| May 11, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Debt Ceiling Doomsday Scenario Has Wall Street Traders Taking Up Hedges
Denitsa Tsekova and Sujata Rao-Coverley - Bloomberg
In Washington debt-ceiling brinkmanship is threatening to push the US into default. And on Wall Street, traders are gaming out what could be a rare Black Swan event.
In the options market, hedges against a volatility breakout are seeing the most demand in five years. The cost to protect against a market selloff of around 10%, or one-standard deviation, is the highest in a year. Demand for tail-risk hedges that pay out in a fall as precipitous as 30%, or three deviations â a Black Swan event â has risen to levels last seen at the peak of March's banking turmoil.
/jlne.ws/42oPEh8
Single-Stock ETFs Get Vote of Confidence in Huge 32-Fund Filing
Vildana Hajric - Bloomberg
Single-stock exchange-traded funds made a splash in the industry when they debuted last year. Now one issuer is hoping to double the existing lineup.
GraniteShares is looking to launch 32 new funds focused on providing investors leveraged daily exposure to certain companies, according to a Tuesday filing. The number is roughly equal to the current total of all single-company ETFs in the US, which clocks in at around 30, according to a database tracked by Bloomberg Intelligence's Henry Jim. The issuer is looking to debut such funds focused on American Airlines Group Inc., Apple Inc., Coinbase Global Inc., Meta Platforms Inc., Tesla Inc. â as well as a few other auto companies â among others.
/jlne.ws/3Iqs7EP
Jamie Dimon Says a US Debt Default Is 'Potentially Catastrophic'
Carla Mozée - Markets Insider
JPMorgan Chase CEO Jamie Dimon on Thursday warned of unprecedented economic harm if the US defaults on its debt amid a failure by lawmakers to raise the country's debt ceiling.
A default "is potentially catastrophic," Dimon told Bloomberg TV in an interview at the bank's Global Markets Conference in Paris.
/jlne.ws/42t5NSR
Why the Fed May Not Pause Rate Increases
Chelsey Dulaney - WSJ
With Wednesday's consumer-price index offering the latest sign that U.S. inflation is abating, some investors are optimistic that last week's Federal Reserve interest-rate hike was its last for now.
Florian Ielpo, head of macro at Lombard Odier Investment Managers, is less convinced.
/jlne.ws/3pvEtF0
| | | | | | Exchanges | | | Cboe Global Markets Announces 2023 Annual Meeting Results
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced the preliminary shareholder voting results from its 2023 Annual Meeting held today.
All 12 board of director nominees served on the 2022-2023 board term and received a majority of votes cast.
/jlne.ws/44Rfig2
LCH to Launch Crypto Derivatives Clearing as Regulation Grows
Shanny Basar - MarketsMedia
LCH SA, London Stock Exchange Group's European clearer, will provide a new segregated clearing service for digital asset derivatives venue, GFO-X, as more trading in the asset class is expected to move to regulated venues. In April this year LCH DigitalAssetClear said it will provide clearing services for cash-settled Bitcoin index futures and options contracts traded on GFO-X, a venue approved as a multilateral trading facility by the UK Financial Conduct Authority. The service is expected to go live in the fourth quarter of 2023.
/jlne.ws/44T2PbE
Robinhood beats revenue estimates as rate hikes bolster interest income
Manya Saini - Reuters
Robinhood Markets Inc (HOOD.O) on Wednesday surpassed Wall Street estimates for first-quarter revenue, as the U.S. Federal Reserve's rapid rate hikes boosted the online brokerage's interest income.
Shares of the company, which was at the center of 2021's retail trading frenzy, pared gains and were last up 2% in volatile extended trading after Robinhood also said it will launch 24-hour trading for five days a week.
/jlne.ws/41sZ8GW
| | | | | | Regulation & Enforcement | | | The Next "Century of Progress": Remarks before the International Swaps and Derivatives Association Annual Meeting
Chair Gary Gensler - SEC
Good afternoon. I'm pleased to be back for what I'm told is the fifth time speaking before the International Swaps and Derivatives Association (ISDA). As is customary, I'd like to note that my views are my own as Chair of the Securities and Exchange Commission, and I am not speaking on behalf of my fellow Commissioners or the staff. May 27 marks 90 years since President Franklin Roosevelt signed the first of the federal securities laws: the Securities Act of 1933.
/jlne.ws/3I1P4ho
JPMorgan's Jamie Dimon calls for SEC probe into bets against bank stocks
Jennifer Hughes - Financial Times
JPMorgan Chase's chief executive Jamie Dimon has called on US regulators to look into the behaviour of investors betting against bank stocks as part of official efforts to "finish" the banking turmoil.
Four lenders have failed while some hedge fund short sellers have made large profits from bets against such stocks in the past two months. Regulatory action to deal with the bank collapses has failed to halt falls in some lenders' shares.
/jlne.ws/3VSDVFf
| | | | | | Technology | | | Crypto Derivatives Protocol Vega's Mainnet Goes Live for Futures, Options Trading; The blockchain, called Alpha, is said to be built mainly to support decentralized trading.
Shaurya Malwa - CoinDesk
Crypto derivatives protocol Vega on Wednesday launched its Alpha mainnet, a blockchain built specifically to handle decentralized derivatives trading of financial products such as futures and options. Alpha offers support for a range of market types and assets, including futures, spot swaps, options and perpetuals that track the prices of various tokens - allowing users to deploy strategies to profit from their price gyrations.
/jlne.ws/3nRJqr3
| | | | | | Strategy | | | Opinion: Stocks are stuck in a trading range, but watch the VIX for signs of a breakout
Lawrence G. McMillan - MarketWatch
The stock market, as measured by the S&P 500 Index SPX, -0.17%, has had many days that were substantially up or down, but the net result has been little change. SPX remains in the trading range that is bound by 4050 on the downside and 4200 on the upside. That is the short-term trading range which has been in place since early April.
/jlne.ws/3Bg5tL8
VIX Tricks
Helene Meisler - The Street
Everyone seems to have an explanation for why the Volatility Index is so low. I do not have one. Even if I had one and I spouted it out, it would sound as if I were rationalizing an indicator, something I prefer not to do.
What I find curious, though, is that all those folks who spent last spring calling for a VIX at 40 (green circle on the chart) are pretty silent about the VIX now.
/jlne.ws/42vdJTs
Huge VIX Volumes
Cboe (Video)
In #Vol411, Scott Bauer @cboesib talks about volatility remaining rangebound, recent behavior of the 1-Day Volatility Index #VIX1D and the most heavily traded equity #options. $VIX #futures
/jlne.ws/44Rf1K2
| | | | | | Education | | | What's Short Selling? Inside Hindenburg Research's Strategy
Lisa Pham, Jennifer Surane and Phil Serafino - Bloomberg
If you buy low then sell high, chances are you'll be richer and everybody will be happy. But reverse the trades with borrowed stock â what's known as short selling â and you may be rich, but odds are that quite a few people will be displeased. Critics say that short sellers distort the market and that their practices can blur into market manipulation. "Shorts" say they're keeping markets and companies honest. A series of negative reports from a short-selling firm, Hindenburg Research, have added fuel to the fire, as it targeted Carl Icahn's Icahn Enterprises LP and companies affiliated with Indian billionaire Gautam Adani and Twitter co-founder Jack Dorsey.
/jlne.ws/3VSDESJ
| | | | | | Miscellaneous | | | Man Group Appoints its First Female CEO in 240 Years; Robyn Grew, the firm's president, to take over on Sept. 1; Anne Wade set to become its first female chairman this year
Nishant Kumar - Bloomberg
Man Group Plc has appointed its first female chief executive officer in its 240 years of existence. Robyn Grew, 54, will take over from Luke Ellis, 60, who is stepping down from the helm of the world's largest publicly listed hedge fund firm on Sept. 1, according to a statement Thursday. Grew, who joined Man Group in 2009 and is currently its president, will move to the UK for the role but will continue to spend a substantial proportion of her time in the US.
/jlne.ws/44UNVSj
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