| March 03, 2016 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | No big short yet for hedge funds on Brexit
Jemima Kelly and Patrick Graham - Reuters
Hedge funds, whose speculating contributed to the pound's devaluation in 1992, have yet to make major bets on Britain leaving the European Union because few expect it to happen and most doubt a big payout from market moves around the June vote. Asset managers and hedge fund desks at major banks contacted by Reuters said "tail risk" funds which bet on major financial events such as the euro zone's debt crisis or the global credit crash think the risk of a pound meltdown is just too small.
jlne.ws/1Y5KG1A
****SD: And also just too expensive at this juncture options-wise. Current bookmaking odds mentioned in the article are a 1 in 3 chance of Brexit.
Lowest Volatility of Volatility Since May Is Warning Sign - Chart
Blaise Robinson - Bloomberg
The stock rebound has sent the Chicago Board Options Exchange Volatility Index to its lowest level of the year -- and the VVIX Index, which represents its expected volatility, to its lowest since May.
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Foreigners Buy Record Options as Indian Stocks Extend Advance
Santanu Chakraborty - Bloomberg
Global funds are buying the most Indian options on record as the benchmark gauge heads for its biggest weekly gain since December 2011 amid optimism over the federal budget. They bought $635 million of index options Wednesday, adding to the biggest-ever single-day purchase of $704 million made the day before, data compiled by Bloomberg show.
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****SD: This story seems to go hand in hand with one from earlier in the week Successful Traders "Jump Around Where It's Hot"
Cybersecurity, economic volatility and political uncertainty top list of concerns for corporate boards in 2016
Press Release
NYSE Governance Services, a leading provider of corporate governance, risk, ethics, and compliance services for public and privately held companies, along with Spencer Stuart, a global, senior executive search and leadership consulting firm, today released the results of the 13th annual What Directors Think survey, which reflects the opinions of nearly 400 directors.
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****SD: Could have guessed those three.
| | | | | | Exchanges | | | Stock Exchange Prices Grow So Convoluted Even Traders Are Confused, Study Finds
Nathaniel Popper- NY Times
Computer-driven American stock markets have become so complex that at any moment in time more than 800 different pricing possibilities are being offered to trading firms across 12 official exchanges, according to new research attempting to explain the tangled system.
jlne.ws/1Y5DDpN
****SD: Missed this one the other day.
LSE, Deutsche Börse eye French spin-off as part of deal
Philip Stafford - Financial Times
The London Stock Exchange is considering spinning off the French division of its clearing house to help smooth a potential GBP20bn takeover by Deutsche Börse, according to three people familiar with the matter. The UK bourse is also looking at shifting control of a London-based interest rate derivatives business at LCH.Clearnet to Eurex, a clearing operation run by its German counterpart.
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ICE move for LSE could include spin-off of Borsa Italiana
Philip Stafford - Financial Times
A potential bid by Intercontinental Exchange for the London Stock Exchange Group could include spinning off the UK company's Italian business and French clearing arm, say two people familiar with the matter. The Atlanta-based group is exploring divestitures of two eurozone-based assets as it considers launching an offer to rival an all-share merger that the LSE is working on with Deutsche Börse, the German group.
jlne.ws/1Y5Uybv
****SD: Just look at the myriad arrangements: CME, Nasdaq, HKEx and ICE are eyeing this deal to varying degrees; then, depending on who gets LSEG, the industry could see a French clearing spin off, an Italian borse spin off and/or a bunch of permutations regarding LCH.Clearnet. Then again, this is all speculation and the whole thing could still crumble.
Why Chicago's CME would want London Stock Exchange Group
Lynne Marek - Crain's Chicago Business
A potential CME Group bid for the London Stock Exchange Group probably isn't about the futures exchange operator getting into equities but rather extending its reach in its mainstay derivatives business. In addition to its stock exchange, the London group owns LCH Clearnet, which guarantees international trades in swaps through its European base. The group also owns the FTSE Russell indexes, which like other indexes are often linked to exchange-traded contracts (similar to CME contracts tied to U.S. indexes).
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Credit Suisse: Don't rule Nasdaq out of LSE battle
Tim Cave and James Rundle - Financial News
Nasdaq, which a decade ago made an unsuccessful hostile takeover approach for the London Stock Exchange, could team up with another operator and join the potential bidding war for the UK exchange group, according to Credit Suisse analysts.
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CME, Moscow latest to report strong February
Julie Aelbrecht - Futures & Options World
Exchange giants Chicago Mercantile Exchange and Moscow Exchange reported strong results for February 2016, with particularly impressive growth in the Merc's equity products and Moscow's derivatives market. The Chicago Mercantile Exchange Group (CME), the world's largest futures market, reported on Wednesday a record daily average volume of 18.7 million contracts per day in February, up 18 per cent from the daily average in the same month of 2015. A second record was set in its energy market, where the exchange reached a record 2.7 million contracts per day. CME Group options volume averaged 3.5 million contracts per day, up 24 percent on the 2.6 million daily average in February last year.
jlne.ws/1Y5OH67
Tocom, Euronext, Icap also report strong February
Julie Aelbrecht - Futures & Options World
The Tokyo Commodity Exchange, Europe's Euronext and British broker Icap are the latest exchanges to report strong trading growth in February. The Tokyo Commodity Exchange (Tocom) said Thursday its average daily volumes hit last month 128,910 contracts, a 34.5 per cent increase compared to the 108,923 contracts traded in the same month of last year. The exchange's gold standard contract volumes rose to 46,410 contracts, up 40.6 per cent, recording both highest monthly volume and the highest daily average volume in February. The exchange attributed the sharp increase in its gold volumes to the market shifting to safe-haven assets following lower expectation for US rate hikes and a decline in stock prices.
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Intercontinental Exchange reports ICE & NYSE February 2016 statistics
Press Release
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported February 2016 trading volume and related revenue statistics, which can be viewed on the company's investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
jlne.ws/1Y5wV2N
Euronext Announces Volumes for February 2016
Press Release
Euronext, the leading exchange in the Eurozone, today announced trading volumes for February 2016.
jlne.ws/1Y5xZnm
| | | | | | Regulation & Enforcement | | | Dodd-Frank Almost 6 Years Later: Where Are We Now? Energy-Related Derivatives Regulation
Latham & Watkins LLP - JDSupra
In the almost six years since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the US Commodity Futures Trading Commission (CFTC) has, in large part, finalized its rulemakings to implement the new comprehensive regulatory framework for swaps. The CFTC's Dodd-Frank Act rulemakings do impose certain compliance obligations that affect commercial end-users and other unregistered entities  including companies in the energy sector  that transact in CFTC-regulated products to hedge the commercial risks associated with their businesses.
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Stock-Option Changes Could Come in Canadian Budget, Trudeau Says
Josh Wingrove and Gerrit De Vynck - Bloomberg
Canadian Prime Minister Justin Trudeau said his government is still considering how stock options should be taxed, suggesting in an interview changes remain on the table and could be revealed in this month's budget. "We are going through a very rigorous process of looking at all sorts of different options and alternatives for fiscal measures and others, and we'll have a lot more to say about it March 22," Trudeau said Wednesday in Vancouver. "Certainly everything that was in the platform is part of the mix of things we're considering for this budget," he said, when asked directly if stock option changes are still a possibility.
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| | | | | | Strategy | | | Is the Worst Over for Stocks? Being Contrarian Doesn't Always Pay
Steven Russolillo - WSJ
In this turbulent stock market, the benefit of hindsight suggests it pays to be contrarian. But does it really? For decades, many investors have used the American Association of Individual Investors' weekly survey as a sentiment indicator to help gauge the market's next move. Stocks often have had a tendency to do the opposite of how investors say they have felt about the market.
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****SD: I'll tell you one instance where being a contrarian doesn't ever pay  anytime I'm with relatives.
| | | | | | Education | | | The 32nd Annual RMC and Key Indexes - VVIX, SKEW, VIX, SPX, OVX, and WPUT
Matt Moran - VIX Views
On February 29 - March 2 I attended the 32nd Annual CBOE Risk Management Conference at the Hyatt Regency in Bonita Springs, Florida, and I was pleased to view several presentations by excellent speakers, including keynotes by Leo de Bever, PhD, Former CEO, Alberta Investment Management Corp., and by Jim VandeHei, Co-Founder, President, and CEO of POLITICO.
In preparing for RMC, I looked at a number of indexes and charts as shown below.
jlne.ws/1Y5MMP5
Saxo Bank Signs Agreement With CME Group, Pushing Client Education
Jeff Patterson - Finance Magnates
Saxo Bank, a Danish multi-asset service provider, has signed a strategic content agreement with CME Group, one of the world's largest derivatives marketplaces, which will extend CME's educational materials to Saxo Bank's client base, according to a Saxo Bank statement.
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| | | | | | Events | | | CBOE RMC Day 3 Recap
Russell Rhoads - CBOE Options Hub
The final day began at CBOE's Risk Management Conference with a very timely address from Jim VandeHei President and CEO of POLITICO. He offered extensive insight into the current presidential race and this was a timely presentation considering yesterday was Super Tuesday. An interview with VandeHei appears at the CBOE RMC Video Highlights Page.
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