| September 06, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
The Spread: Options Discovery Episode 7: a Guide to IV Rank and IV Percentile; Lex Luthringshausen Breaks Down Implied Volatility and How to Measure It With JLN's Alex Teng
JohnLothianNews.com
In this episode of Options Discovery, Alex introduces different metrics to describe an option's implied volatility. Alex also sits down with long time trader and options expert Lex Luthringshausen in another Options Discovery interview. Lex describes what IV rank and IV percentile are and how traders use them to inform their trades. He also talks about his background and career.
Watch the video »
| | | | | | Lead Stories | | | Odd Dynamics Emerge in Volatility Markets
Gunjan Banerji - WSJ
It's been a weird year for stock volatility.
The S&P 500 has tumbled 18% in 2022. Given the big declines, many traders expect an index that buys options to hedge against selloffs to outperform. That hasn't happened.
/jlne.ws/3D36U1M
Wall Street's Fear Gauge, the VIX, Rises
Hannah Miao - WSJ
Wall Street's so-called fear gauge climbed Tuesday.
The Cboe Volatility Index rose to levels not seen in more than a month as the major U.S. benchmarks alternated between gains and losses. The index, also known as the VIX, tracks expectations for stock swings over the next 30 days.
/jlne.ws/3RJepPA
European Energy Trade Risks Collapsing Over Margin Calls of $1.5 Trillion
Anna Shiryaevskaya - Bloomberg
European energy trading is being strained by margin calls of at least $1.5 trillion, putting pressure on governments to provide more liquidity buffers, according to Norway's Equinor ASA.
Aside from fanning inflation, the biggest energy crisis in decades is sucking up capital to guarantee trades amid wild price swings. That's pushing European Union officials to intervene to prevent energy markets from stalling, while governments across the region are stepping in to backstop struggling utilities. Finland has warned of a "Lehman Brothers" moment, with power companies facing sudden cash shortages.
/jlne.ws/3Bf4dZC
The Market Has Underestimated the Strength of the US Economy
Edward Harrison - Bloomberg
US economic data show that consumers continue to spend and that this spending is backed up by a robust job and wage picture. Forget about being in a recession. If it weren't for inflation, this would be a Goldilocks environment.
The US economy is resilient
Shares are now well below their August highs even as Wall Street appears to have underestimated the resiliency of the US economy. With leading economic indicators pointing firmly lower, the real test for markets still lies ahead. For equities, Goldilocks might be a mild recession followed by a period of slow growth. Anything better will invite an over-tightening that hurts the economy and asset prices.
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Single-Stock Fund Frenzy Sends ETF Issuance to Fastest Pace Ever
Elaine Chen - Bloomberg
Unfazed by the rout in markets this year, the booming exchange-traded fund industry is pumping out new products to US investors at an unprecedented pace -- and with more to come as issuers race to cash in on a new category of single-stock ETFs.
In the first eight months of this year, 273 funds have debuted, exceeding the number of launches during the same period in previous years, according to data compiled by Bloomberg. The amount has eclipsed even the 259 launches in the first eight months of last year, when record flows rushed into ETFs as investors chased a surging bull market.
/jlne.ws/3RkGkVX
Wall Street in the red as Fed worries persist
Sruthi Shankar and Carolina Mandl - Reuters
Wall Street's main indexes fell on Tuesday in a volatile session as traders assessed fresh economic data after the U.S. Labor Day holiday.
A survey from the Institute for Supply Management (ISM) showed the U.S. services industry picked up in August for the second straight month amid stronger order growth and employment, while supply bottlenecks and price pressures eased.
/jlne.ws/3AV5l3d
The Ethereum 'Merge' Has Begun, and Ether Prices Are Popping. Will It Last?
Jack Denton - Barron's
One of the most hotly anticipated events in the world of crypto this yearâperhaps everâhas begun. You can tell just by looking at the market.
Ether prices were outperforming on Tuesday after Ethereum completed a first key step in "The Merge"âa fundamental upgrade to the blockchain network that underpins the world's second-largest cryptocurrency.
/jlne.ws/3D2JAAX
| | | | | | Exchanges | | | Futures, options show more signs of opening-up
SHI JING - ChinaDaily
A green light given to foreign investors regarding investment in China's onshore futures and options market will help elevate liquidity in the domestic derivatives market and provide more asset allocation tools for foreign investors, experts said.
All of the five major Chinese futures exchanges-the Shanghai Futures Exchange, the Zhengzhou Commodity Exchange, the Dalian Commodity Exchange, China Financial Futures Exchange and Shanghai International Energy Exchange-announced late on Friday that qualified foreign institutional investors and renminbi QFIIs are allowed to trade in 23 designated commodity futures, 16 option contracts, and stock option contracts in China.
/jlne.ws/3TLwHBm
Cboe to Launch New, Real-Time Canadian Equities Market Data Offering
CBOE
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announces the launch on September 12 of the Cboe One Canada Feed, a new real-time market data solution that provides high-quality Canadian equities reference quote and trade information. Through a single consolidated feed, the Feed will offer a complete and comprehensive view into the Canadian market with coverage of all Canadian stocks and exchange-traded products.
/jlne.ws/3esydbw
Farmer sentiment improves, but farmers still concerned about rising costs and inflation
CME Group
The Purdue University/CME Group Ag Economy Barometer farmer sentiment index rose 14 points in August to a reading of 117. The rise in the overall measure of agricultural producer sentiment was driven by increases in both the Index of Current Conditions, which rose 9 points to 118 and the Index of Future Expectations, which climbed 16 points to 116. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers' responses to a telephone survey. This month's survey was conducted between August 15-19, after USDA released both the August Crop Production and World Agricultural Supply & Demand Estimates reports.
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CME Group Proposes April 14, 2023 for Fallbacks Conversion of Eurodollar Futures and Options Contracts; Proposal does not apply to Eurodollar futures and options that expire before June 30, 2023; Conversion date aligns with OTC market plans; Market participants invited to provide feedback until September 30; SOFR options to be added to portfolio margining solution
CME Group
CME Group, the world's leading derivatives marketplace, today announced that based on initial client feedback, it is proposing to convert Eurodollar futures and options open interest into corresponding SOFR contracts on April 14, 2023, under the company's previously adopted fallbacks plan. Eurodollar futures and options contracts that expire before June 30, 2023 are excluded from this proposal and will continue to trade until their expiry.
/jlne.ws/3QsHhKU
T7 connectivity options: Implementation of additional options to strengthen the protection of critical information infrastructure; Eurex Circular 085/22 T7 connectivity options: Implementation of additional options to strengthen the protection of critical information infrastructure
Eurex
Eurex will make mandatory changes regarding data transmission via the T7 trading interfaces. These changes implement regulatory requirements as information transmitted via public communication networks is subject to the risk of unauthorized interception, manipulation, or misuse.
/jlne.ws/3KNziXr
Siemens Energy newly included in the DAX; Further changes in MDAX, SDAX and TecDAX
Deutsche Börse Group
STOXX Ltd., the global index provider of Qontigo, has announced changes to the DAX index family effective September 19, 2022. The selection indices DAX, MDAX, SDAX and TecDAX represent the largest companies in the regulated market of the Frankfurt Stock Exchange. They are selected by free float market capitalization and reviewed every three months. In accordance with the Rules Guide to the DAX Equity Indices , the criteria Regular Exit, Regular Entry, Fast Exit and Fast Entry are applied in September.
/jlne.ws/3D1oKSv
| | | | | | Regulation & Enforcement | | | Bed Bath & Beyond CFO who leapt to his death from New York skyscraper faced 'pump and dump' allegation just days earlier
James Rogers - MarketWatch
Gustavo Arnal, the CFO of Bed Bath & Beyond who leapt to his death from a Manhattan skyscraper last week, had faced a "pump and dump" allegation less than two weeks earlier.
On Friday Arnal fell to his death from the 18th floor of 56 Leonard Street, an iconic new skyscraper known as the "Jenga building" on account of its unique design. New York City's medical examiner has ruled the 52-year-old's death a suicide, according to the New York Post.
/jlne.ws/3KYnEJu
FIA responds to independent review of LME nickel market disruption
FIA
On 2 September, FIA responded to an independent review of the nickel market disruption on the London Metal Exchange. The review is being conducted by Oliver Wyman, a consulting firm, on behalf of LME.
In its response, FIA outlined the importance of having robust volatility control mechanisms in place. FIA also emphasised the need for robust and efficient risk management processes, such as the ability to promptly reassess market conditions and potential risks, appropriately monitor concentration, and adjust margin levels in a timely fashion. FIA also noted that its members have raised topics that go beyond the four covered in the review, such as the importance of efficient and effective communication as well as improved transparency of rules regarding trade cancellations provisions.
/jlne.ws/3es5Ie1
| | | | | | Miscellaneous | | | Bed Bath & Beyond names interim CFO following death of predecessor
Alexandra White - Financial Times
Struggling home goods retailer Bed Bath & Beyond named an interim chief financial officer on Tuesday after Gustavo Arnal, who held the post for two years, fell to his death from a New York City high rise apartment building on Friday.
Laura Crossen, Bed Bath & Beyond's senior vice-president of finance and chief accounting officer, will become interim chief financial officer, the US company said in a filing on Tuesday.
/jlne.ws/3TKccFb
Why Bloomberg lives on and on and on and on and on and on
Rupak Ghose - Financial Times
Industry watchers have been predicting the death of the Bloomberg terminal ever since the financial crisis. New technologies. New competitors. Old competitors reinventing themselves. But Bloomberg lives on. It thrives. Why?
Perhaps it is just a bull market, where Bloomberg users are paid astronomical salaries by their employers. Who cares about another 9 per cent increase in Bloomberg fees to keep a trader happy, when they can cost a firm a hundred times or more in salary and benefits.
/jlne.ws/3x0G46u
Return to Office: Wall Street Banks Lead Push to Bring Employees Back
Claire Ballentine and Natalie Wong - Bloomberg
After Labor Day, it's back to the office for Wall Street.
Big banks including Goldman Sachs Group Inc. and Morgan Stanley are clearing the final hurdles for full-time, in-person work, and once again reminding employees that they're wanted in the office. After a few false starts, there's a sense that this time it's for real.
/jlne.ws/3TMlUqD
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