| August 23, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Europe poised for arrival of 'zero-day' options
Nicholas Megaw and Nikou Asgari - Financial Times
A contentious form of derivatives trading that has swept across US markets is spreading to Europe, with the launch of so-called "zero-day" options tracking an index of the continent's largest companies.
Eurex, the derivatives exchange run by Deutsche Börse, will offer daily options that track the widely-followed Euro Stoxx 50 equity index from Monday.
/jlne.ws/44kPFTt
Wall Street blamed zero-day option traders for a sudden stock-market selloff. But a BofA team says they got it wrong.
Joseph Adinolfi - MarketWatch
Did a group of traders in rapidly expiring options recently drag the S&P 500 lower in the final hour of trading? Or has the influence of this booming corner of the options world been exaggerated?
A team of equity-derivative strategists at Bank of America Global Research think it is the latter. In a research report shared with clients on Tuesday, the team argued that the impact of rising zero-day, or "0DTE," volumes has been more benign than many on Wall Street believe.
/jlne.ws/47HzHWt
Ether-Bitcoin Ratio Uptick Fails to Inspire Bullish Positioning in ETH Options
CoinDesk via Markets Insider
The ether-bitcoin (ETH/BTC) ratio rose more than 2% last week, contrasting with its record of taking losses during bouts of risk aversion.
Still, options data tracked by Amberdata show a stronger bearish outlook for ether, with traders hedging against potential price weakness over the one-week, one-, two-, three- and six-month timeframes. Meanwhile, traders remain bullish on bitcoin over the long run.
/jlne.ws/3KS66jp
Nvidia stock options traders are bracing for larger move than usual after earnings
Emily Bary - MarketWatch
Options traders are bracing for an outsize swing in Nvidia Corp.'s stock price after the chip giant's earnings report Wednesday afternoon.
So-called straddle prices in the options market can be used to calculate an implied move for an underlying stock. A straddle is an options strategy in which a trader buys a call option and a put option at the same strike price with the same expiration date.
/jlne.ws/3qLPlzt
NYSE suspends trading of WeWork warrants, to start delisting them
Reuters
The New York Stock Exchange (NYSE) has suspended trading in WeWork's (WE.N) warrants due to "abnormally low" trading price levels and will initiate proceedings to delist them, the flexible workspace provider said on Tuesday.
WeWork, which earlier this month warned about its ability to stay afloat, added that the company's common shares will continue to trade on the NYSE.
/jlne.ws/3qJoJiw
Recession Fears Have Been 'Blown Out of the Water,' Long-Serving Fed President Says
Nick Timiraos - WSJ
James Bullard, who was the longest tenured of the 12 regional Federal Reserve Bank presidents when he stepped down last month, thinks the U.S. economy faces new risks of stronger growth that could require higher interest rates to keep up the fight against inflation in the months ahead.
/jlne.ws/3QRwugP
Bitcoin Owners Sit on Big Losses After the Crypto Selloff. It's a Bearish Sign.
Jack Denton - Barron's
Bitcoin and other cryptocurrencies were little changed Wednesday as the digital asset market steadied after a recent selloff ushered in the biggest one-day decline this year. Amid the current lull, analysts see technical factors supporting a bearish trend.
/jlne.ws/44lRteP
| | | | | | Regulation & Enforcement | | | SEC Is Voting on New Rules for Hedge Funds
Bill Alpert - Barron's
Faced with the wrath of the private fund industry, the Securities and Exchange Commission backed away from a proposal that would have dramatically altered how hedge funds, private equity, and venture-capital firms do business. The reform package, adopted at a Wednesday meeting of the commission, omits many elements that fund managers found objectionable, when the SEC proposed its Private Fund Adviser Rule last year.
/jlne.ws/44o18lk
SFC issues quarterly report
Securities & Futures Commission of Hong Kong
The Securities and Futures Commission (SFC) today published its latest Quarterly Report which summaries key developments from April to June 2023. New initiatives to develop Hong Kong as an offshore renminbi and risk management centre were launched during the quarter. Swap Connect, the first Connect programme for financial derivatives products, commenced northbound trading in May. It allows investors of Mainland bonds to hedge interest rate risks from Hong Kong. As of end-June, a total of 540 Mainland interbank interest rate swap contracts were traded under Swap Connect, with a gross notional amount of about RMB129 billion or a daily average of about RMB3.9 billion.
/jlne.ws/3E7tjKt
| | | | | | Technology | | | Options Data Meets Its Match: Exegy Launches Next-Gen Ticker Plant - The Latest Appliance Is Purpose-Built To Reliably Handle Rising Market Data Volumes And Volatility, Including The Upcoming OPRA Feed Upgrade
Mondovisionie
Exegy, a leading provider of end-to-end, front-office trading solutions for capital markets, is announcing its next generation ticker plant, purpose-built for processing options market data. This cutting-edge platform can process the OPRA feed on a single 2U server and provides an immediate 2x latency reduction compared to the previous generation.
/jlne.ws/44lWJz9
| | | | | | Strategy | | | Worried About Inflation Or Where The Market Is Headed? Warren Buffett Thinks This Asset Class Is The Answer
Benzinga via Markets Insider
Interest rates are likely to continue to rise as inflation remains above levels the FOMC is comfortable with. With continued hikes, the threat of recession and downturn continues to loom. And despite a fairly strong year for US stocks, the last month has seen a reversal with the S&P down close to 4%.
Fear in the market abounds. The CBOE Volatility Index (INDEXCBOE: VIX), often called the "fear" index, is up 25.3% in the last month, while its newer alternative, MIAX's SPIKES Volatility Index (XMIO: SPIKE) is up 20.7% in the same period.
/jlne.ws/45cFulb
Bankruptcies On The Rise
Cboe (Video)
In #Vol411, @JoeTigay gives us reminders about Fed speak and the $NVDA earnings event, lets us know that #NVDA beat its earnings target by 30% last quarter, the tech sector has been experiencing pullback recently and more.
/jlne.ws/3EaVCaQ
| | | | | | Miscellaneous | | | AI Is Managing Some ETFs. It's a Trend That Could SpreadâEventually.
Lewis Braham - Barron's
Artificial intelligence replacing human beings has been the subject of science-fiction books for decades. The distinctly human part that the AI usually can't replace is often the "emotional" one, i.e., the soul.
That's bad news for fund managers who often pride themselves on unemotionally pursuing profit and analyzing financial data objectively, without any all-too-human cognitive biases. They seem prime targets to be replaced by soulless AIs that not only objectively analyze millions of data points per second but also execute an effective investment strategy based on them.
/jlne.ws/3P7Fxbl
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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