| April 22, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Virtu Financial CEO Doug Cifu Talks With JLN About Regulation, the SEC, and Spot Bitcoin ETFs at FIA Boca
JohnLothianNews.com
JLN spoke with Doug Cifu, the CEO of Virtu Financial Inc., at the FIA Futures Industry Conference in Boca Raton in March about which market structure problems are the biggest cause of concern right now, the SEC requirement that proprietary traders who deal with government bonds register as broker-dealers, what's driving demand for Bitcoin ETFs, and more.
Watch the video »
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TMX's Luc Fortin Discusses AI Integration and Global Expansion Plans at FIA Conference
JohnLothianNews.com
At the FIA International Futures Industry Conference in Boca Raton, FL, Luc Fortin, president and CEO of Montréal Exchange (MX) and global head of trading of TMX Group, revealed to JLN that TMX is actively exploring the integration of artificial intelligence (AI) into its trading operations. The exchange, which is a prominent player in Canada and the West, views AI as a significant trend worth close attention. The interview was part of the JLN Industry Leader video series, sponsored by Wedbush.
Watch the video »
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New Head of CFTC's Whistleblower Office Highlights Potential Rewards for Reporting Fraud
JohnLothianNews.com
Sixty years ago, Fred Schwed penned "Where Are the Customers' Yachts?" The title was inspired by a tale from over a century ago when a visitor in New York marveled at the lavish yachts owned by Wall Street insiders who profited from dispensing financial advice. This visitor pondered the absence of yachts belonging to the customers themselves, highlighting the stark reality that providing financial advice yields far more profit than receiving it. Today, there are new contenders for lavish yachts; whistleblowers.
Listen to the podcast »
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| | | | | | Lead Stories | | | Jane Street's $1 Billion Trade Puts Spotlight on Indian Options; Case offers rare glimpse into profits at high-speed traders; It's fueling debate on how healthy options boom is for India
Chiranjivi Chakraborty, Ishika Mookerjee, and Abhishek Vishnoi - Bloomberg
The courtroom drama over an Indian options strategy that allegedly made $1 billion for Jane Street Group is drawing fresh attention to one of the world's fastest-growing derivatives markets.
Wall Street has been riveted by the trading firm's suit against two former employees and Millennium Management, after Jane Street claimed earlier this month that they stole a confidential and "immensely valuable" trading strategy. The strategy's focus on Indian options only became clear after lawyers for Millennium inadvertently identified the country in a hearing on Friday.
/jlne.ws/4d91IZx
Ken Griffin's trading firm blasts Trump Media boss as 'loser'; Citadel Securities attacks Devin Nunes after letter to Nasdaq raises concerns over naked short selling
George Steer and Jennifer Hughes - Financial Times
Billionaire Ken Griffin's Citadel Securities has called the former congressman who runs Donald Trump's media business a "loser" after he named the powerful trading firm in a letter suggesting that an illegal form of short selling was responsible for its plummeting stock price. Devin Nunes, chief executive of Trump Media & Technology Group, wrote to the head of the Nasdaq exchange this week "to bring your attention to potential market manipulation" of the company's stock, according to a filing on Friday.
/jlne.ws/448xZvW
****** Don't pull on Superman's cape, don't spit into the wind and don't mess with Citadel Securities.~JJL
Trump Media Suggests Illegal Shorts Are Cratering Its Stock; It's asking Nasdaq to check on 'potential market manipulation'; Shares backing Truth Social trade at about half of recent high
Katherine Doherty - Bloomberg
Trump Media & Technology Group Corp. says an illegal form of short selling might be behind the battering of its stock and it's asking regulators at Nasdaq Inc. to step in. The company backing former president Donald Trump's Truth Social network penned a letter to Nasdaq Chair Adena Friedman asking her to ensure market makers are following rules that prevent "naked" short sales. Trump Media pointed to data that it claims is an indication of "potential market manipulation."
/jlne.ws/446z6fF
New Stock ETFs Offering '100%' Downside Protection Are Coming; Calamos is launching a suite of funds; upside will be capped
Emily Graffeo - Bloomberg
It sounds like a surefire, slam-dunk trade for stock investors playing defense: ETFs that will bet on equity markets without â the pitch says â going down.
Calamos Investments filed Monday for so-called "structured-protection" exchange-traded funds that will track a portion of the returns of the S&P 500, Nasdaq 100 and Russell 2000 while hedging 100% of the downside via the options market, according to a Monday filing.
/jlne.ws/3vULeDV
Bitcoin's Unique Volatility Profile in Focus as VIX and MOVE Spike
CoinDesk via Business Insider
Bitcoin's {{BTC}} price has recently corrected after weeks of unstoppable rally, tracking weakness in U.S. stocks and bonds.
BTC's pullback again stands out, exhibiting little fear or panic compared to stocks and bond markets, where expected or implied volatility indices, often called fear gauges, witnessed notable spikes.
/jlne.ws/4dapgxq
Record Yen Shorts Increase Chances of Sharp, Painful Snapback; Shorts held by hedge funds and asset managers reach record
Yumi Teso and Masaki Kondo - Bloomberg
The yen is facing growing risks it will rebound against the dollar because trader positions betting it will weaken have become stretched, reaching record levels.
Heightened Middle East tensions and speculation Japan may intervene in the market to support the yen are putting pressure on investors to unwind so-called carry trades. Those deals involve borrowing yen cheaply to park money in higher-yielding assets.
/jlne.ws/3xN1kjr
Traders Are Cashing Out of Markets En Masse; Traders just pulled billions out of stocks and junk bonds; Elevated market valuations are now stirring investor angst; Denitsa Tsekova and Isabelle Lee - Bloomberg
The great market rally of 2024 looks dangerously close to unraveling as Wall Street's once-invincible bull brigade begins to withdraw its winnings. With Treasury yields breaking out, Federal Reserve hawks ascendant and Middle East strife flaring, money has just been pulled out of equities and junk bonds at the fastest rate in more than a year. Dip-buyers have been muzzled. The S&P 500 fell every day this week as the top seven tech behemoths closed nearly 8% lower, with equity volatility climbing.
/jlne.ws/3w60zBt
Brokers Woo 'Snowball' Buyers With 40% Returns After China Stock Market Rout; Growing price war threatens to erode brokerages' profits; Some investors have lost faith in derivatives after selloff
Bloomberg News
Chinese securities firms are dangling near record-high returns to lure investors back into the market for derivatives that fueled the nation's stock selloff earlier this year, as fallout from the meltdown cuts deeper into their profits from the business. Two "snowball" products issued last month offered coupon rates of more than 40%, a level unseen since at least 2022, according to data compiled by Galaxy Technologies, which didn't identify the issuers. Five brokerages raised the yields on products linked to the CSI 1000 Index in March from the previous month, while six others including CSC Financial Co. joined the competition to offer snowballs tied to the gauge, pushing a GalaTech measure of the average price to a record high, the data show.
/jlne.ws/3WeZB0B
Hedge Funds Turned Stock Buyers in Volatile Week, Goldman Says; Funds are bullish after three prior weeks of selling
Jan-Patrick Barnert - Bloomberg
Hedge funds are getting back to buying global equities, shrugging off broader market volatility to gobble up tech stocks at the fastest pace in two months, according to Goldman Sachs Group Inc.'s trading desk.
New long positions outpaced short sales last week while single stocks saw "the largest notional buying in over a year," the traders wrote in a note, marking a bullish turn in sentiment after hedge funds had been selling for the prior three weeks.
/jlne.ws/44danWP
Black swan hedge fund says Fed rate cuts will signal market crash
Davide Barbuscia and Carolina Mandl - Reuters
While U.S. financial markets debate the timing of interest rate cuts, one tail-risk hedge fund is warning that investors should make the most of recent economic optimism while it lasts, as a shift to lower rates will signal a dramatic market crash.
"This is a case of be careful what you wish for," said Mark Spitznagel, chief investment officer and founder of Universa, a $16 billion hedge fund specializing in risk mitigation against "black swan" events - unpredictable and high-impact drivers of market volatility.
/jlne.ws/4boLYQP
| | | | | | Exchanges | | | ICE Environmental Contracts Traded the Equivalent of $1 Trillion in Notional Value for the Third Consecutive Year
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced that 2023 marked the third consecutive year where ICE carbon allowance volumes traded the equivalent to $1 trillion in notional value. Trading activity in ICE's global environmental markets is up over 30% year-over-year (y/y) with open interest up 20% y/y. ICE's EU Carbon Allowance (EUA) futures and options, the world's most liquid carbon market and the global benchmark price for emissions, reached record participation throughout 2023 and during Q1 2024.
/jlne.ws/3Ju65AX
| | | | | | Regulation & Enforcement | | | FCA looks for members for its advisory committee on secondary markets
UK FCA
The Financial Conduct Authority (FCA) is looking for expressions of interest from market participants to join our advisory committee. The committee was established in 2022 and we are renewing the membership in line with our terms of reference. The purpose of the committee is to support our work in wholesale secondary markets for equities, derivatives, fixed income and commodity derivatives.
/jlne.ws/4466raB
| | | | | | Technology | | | Commodity traders bet on big data and AI; Sector pushes to harness latest tech tools as competition from hedge funds intensifies
Tom Wilson and Malcolm Moore - Financial Times
The world's largest commodity traders are investing heavily in data processing and analysis in a race to develop a technological edge over rivals. Groups such as Vitol and Trafigura, which traditionally relied on political connections, handshakes and logistical skill to move natural resources from remote locations to willing buyers, are increasingly focused on how to apply artificial intelligence in the most physical of industries.
/jlne.ws/3vUoGTM
| | | | | | Strategy | | | Earnings Season
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop recaps Friday's trading action (option volume was ~29% above recent average levels), today's most active $VIX and $SPX options, and this week's earnings and economic data.
/jlne.ws/3Qa0ofq
| | | | | | Events | | | Join us on April 30 at the Options Industry Conference
OCC
We hope you'll join us on April 30 at the Options Industry Conference for three days of discussions on everything options. Our CEO, Andrej Bolkovic, will join industry leaders for the final panel on Thursday, Embedded Optionality: Shaping the Future of the Industry, to discuss exchange operations, the state of competition, the return of floor trading and resiliency for the next 50 years.
/jlne.ws/4aG8moC
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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
| | | Asma Awass
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