| December 17, 2018 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
The Spread - Hiring Notices - 12/14
JohnLothianNews.com
According to Trade Alert's Henry Schwartz, the week of December 17 - 21 will likely see the five billionth option of 2018 change hands. But while we all wait with bated breath for that milestone, JLN has you covered with a recap of some of the week's notable news from the options world.
Watch the video and see the stories referenced here »
| | | | | | Lead Stories | | | OCC Sets New Record with 5 Billion Cleared Contracts to Date in 2018
OCC
OCC, the world's largest equity derivatives clearing organization, today said its total cleared contract volume on behalf of the U.S. equity options and futures industry has exceeded 5 billion for the year. OCC has cleared 5.01 billion total contracts and 4.91 billion options contracts year-to-date, surpassing the previous records of 4.60 billion total contracts and 4.56 billion options contracts set in 2011. The new industry volume record will be finalized at year-end, since 10 business days remain in 2018.
bit.ly/2LoozUD
****SD: I don't find it hard to believe that 2019 will be just as good.
2018: The year volatility came home to roost
Saqib Iqbal Ahmed - Reuters
U.S. stocks are down only slightly for 2018, but that masks a volatile year for investors. Trade-related tensions between the United States and China, weakness in the tech sector, concerns about slowing global growth and jitters about the Federal Reserve marching toward higher interest rates have kept investors on their toes. Daily gyrations for the S&P 500 Index spiked sharply this year and remain near a one-year high. One-month historical volatility - a measure of how much stocks have swung on a daily basis over the course of a month - has risen to 21 percent, up from about 7 percent a year ago.
/goo.gl/jaoxQS
****SD: Do swans roost?
The Big Interview: Peter Maragos
Hayley McDowell - The Trade
The chief executive of Dash Financial, Peter Maragos, discusses targeting growth in the US equities market and gives his views on the importance of order routing transparency, as well as the rebate debate.
/goo.gl/ZYm5c6
Pat Arbor: 'I'm kind of doomed,' says ex-CBOT chairman, jailed for months in divorce fight
Mark Brown - Chicago Sun Times
A year ago, Patrick Arbor was living the good life of a wealthy American expatriate in Lugano, Switzerland, taking his meals on the patio of his condo overlooking a picturesque alpine lake and planning his next trekking adventure in the mountains beyond.
bit.ly/2QuN602
****SD: Also from the Chicago Sun Times - Ex-wife on former CBOT chairman: 'I find his behavior replicates the devil'
Pound Pundits Believe the U.K. Is Unlikely to Exit EU by March
Charlotte Ryan - BloombergQuint
Currency strategists are starting to doubt that the U.K. will exit the European Union by the end-March deadline.
The market is focusing on a potential extension to Article 50 and an eventual deal or second referendum, rather than a no-deal scenario that would see the pound crash, strategists say. Still, that leaves little conviction for the pound to rally in the short term given the political uncertainty. Article 50 of the EU's Lisbon Treaty offers member states guidance on how to start the process of leaving the bloc.
/goo.gl/gPXBaV
****SD: It's like when one of the Stooges is trying to go somewhere with a 2x4 and keeps turning around and whacking everybody else in the head.
Recent market 'jolt' will be first of many as easy money era ends, says BIS
Tommy Wilkes - Reuters
Recent sharp selloffs across global financial markets are probably the first of many, as investors adjust to a world of tighter monetary conditions and the threat of economic downturn, the Bank of International Settlements said on Sunday.
/goo.gl/AC5bph
More than half of S&P 500 stocks are now in a bear market
Philip Van Doorn - MarketWatch
Even after the recent pain in the stock market, the S&P 500 Index is down only 3% in 2018 (excluding dividends). That's not so bad when you consider the benchmark index rose 19% in 2017. Still, more than half of the stocks in the index are in bear-market territory, showing how broad the decline has been.
/goo.gl/6a7CUa
The big question this week: Is the Fed about to completely break this market?
Shawn Langlois - MarketWatch
All eyes will be on the Federal Reserve meeting midweek, as bulls pin their hopes on some dovish words, if not a pause in the rate-hike playbook, to lure buyers back in to this reeling stock market.
It's almost Christmas, after all.
But one way or another, there will be fireworks, according Chris Puplava, CIO at Financial Sense Wealth Management, who says the powwow will likely end the consolidation we've been seeing in the market over the past two months.
/on.mktw.net/2LkmCse
****JB: From Bloomberg - Trump Slams Fed on Eve of Rate Meeting Amid 'Very Strong' Dollar. From Reuters - Wall Street looks to Fed outlook Wednesday for early Christmas gift
For retail investors, F&O trades are no longer a no-no
Pavan Burugula - ET
Mumbai: Small investors are increasingly getting more adventurous and savvier in the stock market. These market participants, who mostly bought shares to make a quick buck till recently, are increasingly punting on the market through the riskier futures and options even as the government and regulators attempt to dissuade retail participation in such products.
/goo.gl/EnGHCt
| | | | | | Exchanges and Clearing | | | Cboe Global Markets Announces Date of Fourth-Quarter 2018 Earnings Release and Conference Call
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world's largest exchange holding companies, today said it will announce its financial results for the fourth quarter of 2018 before the market opens on Friday, February 8, 2019. A conference call with remarks by the company's senior management will begin at 7:30 a.m. Central Time (CT), 8:30 a.m. Eastern Time (ET).
bit.ly/2Lt6LrH
Special trading hours over the holiday season
Eurex Exchange
Please be aware of the changed trading hours over the holiday season and year-end 2018.
This year, Friday, 28 December 2018 will be the last exchange trading day at Eurex Exchange. This is also the last day of the year on which exercises can be done. On Xetra and at the Vienna Stock Exchange there will be shortened trading hours on the last trading day of the year 2018.
Please find below an overview of the shortened trading hours at Eurex Exchange over the holidays and on 28 December 2018.
bit.ly/2LkrayO
| | | | | | Moves | | | Trading Technologies Appoints CEO Rick Lane as Chairman of the Board
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, today announced the appointment of CEO Rick Lane as chairman of the company's board of directors. He succeeds outgoing chairman Harris Brumfield and maintains his responsibilities as chief executive officer.
bit.ly/2Ers8b3
| | | | | | Regulation & Enforcement | | | Barclays, a Hedge Fund and Two Traders' Hidden $400 Million Loss
Jonathan Browning and Mark Burton - Bloomberg
Hedge fund's London lawsuit uncovers trading losses from 2011; Bank had previously denied losses, calling reports 'nonsense'
A hedge fund's lawsuit has unearthed some trading losses that Barclays Plc might have preferred to forget. Two metals traders at Barclays were dismissed seven years ago after racking up losses of $396 million, according to documents disclosed in a court case. The losses -- some of the biggest ever disclosed by a bank in the commodities markets -- were denied by Barclays at the time.
/goo.gl/Xia3KF
****SD: I'm presuming that some of activity that led to these losses was in derivatives markets.
Regulators need joined up thinking to spot derivatives risks -BIS
Huw Jones - Reuters
Regulators should scrutinise clearing houses and banks together to spot financial stability threats from the world's multi-trillion dollar derivatives market, the Bank for International Settlements said on Sunday.
/goo.gl/ab1z9q
Sebi lays down more robust risk management framework for equity derivatives
PTI via Economic Times
Regulator Sebi Monday put in place a more robust risk management framework with regard to margin system for the equity derivatives segment. The framework has been prepared on the basis of recommendation by Sebi's Risk Management Review Committee.
/goo.gl/1BwewW
France asks Engie to take hedging positions over gas price freeze
Reuters
The French government said on Sunday it had asked utility Engie (ENGIE.PA) to take hedging positions to ensure gas prices do not rise until June next year.
/goo.gl/obsovN
| | | | | | Technology | | | Alt Data: A Work in Progress
Ivy Schmerken - Tabb Forum
Banks and investment firms have increased their consumption of alternative data sets, but there are still challenges around selecting the most relevant data for trading purposes. And some professionals admit there are significant challenges to transforming alternative data into actionable insights for investing.
/goo.gl/eqFtgt
| | | | | | Strategy | | | Low Volatility Stocks are the Market's New Winner
Matthew Johnston - Investopedia
Soaring market volatility as the S&P 500 has fallen 11% off highs reached in mid-September has caused investors to rush to low volatility stocksÂand they have been well rewarded. Low volatility funds, although still experiencing declines, are holding up much better. The iShares Edge MSCI Min Vol USA ETF (USMV), which applies a set of risk-control constraints in picking stocks with the smallest average moves, has fallen just 4.5% over the same period, while the purer low-volatility strategy of a fund like the Invesco S&P 500 Low Volatility ETF (SPLV), which has no weight constraints, has fallen just 2.7%.
bit.ly/2LoO08o
| | | | | | Miscellaneous | | | EU Blasts Trump Trade Policy for `Crisis' at WTO, Risk to Growth
Bryce Baschuk - Bloomberg
The European Union's ambassador to the World Trade Organization, Marc Vanheukelen, said on Monday that he had hoped Donald Trump's protectionist promises on the campaign would end before he entered the White House. "Unfortunately," he said, "rhetoric has turned into reality."
"The repercussions of tariffs and other restrictions are being felt at the heart of this organization," Vanheukelen said on Monday at the U.S. trade policy review at the WTO in Geneva. "The multilateral trading system is in a deep crisis and the United States is at its epicenter."
/bloom.bg/2Lkpp4G
It's a Bitter End for Sugar as Investors Line Up for 2019 Losses
Fabiana Batista - BloombergQuint
Sugar is ending 2018 on a bitter note on signs that a price collapse could get even worse next year. Futures have slumped 17 percent this year, a second straight annual loss, as booming global production sparked a supply glut. The one thing that kept the rout from being even deeper: robust demand for ethanol in Brazil, the world's biggest sugar grower and exporter. But now that backstop looks like it's going away.
/goo.gl/4jSywe
Volatility, Brexit and trade: fund CIOs make 2019 predictions
Financial Times
FTfm canvassed the investment chiefs at 10 of the world's largest asset managers, overseeing a combined $21tn, for their 2019 predictions.
/on.ft.com/2Lmdrrn
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