| May 08, 2017 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Market's 'Fear Gauge' Nears 1993 Low
Gunjan Banerji - WSJ
A measure of expected stock volatility, known as Wall Street's fear gauge, slid Monday to its lowest level in nearly a quarter-century, indicating investor comfort with the current market but also raising questions about whether the metric was still a reliable indicator of investor anxiety.
jlne.ws/2pnJBX2
Traders Are Fleeing the Options Market; Falling volumes are raising concerns about the fragility of the options market
Gunjan Banerji - WSJ
Falling volumes and spiraling costs are pushing trading firms out of U.S. options, raising concerns about fragility in a market that investors rely on to protect portfolios.
/goo.gl/GKyhL4
An Exchange Wants to Shake Up How End-of-Day Stock Trading Works
Annie Massa - Bloomberg
As the minutes tick down to 4 p.m. each trading day, a crucial process plays out in the U.S. stock market. The exchange CBOE Holdings Inc. just acquired wants to shake up how it works.
Bats Global Markets, a division of CBOE, is debuting a new way to execute orders during the daily closing auctions, according to a statement Monday. The plan is to siphon off trades that would normally be completed at exchanges owned by NYSE Group and Nasdaq Inc., the two primary places that corporations and ETFs can turn to to get listed in the U.S. Bats says its new system will cost traders less.
jlne.ws/2pnuHQu
***JB: The Bats press release for this can be found below in the "Exchanges" section. Business Insider has a story on it too.
Time to Stop Calling the VIX the "Fear Index"
Barry Ritholtz - Ritholtz.com
Oh no, the VIX broke 10 this week  a brutal stock-market crash and decade-long bear market is all but upon us.
Which leads me to the latest episode in our series 1 of market-indicator debunkings, prompted by the following question: Is the VIX really the market's fear indicator?
jlne.ws/2pnEV3c
Ruffer believed to be mystery investor in major Vix trade
Jessica Tasman-Jones - Fund Strategy
Ruffer is believed to be the mystery investor that has been buying up derivatives connected to the Vix index, indicating fears of a major market correction.
A single buyer is believed to be behind a series of trades over a number of months that always cost around $0.50 and now total $120m - approximately 8.5 per cent of the open interest in the niche area of the derivatives market, the Financial Times reports.
jlne.ws/2pnNz1G
Stock market implied volatility hits record low
Joe Ciolli - Business Insider
US Republicans just passed controversial healthcare legislation. France just elected a new president. Yet equity investors have never been this calm.
Expected price swings in the S&P 500 are at a record low, which implies a lack of nervousness and is generally viewed as a bullish signal for the stock market.
Why such a muted response to two seemingly major geopolitical developments? US investors are simply focusing on other, more relevant market drivers  and they like what they see, according to Credit Suisse.
jlne.ws/2pnynl7
Europe exhales, euro eases on Macron win
Vikram Rangala - Nadex Binary Options
Emmanuel Macron's landslide victory over anti-EU Marine Le Pen didn't trigger a rally in the euro, which had been gaining since late April, but global stocks did extend their rally and crude oil halted its slide.
jlne.ws/2pnYpoj
| | | | | | Exchanges and Clearing | | | CBOE leadership turns over, making room for Bats execs
Lynne Marek - Crain's Chicago Business
An out-of-town acquiree is putting its stamp on the Chicago Board Options Exchange, an iconic institution in Chicago business. Old-guard managers at the exchange's parent, CBOE Holdings, are heading for the exits as tech-savvy talent imported via the February acquisition of Bats Global Markets is helping spearhead global growth. Alongside former CBOE Chairman Bill Brodsky, at least seven other top CBOE managers, with a collective 200-plus years at the Chicago exchange operator, left earlier this year.
jlne.ws/2pnXhB5
Bats Announces Alternative to Closing Auctions
Press Release - Bats
Bats, a CBOE Holdings, Inc. company, and the second-largest operator of stock exchanges in the United States, announced today that it is proposing to adopt a new, competitively priced alternative to the primary market closing auctions that take place at the end of the U.S. equities trading day, subject to regulatory approval. The creation of Bats Market Close (BMC), an end-of-day match process for non-Bats listed securities, follows increasing demand from a range of industry participants frustrated by rising closing auction trading fees on other exchanges. In the past five years, closing auction fees have increased anywhere between 16 percent and 60 percent at NYSE and Nasdaq respectively. In the same timeframe, volume executed in those auctions has increased over 70 percent, from 200 million shares per day in 2012 to almost 350 million shares in 2016. As a result, a growing portion of trading is become increasingly expensive for market participants.
jlne.ws/2pnKI8M
HKEX's Market Statistics Pointed Lower in April, Securities Plunge
Jeff Patterson - Finance Magnates
Hong Kong Exchanges and Clearing Limited (HKEX), a Hong Kong-based stock exchange and one of largest in Asia, has released its April 2017 market statistics, which saw its securities and derivatives turnover pointed lower.
jlne.ws/2pnShwq
| | | | | | Regulation & Enforcement | | | Munger Says Fellow Republicans Are 'Bonkers' for Taking Away Bank Regulations
Katherine Chiglinsky - Bloomberg
Charles Munger, the vice chairman at Warren Buffett's Berkshire Hathaway Inc., said the leaders of his political party risk going too far in their efforts to reduce oversight of banks.
"My fellow Republicans -- the ones taking away all this regulation of major finance -- I think that's bonkers," Munger, 93, said Monday on CNBC.
jlne.ws/2pnHmTk
How New Bank Rules Will Buoy Bank Stocks
Matthew Johnston - Investopedia
Last Thursday, the House Financial Services Committee voted in favor of a Republican-backed plan to repeal banking regulations put in place under the Obama administration following the financial crisis. In line with Donald Trump's presidential campaign promises to dismantle the 2010 Dodd-Frank rules, the Financial Choice Act includes legislation that would soften the regulatory requirements currently facing banks.
jlne.ws/2pnSvnj
| | | | | | Strategy | | | This Is What A Lack Of Fear Looks Like
Jay Kaeppel - Investing.com
I keep hearing that investors are "skittish" and "concerned" about the markets and the economy. But recent action in a relatively obscure ETF jumped out at me and seems to suggest that this is not necessarily the case - at least not among those who are active in the markets. From what I can tell, these people don't have a care in the world.
jlne.ws/2pnOLC0
The Option Queen Newsletter
Jeanette Young and Jordan Young - The Options Queen Newsletter
The long-term chart of the VIX cash, not the futures, was range bound from 9.4-10 from 2005-2007, with occasional spikes to 20 or so. For those calling for a market crash based on the VIX's prolonged low levels, we recommend a review of not only a historic chart but also Bob Farrell's "Market Rules to Remember:" "When all the experts and forecasts agree - something else is going to happen."
jlne.ws/1B5Z2pS
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