| April 04, 2016 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
2016 Exchange CEO Series: SGX's Boon Chye Expanding With New Products, New Platform in 2016
JohnLothianNews.com
Loh Boon Chye took over the Singapore Exchange CEO post in July 2015 with a focus on growing the overall business in derivatives, clearing and equities. But he faces headwinds across the asset classes as China's economy slows. Boon Chye, however, believes the exchange is well positioned to move forward in 2016.
SGX has made a name for itself by introducing equity index futures with the Nikkei 225 futures, among others. The exchange now is broadening its China product suite with the introduction of a series of equity derivatives based on MSCI indexes including the MSCI China Free Index. The new product follows the FTSE China A50 futures contract, which ranked 18th among global futures exchange in 2015, and traded 95.8 million contracts last year, up 131 percent from 41.3 million contracts a year earlier, according to the Futures Industry Association annual survey. Watch the video »
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A Word From Gary Katz of ISE On Autism Speaks
ISE
At this year's Options Industry Conference, attendees will be participating in a 5K charity event to benefit Autism Speaks, a charity near and dear to my heart. I have pledged to match all individual donations, dollar for dollar. I invite you to support this event either by participating or donating (any donation amount will be appreciated).
jlne.ws/1Y3W919
**Apologies for the bad link last week on this charity drive. Gary topped $35k over the weekend.
| | | | | | Lead Stories | | | European banks face US capital hit unless rules converge
Financial Times
European banks may be forced to hold another $5bn of regulatory capital to trade equity options in the US unless transatlantic regulators can strike a deal to close a gap in markets rules.
The stark warning from industry executives comes when many worry over further delays among regulators' in completing a framework to monitor some of the world's most actively traded markets.
jlne.ws/1S3Astq
Valeant's Stock Has Plunged, So Where Are All the Shorts?
Trista Kelley and Oliver Renick - Bloomberg
Among Valeant Pharmaceuticals International Inc.'s vocal detractors, short seller Andrew Left of Citron Research played a big role in its almost 90 percent plunge. While the drugmaker's rocky few months stung investors, they have been something less than a triumph for Left's bearish brethren.
jlne.ws/1S3Cx8M
Smart Money Flunks Out With $2 Billion of VIX Bets Unwinding
Joseph Ciolli - Bloomberg
Some of the most popular securities in the equity market have been at the center of some of its most misguided trades.
Consider the last six weeks, when investors poured a record $2 billion into exchange-traded notes that track volatility in the Standard & Poor's 500 Index. The securities, which are bought and sold like stock and appreciate when turbulence rises in the market, lost half their value during the stretch as a rebound in U.S. equities added more than $1.5 trillion to share prices.
jlne.ws/1S3G5aT
Sterling volatility 'gone too far': Deutsche Bank
Financial Times
Perhaps the fretting over the UK's European Union referendum is over-done.
Sterling has been in the firing line of late, in no small part because of nerves that British voters will opt to leave. The decline in the currency's value is one thing, but options are flashing red too. That means traders and investors are braced for serious problems for sterling in the weeks ahead.
jlne.ws/1S3zPjD
Why hasn't Israel shut down binary options scam? A former MK describes how she tried
Simona Weinglass - The Times of Israel
The Times of Israel last month published an investigation into Israel's forex and binary options industry, revealing that much of the industry is fraudulent  a vast, flourishing world of thievery. In the best-case scenario, companies offer gambling disguised as an investment, while in many cases, once customers deposit money they will simply never see any of it again.
jlne.ws/1S3D1LX
****JB: Definition of a slanted article. There is a lot of nuance missing here. That said I do not know how the binary options markets are regulated in Israel so perhaps they are not good there. Which is to say don't blame binary options.
Weekend Review - VIX Options and Futures - 3/28 - 4/1
Russell Rhoads - CBOE Options Hub
VIX closed on the 2016 lows last week and flirted with a 12 handle. I was asked at a seminar in Scottsdale, AZ on Thursday night how long it will take for VIX to touch 12. I responded that I had a hard time seeing a 12 handle this year. It won't take much for me to be proven wrong.
Something that keeps me in the higher volatility regime camp is the relative level of VIX futures to spot VIX. Note below that the April futures are at a hefty premium to spot VIX despite getting the monthly employment number behind us.
jlne.ws/1S3GRVn
TABB Group Research Report on Derivatives Trading Platforms
TABB Group
TABB Group is conducting research on the evolution of Derivatives Trading Platforms in global capital markets. As part of these efforts we are conducting a brief survey to get perspectives on recent trends in the use and deployment of institutional trading platforms. The survey is anonymous and should take less than 5 minutes to complete. All respondents will be eligible to receive a copy of the report when it is published.
We thank you in advance for your time.
/goo.gl/54HNw6
| | | | | | Exchanges | | | CME Group Achieved Record Average Daily Volume of 16.9 Million Contracts per Day in First-Quarter 2016, up 13 Percent from First-Quarter 2015
Press Release - CME Group
CME Group, the world's leading and most diverse derivatives marketplace, today announced that first-quarter 2016 volume averaged a record 16.9 million contracts per day, up 13 percent from first-quarter 2015. CME Group first-quarter 2016 options volume averaged a record 3.5 million contracts per day, up 22 percent versus first-quarter 2015, with electronic options averaging 1.8 million contracts per day, up 26 percent over the same period last year. March 2016 volume averaged 14.3 million contracts per day, up 4 percent from March 2015. Open interest at the end of March was 106 million contracts, up 16 percent from year-end 2015.
jlne.ws/1S3okbJ
ISE Holdings Reports Business Activity for March 2016
Press Release - International Securities Exchange, LLC
ISE's options exchanges combined to represent 16.8% of equity options market share, excluding dividend trades.
ISE's options exchanges reported a combined ADV of 2.3 million contracts.
Dividend trades made up 0.8% of industry volume in March 2016.
jlne.ws/1S3mNm7
CBOE Holdings Reports March 2016 Trading Volume
Press Release - CBOE
CBOE Holdings, Inc. (NASDAQ: CBOE) reported today that March average daily volume (ADV) for options contracts traded on Chicago Board Options Exchange (CBOE ) and C2 Options Exchange (C2), and futures contracts traded on CBOE Futures Exchange (CFE ) was 4.3 million contracts, relatively unchanged from March 2015 and a decrease of 7 percent from February 2016.
jlne.ws/1S3tlRL
MIAX Options Reports March 2016 Trading Activity; Remains #1 in Time at NBBO for Both All Option Classes and Penny Pilot Option Classes for February 2016
Press Release - MIAX
MIAX Options Exchange today announced that over 21.2 million contracts were executed on MIAX Options in March 2016, equating to an average daily volume (ADV) of over 967,900 contracts. The over 21.2 million contracts executed represents a 17.1% increase from the over 18.1 million contracts executed in February 2016 and a 3.8% decrease from the approximately 22.1 million contracts executed in March 2015.
goo.gl/RBNynD
Bats Global Markets, Inc. Announces the Launch of its Initial Public Offering
Press Release - Bats
Bats Global Markets, Inc. ("Bats"), a leading global operator of exchanges and services for financial markets, today announced the launch of its initial public offering of 11,200,000 shares of its common stock by certain Bats stockholders. The initial public offering price per share is expected to be between $17.00 and $19.00.
goo.gl/63pfzc
Bats IPO Could Value Exchange Operator at $1.8 Billion
John Detrixhe - Bloomberg
Bats Global Markets Inc. says its initial public offering may value the second-largest U.S. stock exchange operator at as much as $1.8 billion, more than double the valuation in its failed IPO attempt four years ago.
jlne.ws/1S3oWy9
CHX Announces May 13 Start For SNAP Auctions
Press Release via BusinessWire
Today the Chicago Stock Exchange (CHX) announced plans to introduce its auction products - Participant-initiated on-demand SNAP Auctions as well as Exchange-Initiated SNAP Auctions - starting May 13, 2016.1
jlne.ws/1S3BwgQ
| | | | | | Regulation & Enforcement | | | Debate over IEX hits a bigger SEC speed bump
James J. Angel - MarketWatch
The flap over the IEX exchange application and its efforts to foil high-frequency traders for what it says will benefit everyday investors illustrates both what is good and what is rotten about our current equity-market structure.
jlne.ws/1S3n5cH
| | | | | | Technology | | | Software developer O-Systems mulls entering US binary options market
Juana Wells - SMN Weekly
O-Systems, a binary options platforms and software provider, considers entering into a vendor agreement with Cantor Exchange, which will allow it to offer exchange-traded binary options in the US market, replacing SpotOption which is pulling out of the market, the company said on Friday.
Moreover, O-Systems intends to move all systems to the US market, the company said, without elaborating further on the issue.
jlne.ws/1S3yVDA
| | | | | | Strategy | | | Volatility Update: When fear is low, look out below
Saxo Group
After horrible start of the year, markets have rallied for six consecutive weeks, sending the S&P 500 into positive territory, without even tapping on the breaks. Is this rally sustainable? What should we look for in first-quarter earnings? Find out below as we talk volatility, earnings and strategies.
jlne.ws/1S3F4Qg
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