| December 08, 2020 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Emerging-Market Bulls Reveal Themselves in U.S. Options Trades
Joanna Ossinger - Bloomberg
U.S. options have been showing more bullishness about emerging markets, and some strategists say they may be a good place to bet on further gains.
On the iShares China Large-Cap exchange-traded fund, a measure of how expensive bearish options are versus bullish ones fell to the lowest level since July 2015. Susquehanna strategist Chris Murphy on Monday highlighted trades this week and last that bet on an advance in the iShares MSCI Brazil ETF in the next few months, with a trade in March options seeing some gains through the first quarter, and one last week in January call spreads. Credit Suisse Group AG suggests placing bullish February call spreads on the iShares MSCI Emerging Markets ETF overall.
/bloom.bg/3gCFCSJ
How One Bitcoin Options Trader Turned $638K Into $4.4M in 5 Weeks
Omkar Godbole - Coindesk
In the run-up to the 2017 market peak, stories abounded of traders who bought bitcoin in the spot market just a few months before only to cash out to the tune of hundreds of thousands, if not millions, of dollars.
The days of tripling or quadrupling your money in just a week or two just by buying bitcoin may be behind us. But since those heady days of three years ago, the crypto derivatives market has taken up the mantle of being the place where astonishing returns can occasionally be had by taking huge risks.
/bit.ly/3grOVVe
How One Country's Ban Saved Short Sellers From Themselves
Shuli Ren - Bloomberg
During the March selloff, markets sensitive to global business cycles scrambled to ban short selling. When I wrote an article agreeing with South Korea's six-month ban, I got quite a bit of push-back. "Short-sellers aren't driving markets down, it's long sellers exiting their positions," wrote one reader, who normally likes my columns.
Our savvy investor was right. Such a ban can hurt sentiments. Non-Korean long-short funds, for instance, need to hedge, or they can't be in that country's marketplace at all. But Covid-19 has thrown up all sorts of weird surprises. In fact, these days, it's almost better not to be tempted with too many options. Sit tight or stay out; otherwise, you might just find yourself busy short covering.
/bloom.bg/3lWsclr
British Pound (GBP USD) Traders Drop Brexit Hope and Brace for Any Outcome
Bloomberg
Pound traders who were jolted by the reality that the U.K. could leave the European Union without a trade deal are repositioning ahead of crisis talks in Brussels.
The relative cost of hedging against a weaker pound over the next week is now the highest among the world's major currencies. Over the next month, it's second only to the Turkish lira. And the jump in the currency's one-week implied volatility this quarter is almost triple its nearest contender.
/bloom.bg/3oE7vMV
****JB: Also see the Financial Times' story, Sterling traders brace for volatility as EU-UK deal hangs in balance and Reuters' Pound volatile after deal Irish border as trade talks continue.
Watch this signal to see if the rally can continue, strategist says
Steve Goldstein - MarketWatch
What was notable about Monday's action in U.S. stock markets wasn't so much the move â a modest 0.2% drop for the S&P 500 â but the sector composition. Energy, real estate, financials, and materials, the sectors beaten up by the COVID-19 pandemic but gaining ground on the good vaccine news, led the downturn as California introduced new COVID-19 rules, while safer utilities and technology companies advanced.
/on.mktw.net/37P0l1g
Tesla retreats from record highs after announcing share sale of up to $5 billion
Matthew Fox - Markets Insider
Tesla shares retreated from all-time-highs on Tuesday after the electric vehicle manufacturer announced a $5 billion "at-the-market" share offering.
The offering came a day after Tesla crossed $600 billion in market value, making it the sixth largest publicly listed US company, ahead of Berkshire Hathaway and behind Facebook.
/bit.ly/3oAquaY
| | | | | | Exchanges and Clearing | | | A New Volatility Index Offers An Expanded View Of Options
Eric Leininger - CME Group (via Yahoo Finance)
Thirty-day implied volatility is a liquid and sensitive part of the volatility surface and is closely watched by market participants. Traditionally it has been difficult to easily see 30-day implied volatility as options decay or drift towards maturity.
CME Group's new CVOL indexes completely capture constant 30-day implied volatility and clarifies it through a unique prism that generates new sets of robust volatility indices.
/yhoo.it/39RhQke
Analysis: Exchange operators embrace sustainable investing, with an eye on Biden
John McCrank - Reuters
With money pouring in to assets linked to sustainable investing, exchange operators have increased their focus on Environmental, Social and Governance (ESG) business opportunities, which could get a boost from the policies of President-elect Joe Biden.
Exchanges have increasingly been rolling out new ESG initiatives, including data products to help investors understand ESG risks; services aimed at helping corporations analyze ESG best practices, disclose their own practices, and attract capital; and ESG-focused benchmarks and derivatives.
/reut.rs/39UhpFN
Stanford University Economics Professor Susan Athey to Receive CME Group-MSRI Prize in Innovative Quantitative Applications; Panel of leading economists to discuss intersection of markets and COVID-19
CME Group
CME Group, the world's leading and most diverse derivatives marketplace, and the Mathematical Sciences Research Institute (MSRI), announced its 14th Innovative Quantitative Applications Prize recipient. Susan Athey, Economics of Technology Professor at Stanford Graduate School of Business, is the 2019 CME Group-MSRI Prize winner for her work in the economics of digitization and marketplace design. A virtual event honoring Athey will be hosted by CME Group on Dec. 11, 2020 at 10:00 a.m. CT.
/bit.ly/3oBmGGK
| | | | | | Strategy | | | How to Invest in Gold; Many on Wall Street recommend having at least a small portion of a portfolio invested in gold.
Amrith Ramkumar - WSJ
Gold is an alternative to stocks and bonds that many investors use as a safe haven: an asset that can hold its value during times of market volatility or economic uncertainty. There are several different ways you can invest in gold from futures contracts to exchange-traded funds, and many on Wall Street recommend having at least a small portion of your portfolio invested in the metal through one of these methods.
/on.wsj.com/2JBNOqd
Exxon Stock Is Under Pressure From Activists. Here's How to Play It With Options.
Steven M. Sears - Barron's
Exxon Mobil's bad year could end on a high note for investors.
The oil giant is poised to end 2020 in the crosshairs of an activist investor who is trying to line up major shareholders to urge Exxon (ticker: XOM) to focus on clean-energy investments and cutting costs to save its dividend.
/bit.ly/2Lfe5ed
Is The VIX Volatility Index Forecasting A Major Bitcoin Crash?
Tony Spilotro - News BTC
Bitcoin price is consolidating just below $20,000. As the last confrontation with $10,000 has shown, consolidation below resistance is typically a bullish event. However, with such strong resistance above, the uncertainty surrounding the pandemic, the coming vaccine, and the change of power happening in the United States, there's a recipe for rejection as well.
And while signals are mixed and analysts are divided, the VIX volatility index could be warning of an extremely volatile drop to come.
/bit.ly/37JdEjT
| | | | | | Events | | | CFTC position limits: looking ahead to implementation and compliance
FIA
On 10 December FIA will provide members with a detailed overview of the CFTC's final position limits rule. Panelists from FIA, the CFTC, CME, ICE and Willkie Farr & Gallagher LLP will discuss the development, effective and compliance dates, and requirements of the final rule. Special emphasis will be placed on implementation issues and the expanded role of the exchanges in administering federal position limits and hedge exemptions. The panelists also will respond to questions from the attendees.
- Thursday, 10 December 2020 | 10:00 a.m. - 11:30 a.m. EST
/bit.ly/2VLDyho
| | | | | | Miscellaneous | | | Robinhood Is Losing Thousands of Day Traders to China-Owned Webull
Bloomberg
Even in a year full of surprises on Wall Street, this one stands out: A Chinese-owned brokerage has quietly built one of the fastest-growing retail trading platforms in the U.S.
Webull, founded by Alibaba Group Holding Ltd. alum Wang Anquan, has increased its roster of brokerage clients by about tenfold this year, to more than 2 million, by offering free stock trades with a slick online interface. While that's still a fraction of the more than 13 million at Robinhood, the broker that popularized commission-free trading, Webull says it's been peeling off users from its rival. The company has plans to pursue a big funding round from private U.S. investors and may expand into automated financial advice and money management with a so-called robo-adviser service.
/bloom.bg/3gnOYS6
Investors Say One Thing, Then Do Another. Here's the Proof.
Julie Segal - Institutional Investor
Focusing Capital on the Long Term, a non-profit group of investors and asset managers, has for the first time measured the gap between how long an allocator intends to hold on to an investment compared with how long the money remains committed.
In a report published Monday, FCLTGlobal, as the group is called, said it finally has a hard answer to the question of how much capital is being focused on the long term. The study, called FLCTCompass, follows the money from investors to public and private asset classes, all the way through to the companies that deploy the capital.
/bit.ly/37RCz58
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