| March 27, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Gain Small-Cap Exposure with Options on the Russell 2000 Index
Learn why small-cap indexes like the Russell 2000 have historically outperformed large-cap counterparts, and how an options strategy can help you manage your risk while expressing an opinion on the index.
| | | | | | Lead Stories | | | How Options Hedging for Oil Is Turbocharging Volatility
Bob Henderson - WSJ
Earlier this month, oil suffered its steepest weekly slide in almost three years.
Many market observers believe the move was accelerated by banks and trading firms "delta hedging" options they had sold to oil producersâand that this same phenomenon could also power a price surge.
But why?
/jlne.ws/3npTsza
Qatar to introduce options, futures in new derivatives exchange - regulator
Reuters
Qatar's bourse plans to introduce a new derivatives market that will allow investors to trade options and futures on local stocks and its equity index, the country's financial regulator said on Monday.
The Qatar Financial Centre Regulatory Authority (QFCRA) issued a new regulatory framework for listed derivatives after a three-month consultation with investors and market participants.
/jlne.ws/3JMnwfL
Funds cut bullish CBOT soy and meal bets ahead of last week's price plunge
Karen Braun - Reuters
Speculators last week ended their record selling streak in Chicago-traded corn, but they posted a second consecutive week of heavier selling in soybean meal and, to a lesser extent, soybeans.
However, commodity funds may have accelerated selling across the soy complex late last week as prices plummeted on big trading volumes, a potential sign that bullish soy investors were finally exiting long positions as they had in corn.
/jlne.ws/40CutHg
Fearing credit crunch, hedge funds flee petroleum
John Kemp - Reuters
Portfolio investors sold oil-related futures and options contracts at the fastest rate for almost six years as traders prepared for the onset of a recession driven by tighter credit conditions in the aftermath of the banking crisis.
Hedge funds and other money managers sold the equivalent of 142 million barrels in the six most important contracts in the seven days ending on March 21, after selling 139 million barrels in the week to March 14.
/jlne.ws/3z8TSN5
Black Swan Funds Have a Moment as Investors Hedge Market Doom; Bank crisis fears drive renewed interest in hedging tail risks; Investors take precaution against volatility surge months away
Denitsa Tsekova - Bloomberg
Black Swan funds spend years waiting for markets to crash. Turns out, just a whiff of a crash is enough to juice performance. These options-based strategies that benefit from volatility breakouts are having a great month while the S&P 500 is little changed in March, and widely owned bank shares have been battered, suggesting that a market-wide blowup would lead to big payouts. An actively managed exchange-traded tail-risk fund is up about 4% so far in March as banking turmoil deepens, on course for its second best month since March 2020 during the onset of the pandemic.
/jlne.ws/3ZnWrp0
Morgan Stanley Strategist Says Earnings Are Next Risk to Equities
Sagarika Jaisinghani and Alexandra Semenova - Bloomberg
Morgan Stanley's Michael Wilson â among the most prominent bearish voices on US stocks â says turmoil in the banking sector has left earnings outlooks too high, putting sanguine stock markets at risk of sharp declines.
"Given the events of the past few weeks, we think guidance is looking more and more unrealistic, and equity markets are at greater risk of pricing in much lower estimates ahead of any hard data changes," Wilson wrote in a note on Monday.
/jlne.ws/40jbrpC
| | | | | | Exchanges | | | 21 Largest Stock Exchanges in the World
Ramish Cheema - Yahoo Finance
In this piece, we will take a look at the 21 largest stock exchanges in the world. For more stock exchanges, head on over to 5 Largest Stock Exchanges in the World.
/jlne.ws/40c1EBz
MIAX Exchange Group - Options and Equities Markets - Postponed launch of new miaxglobal.com website
MIAX
The previously announced launch of the miaxglobal.com website in the March 20, 2023 alert has been postponed. The MIAX Options, MIAX Pearl Options, MIAX Emerald Options and MIAX Pearl Equities Exchanges will announce the new launch date in a future alert.
/jlne.ws/3JPDupB
NYSE US Exchanges to Close in Observance of Good Friday
NYSE
In observance of Good Friday, the New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, NYSE National, NYSE American Options, NYSE Arca Options, and NYSE Bonds markets will be closed on Friday, April 7, 2023.
/jlne.ws/3ufM0GZ
The Moscow Exchange reduces the commission on transactions with options by five times
MOEX
The Moscow Exchange is reducing the size of the exchange commission for transactions with margined options on futures contracts and premium options on shares on the futures market.
/jlne.ws/3ZguCyR
| | | | | | Regulation & Enforcement | | | Regulation Best Execution - Ignore at Your Peril
Mark Davies - Traders
Wall Street has worked itself into a lather debating the merits of regulators' proposal to impose retail auctions as part of a broader US stock-trading overhaul. But the SEC's best-execution proposal, largely dismissed as duplicating an existing FINRA edict, could have wide-ranging implications for trading firms in options, bonds, and crypto securities as well as equities - especially since it's one of the proposals most likely to be implemented.
/jlne.ws/3FS5w2x
ISDA Briefing Paper on Post-trade Risk Reduction
International Swaps and Derivatives Association
On March 22, 2023, ISDA published a briefing paper on post-trade risk reduction (PTRR), which explains how these services would significantly strengthen the resilience and competitiveness of Europe's derivatives market if fully deployed. The paper highlights how the benefits of PTRR services are restricted by the clearing obligation under the European Market Infrastructure Regulation (EMIR) and outlines the conditions under which non-price forming output transactions that result from PTRR exercises should benefit from a derogation from the EMIR clearing obligation.
/jlne.ws/3TK4tay
Crypto Giant Binance Hit With US Charges For Breaking Trade Rules
Barron's
A top US markets regulator on Monday charged cryptocurrency giant Binance and its founder Changpeng Zhao for multiple violations, in another move by Washington against the once high-flying sector.
Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), said the charges against Binance, the world's largest crypto exchange, were part of a campaign to "find and stop misconduct in the volatile and risky digital asset market."
/jlne.ws/3LRB0K1
| | | | | | Strategy | | | Market Orders vs. Limit Orders
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop runs through the basics of market & limit order types. #trading #execution
/jlne.ws/3KeExkp
| | | | | | Miscellaneous | | | A Matt Levine Effect?
Paul Connell, William Fallon and Nick Foretek - SSRN
This paper constructs a novel dataset to explore whether Matt Levine's vacation drives market volatility as suggested by readers and Levine himself. It finds that contrary to expectations, Levine's vacations have an (almost) statistically significant effect in the opposite direction: decreasing market volatility. This paper provides a series of potential explanations for this observed market reaction.
/jlne.ws/3JRGhyq
****** We need to start a GoFundMe campaign to send Matt Levine on permanent vacation.~JJL
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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
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
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