| December 18, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Options Discovery Episode 27: Intro To Options On Futures; Larry Abrams, President Of Absolute Return Capital Management, Discusses Futures Options Trading and More With JLN's Asma Awass.
JohnLothianNews.com
In this episode of Options Discovery, discusses a different type of option: options on futures. This episode includes a breakdown of what options on futures are, benefits they provide, some of the risks present, and more! Asma then sits down with , a former floor trader and current president of Absolute Return Capital Management, and he shares more insight on futures options. You can check out Absolute Return Capital Management here: https://www.arcapmgt.com/
Watch the video »
| | | | | | Lead Stories | | | Option Traders Take Risky Bets on Unusually Calm Indian Rupee
Malavika Kaur Makol and Akshay Chinchalkar - Bloomberg
Currency traders are taking ever more risk playing the unusually calm Indian rupee, selling options that pay them pennies if it stays where it is but exposes them to potentially unlimited losses if it breaks out of its tight range.
The cohort are essentially making a bet that the Reserve Bank of India will continue to keep a tight grip on the currency as it seeks to contain volatility and slow its decline past a record low. But they put themselves at risk of a sudden policy shift, or any external shock that sends the rupee spinning.
/jlne.ws/3NwuuZ3
A $6 trillion cash hoard could fuel more U.S. stock gains as Fed pivots
David Randall, Saqib Iqbal Ahmed and Lewis Krauskopf - Reuters
Investors wondering whether markets can continue their torrid rally are eyeing one important factor that could boost assets: a nearly $6 trillion pile of cash on the sidelines.
Soaring yields have pulled cash into money markets and other short-term instruments, as many investors chose to collect income in the ultra-safe vehicles while they awaited the outcome of the Federal Reserve's battle against surging inflation. Total money market fund assets hit a record $5.9 trillion on Dec. 6, according to data from the Investment Company Institute.
/jlne.ws/3NqraPd
One of Wall Street's biggest bears says the Fed is giving investors a good reason to be bullish in 2024
Joseph Adinolfi - MarketWatch
Did one of Wall Street's biggest bears just turn bullish?
As Wall Street debates whether the powerful rebound in stocks and bonds trading around the world has more room to run, or has already gotten over its skies, Michael Wilson, Morgan Stanley's top equity strategist, is telling clients that the Federal Reserve could be guiding the U.S. economy toward a "sweet spot" for the market.
/jlne.ws/3GOTs1X
| | | | | | Exchanges | | | Options Trading Grows During Non-U.S. Hours
CME Group via Institutional Investor
Since the pandemic, investors have gone through a variety of unprecedented market moving events. Geopolitical turmoil, banking industry crisis, constant recession fears amidst high inflation and the Fed tightening cycle have all underscored the value of risk management in an era of uncertainty.
Hedging in real time and accessing a sufficient liquidity pool when it is needed have become more important than ever. CME Group offers deep liquidity across both E-mini equity index options and E-mini futures outside of traditional U.S. cash market hours, to help investors around the world respond to the market-moving events and news in their own time zones.
/jlne.ws/487R2rl
Making Derivatives More Accessible
Catherine Clay - Cboe
As you likely know, in October I began leading global derivatives at Cboe after several years as the Head of our Data and Access Solutions and Digital. I got my start in this industry as an options trader, so derivatives are not new to me, but Cboe's derivatives business is so large and complex that I knew getting up to speed would be no simple feat. So, I created a 100-day plan that focused on listening and learning, defining our global vision and aligning our strategy. I have been so inspired and motivated by these conversations and am excited to share our vision for Cboe's global derivatives business with you in the coming year.
/jlne.ws/46ZFDZm
ICE Adds Options Data to Cryptocurrency Data Feed
Press Release - The Trade
Intercontinental Exchange, a leading global provider of data, technology and market infrastructure, and Blockstream, a leader in blockchain technologies and financial cryptography, announced the addition of cryptocurrency options data to the Cryptocurrency Data Feed offered via the ICE Consolidated Feed.
Launched by ICE and Blockstream in 2018, the Cryptocurrency Data Feed offers real-time cryptocurrency information and includes data on over 100 cryptocurrencies from more than 30 globally sourced venues and exchanges. As part of ICE's exclusive agreement with Blockstream, ICE offers extensive coverage of prices and order book data for cryptocurrencies by exchange.
/jlne.ws/3RMKk4d
ICE Reports Record Total Futures and Options Open Interest of 86 Million Contracts
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that its global futures and options markets reached record open interest of 86 million contracts on December 13, 2023, surpassing the record last set on June 10, 2021. The record depth of liquidity includes record open interest across ICE's global commodity futures and options markets of 57.5 million, record open interest of 52.7 million across ICE's global energy futures and options markets, and record open interest of approximately 20 million contracts across ICE's natural gas futures markets. Open interest across ICE's commodity and energy futures and options markets is up 21% year-over-year.
/jlne.ws/3tl8xW2
HKEX's chief executive to step down with new succession plans in place; Current CEO announced he will not seek reappointment following the end of his contract in May next year; will be replaced by current co-chief operating officer.
Wesley Bray - The Trade
Hong Kong Exchanges and Clearing (HKEX)'s chief executive, Nicolas Aguzin, has announced that he will not seek reappointment at the end of his current contract in May 2024 - as he steps down after three years in the position. During his tenure, Aguzin has overseen the delivery of a number of significant strategic initiatives, led efforts to promote HKEX internationally, opened new offices in New York and London and helped deliver a series of products and platforms, including the growth in HKEX's derivatives and ETF markets.
/jlne.ws/47gdjlL
Business Continuity and Disaster Recovery Plans Testing and Member Designation Standards
MIAX
Pursuant to Regulation Systems Compliance and Integrity ("Regulation SCI"), 17 CFR 242.100 et. seq. and MIAX Options Rule 321, which is incorporated by reference into both the MIAX Pearl and MIAX Emerald Exchange Rule Books, and thus applicable to Members of both Exchanges, certain Members of the MIAX Exchanges will have mandatory participation requirements in the annual SIFMA Business Continuity Planning Disaster Recovery ("BC/DR") test. Please refer to the following for more information on designation standards and requirements for Designated Members.
/jlne.ws/3v1DTSb
| | | | | | Regulation & Enforcement | | | US Securities and Exchange Commission responds to challenge to new rules by private funds
Chris Prentice - Reuters
The U.S. Securities and Exchange Commission (SEC) on Friday defended its overhaul of rules for private funds, responding in a court filing to a lawsuit from six private equity and hedge fund trade groups. The trade lobbying groups in September sued the top U.S. markets regulator, saying the agency overstepped its authorities when adopting sweeping new expense and disclosure rules. The changes require private funds to issue a swath of new reports and to perform annual audits, as well as disclose certain fee structures.
/jlne.ws/48nMCfU
Position Limits - Government Of Canada Bond Listed Products (All Months)
TMX
The applicable position limits for the Government of Canada Bond futures and options on the Government of Canada Bond futures have been updated and are reflected in the position limit file. The position limit file is retrievable here. The position limits will apply as follows.
/jlne.ws/3RTm8xr
Remarks before the Financial Stability Oversight Council: 2023 Annual Report
Chair Gary Gensler - SEC
Thank you, Secretary Yellen. I thank the staff for their collaboration on the Financial Stability Oversight Council annual report, which I am pleased to support. When we gathered last December, we spoke about uncertain times in the global economy and financial markets-from the war in Ukraine to central banks tightening their policy stances. One year later, unfortunately, the world is experiencing yet another major war. Further, with rising interest rates, we experienced regional bank failures, leading to the extraordinary intervention by the agencies around this table to prevent contagion spreading to the broader economy. In addition, as discussed by this Council as well as in the annual report, there currently is significant leverage facilitated by the relationship between hedge funds on the one hand and banks and broker-dealers on the other. These events once again highlight the importance of our shared work to promote financial stability.
/jlne.ws/3tfWWHR
| | | | | | Technology | | | FIA Tech and Eurex form strategic data partnership for Foreign Security Futures
FIA Tech
FIA Tech, a leading futures industry technology provider, today announced that it has formed a strategic data partnership with global derivatives exchange Eurex. Eurex will begin using FIA Tech's Foreign Security Futures (FSF) data service to evaluate FSF eligibilities effective 31 December 2023 and Eurex will join the Databank Network.
/jlne.ws/3RlWX4U
***** JLN missed catching up with FIA Tech in Asia, but will do so soon.~JJL
JP Morgan and Baton Systems team up to expand CCP coverage for collateral management; Clients of JP Morgan will be able to access an automated collateral optimisation process for cleared derivatives across 13 CCPs globally.
Jonathan Watkins - The Trade
JP Morgan's collateral services team is working with post-trade fintech Baton Systems to enable triparty clients to automate the optimisation of collateral to meet margin calls at a range of clearing houses. Having gone live with the first central counterparty (CCP) in November, the collaboration will enable the roll out of the solution across Baton's network, which currently includes 13 clearing houses across EMEA, North America and Asia.
/jlne.ws/3GO9TM8
| | | | | | Strategy | | | Beware the Most Crowded Trade on Wall Street: Next Year's Soft Landing: Each of the past three years had a similarly strong consensus that proved entirely wrong
James Mackintosh - The Wall Street Journal
At the end of last year, investors thought recession was a done deal. The year before, they thought big tech would be immune to rate increases. And a year before that, they were convinced that paying high prices for stocks popular with the wider public would make them rich.
/jlne.ws/3v3tWDJ
An ETF That Tracks Congress' Stock Picks Is Beating the Market. It Shows the Wisdom of Crowds.
Christian H. Cooper - Barron's
/jlne.ws/3NxjaM9
Options Volume
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop lets us know that Friday's option volume involved roughly 53.5 million contracts traded (which was over 24% above recent average levels), fills us in on notable economic data to look out for this week and more.
/jlne.ws/48620Oe
| | | | | | Miscellaneous | | | Hedge Fund Titan Boaz Weinstein Gears Up For a $240 Billion Crusade; Saba pushing back against 'grotesque behavior,' Weinstein says; Fights are over how to boost share prices in closed-end funds
Yiqin Shen and Vildana Hajric - Bloomberg
In an oft-overlooked corner of the finance industry, Boaz Weinstein is waging perhaps his most ambitious battle yet. Fresh off two legal victories over fund giants BlackRock Inc. and Nuveen, Weinstein - a veteran credit derivatives trader who played a key role in taking down the London Whale - has his sights on upending the $240 billion closed-end fund industry.
/jlne.ws/475qDJw
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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
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