| March 19, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
CFTC Chairman Rostin Behnam Discusses Market Volatility, Data-Driven Culture, and Future Initiatives at FIA Futures Conference
JohnLothianNews.com
At the FIA's International Futures Conference in Boca Raton, FL, John Lothian News interviewed CFTC Chairman Rostin Behnam on topics ranging from the CFTC's reaction to the death of former CFTC Chief of Staff Mike Gill to making the CFTC a more data driven culture to using Little Orphan Annie as the spokesperson for its AI fraud initiatives. The latter refers to the AI announcement I rewrote using ChatGPT as if done by Little Orphan Annie.
Watch the video »
| | | | | | Lead Stories | | | Options traders are reining in their bullish stock-market bets; Data from Nomura indicates investors slightly more worried about potential S&P 500 selloff
Joseph AdinolfiFollow - MarketWatch
Options traders are growing more cautious â but only slightly â as the rally in U.S. stocks recently hit a speed bump.
/jlne.ws/494SpXv
Short Volatility Trades Are Starting to Rule Currency Markets
Alice Atkins - Bloomberg
Betting against volatility has become a profit-minting machine in currency markets. So much so that Wall Street firms say clients are giving up on wagers that go in the opposite direction. That's a seismic shift in the $7.5 trillion-a-day foreign exchange market. The fluctuations that traders historically used to play with have largely vanished as a new breed of algorithmic traders bet markets will remain calm. To the heads of currency derivatives at Bank of America Corp., NatWest Group Plc and UBS Group AG, it's creating a cycle that keeps feeding profits to anyone in favor of ever-smaller swings.
/jlne.ws/4cfZyHn
Rates Volatility Nears 1-Year Low Ahead of FOMC
Mandy Xu - Cboe
Cross-Asset Volatility: Implied volatilities fell across most asset classes last week as CPI inflation came in stronger than expected, reinforcing the Fed's cautious stance. The probability of a June rate cut fell from 65% to 51%, with the market now expecting less than 3 rate cuts this year (~2.8 to be exact, down from ~6 at the start of the year). Interest rate volatility led the decline, with the MOVE Index down 3 nms and falling to near a 1-year low of 97 bps vol. Notably, implied vol for both HYG and LQD hit a 1-year low last week (see Exhibit 1). Gold volatility normalized meaningfully, with GLD 1M ATM vol down over 2 pts to 11.9%. FX volatility came in broadly, led by USDJPY vol which is notable ahead of tomorrow's key BOJ meeting where expectations of a rate hike are building.
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| | | | | | Exchanges | | | Research: Optimising European Listed Derivatives Market Structure
Iouri Saroukhanov - Cboe
The research explores why volumes in European derivatives, particularly options, have stagnated in recent years and what can be done to ignite growth in the future. It is based on a survey and series of interviews with senior executives and trading heads at 57 firms operational in European and US listed derivatives markets across the hedge fund and proprietary trading markets.
Respondents to the survey said that a relative lack of retail trading and the fragmentation of market structure were the key reasons why growth was slower in Europe when compared to the US.
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S&P Dow Jones Indices and B3 Launch the First Implied Volatility Index for Brazil's Domestic Market Based on Cboe's VIX Index Methodology
Financial Times
S&P Dow Jones Indices (S&P DJI), the world's leading index provider, and B3, the exchange of Brazil, today announced the launch of a new implied volatility index, the first to monitor Brazil's domestic market, based on Cboe Global Markets' proprietary Cboe Volatility Index (VIX Index) Methodology.
/jlne.ws/43rlScN
Cboe Global Markets Launches Options on Three New MSCI Indices
PR Newswire
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, announced it has launched for trading Cboe MSCI World Index Options (MXWLD), Cboe MSCI ACWI Index Options (MXACW), and Cboe MSCI USA Index Options (MXUSA). The launch is part of Cboe's deepening relationship with MSCI Inc. (MSCI), a leading provider of critical decision support tools and services for the global investment community.
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Robinhood buys Marex FCM as futures entry takes shape Retail broking giant follows WeBull into futures market
Bernard Goyder - Risk.net
Robinhood Markets quietly acquired a US futures executing broker from Marex at the start of this year, the retail trading powerhouse has confirmed to Risk.net. Marex had a spare futures commission merchant (FCM) entity to offload following its $220 million acquisition of ED&F Man Capital Markets in 2022, giving Robinhood the chance to buy a vital piece of derivatives market infrastructure off the shelf to aid its entry into futures trading. US retail brokers are hoping that retail traders'
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| | | | | | Regulation & Enforcement | | | Hedge Funds Sue SEC Over Dealer Registration in Latest Salvo
Lydia Beyoud - Bloomberg
Hedge funds launched another legal salvo against the Securities and Exchange Commission, this time over new rules requiring some firms to register as dealers in the US Treasuries market. The Managed Funds Association, Alternative Investment Management Association and National Association of Private Fund Managers filed a lawsuit on Monday in federal court in Texas to block the SEC's rules.
/jlne.ws/3IIKlAX
Re: Commodity Futures Trading Commission's Notice of Proposed Rulemaking on Protection of Clearing Member Funds Held by Derivatives Clearing Organizations
Global Association of Central Counterparties
The Global Association of Central Counterparties ("CCP Global")1 is the international association for central counterparties ("CCPs"), representing 41 members who operate over 60 individual CCPs across the Americas, EMEA, and the Asia-Pacific region. CCP Global appreciates the opportunity to respond to the Notice of Proposed Rulemaking on Protection of Clearing Member Funds Held by Derivatives Clearing Organizations2 ("the Proposal" or "NPR") proposed by the Commodity Futures Trading Commission (the "CFTC" or the "Commission").
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FIA urges CFTC to fill gaps in customer protections before approving leveraged direct clearing
FIA
FIA has filed comments with the Commodity Futures Trading Commission on its proposed rulemaking related to the protection of clearing member funds held by designated clearing organizations (DCOs). FIA's letter supports the proposed codification of segregation and additional protections for clearing member property, many of which are in place today at major clearinghouses. However, the letter cautions that the rulemaking is far from sound footing for the CFTC to approve new direct clearing models, such as the leveraged disintermediated clearing model first sought by FTX.
/jlne.ws/3TIfmLE
| | | | | | Strategy | | | YOLO Crowd Bets Nvidia Could More Than Double in Value by Friday; Nvidia calls with a 1,940 strike were actively bought Monday; Stock is trading for almost $885, gained 79% so far in 2024
Elena Popina - Bloomberg
Nvidia Corp., the world's third-largest company by market value, is turning into a casino for the YOLO trading crowd.
Just look at the options activity on Monday, when traders bet that shares of the $2.2 trillion chipmaker will more than double its $885 price â by the weekend. Nvidia is no stranger to triple-digit gains after soaring 231% in 2023 on optimism for its semiconductors used in artificial intelligence technology. But pulling that off in less than a week would be quite a reach, even for the hottest stock in the market.
/jlne.ws/3TFLH5R
| | | | | | Miscellaneous | | | Average annual Wall Street bonus falls to $176,500, in second straight yearly decline; Average bonus shrinks by $3,500, while total bonus pool remains flat at $33.8 billion
Steve Gelsi - MarketWatch
The average Wall Street banker will earn a bonus of $176,500 for 2023, down 2% from last year and the lowest total since 2019, the New York State Comptroller's Office said Tuesday.
/jlne.ws/3TqsraZ
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