTC fixed income markets, unveiled their new smart order router (SOR) for US Treasuries - Prism. Prism is more than a liquidity aggregator. It dynamically shifts "child orders" across venues, intra-trade as it sees the potential for price improvement. Prism continuously evaluates trading venues in real-time by leveraging price signals, learned venue statistics and pre-trade market impact estimations. Prism is highly customizable based on user needs, venue costs, and client preferences.
/jlne.ws/3xX9yDG
| | | | | | Strategy | | | VIX Call Buying Could Signal More Choppiness to Come
Rocky White - Schaeffer's Investment Research
There was a buying spree on Cboe Market Volatility index (VIX) call options recently. The buy-to-open (BTO) call/put volume ratio spiked above five for the first time since just before the pandemic. Those call buyers have been spot on since the spike occurred just under two weeks ago; the VIX is up 30% in that time frame. Next, I'm going to look at past spikes to see how the stock market and VIX behaved afterwards.
/jlne.ws/3vkC0gN
Here's how far the S&P 500 has to fall to enter another stock-market correction
William Watts - MarketWatch
Stocks were enjoying a bounce Wednesday afternoon, providing some breathing room for the S&P 500 after it came close to entering its second market correction of 2022.
The large-cap benchmark was up less than 1% to trade near 4,210 in early afternoon activity, after ending Tuesday at 4,175.20 in a tech-led selloff that dragged it down by 2.8%. Stocks have seen volatile day-to-day and intraday swings in recent sessions.
/jlne.ws/3ER1i9I
| | | | | | Miscellaneous | | | Melvin Capital's U-turn reignites debate over hedge fund fees
Brooke Masters and Laurence Fletcher - Financial Times
Melvin Capital's sharp U-turn this week on proposed changes to its performance-fee structure has reignited a debate among hedge funds about how portfolio managers are paid.
For the last three decades, the standard way to tie pay to financial performance was for hedge funds and private equity firms to receive management fees based on the amount of money invested plus a chunky share, usually 20 per cent, of the gains they produce.
/jlne.ws/38njYlb
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