| July 25, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Gary Flagler Talks Up Growing Interest in MexDer Markets at IDX with JLN's Julie Ros
JohnLothianNews.com
Gary Flagler, the head of international business development at MexDer, was interviewed by JLN Correspondent Julie Ros at the FIA International Derivatives Week (IDX) in London in June about the growing interest in trading in Latin America and South America.
He spoke about the various uses of the Mexican peso by various market players and countries to hedge risk because of the liquidity in the peso.
Watch the video »
| | | | | | Lead Stories | | | Options Traders Wager on Fastest Ever U-Turn From the ECB
James Hirai - Bloomberg
Traders in the options markets are betting the fragility of euro-zone economy will force the European Central Bank into its fastest ever monetary-policy U-turn.
Money-market pricing points to two more rate rises â a 25 basis point hike this week, while odds favor a further increase to a record-high 4%. But options markets â which give investors a cheap way to wager on alternative outcomes â suggest there won't be a second hike, and cuts could come as soon as September to avoid too harsh a blow to growth.
/jlne.ws/3rL8SQR
Short-Term Commodity Options Trading Jumped 30% Annually Since 2020, CME Says
Tarso Veloso Ribeiro, and Isis Almeida - Bloomberg
Commodity investors are following a hot trend in equities trading, using short-term options to bet on events from jobs and crop reports to OPEC meetings.
Trading in commodity contracts that expire weekly jumped an average of 30% annually over the past three years, according to data from CME Group Inc., the US's largest derivatives exchange. Volumes were led by a 50% average increase a year in energy in the 2020 to 2023 period, followed by metals and agriculture.
/jlne.ws/3OtguA5
Hedging Has Never Been So Cheap
Eric Wallerstein - WSJ
After a record rally in stock prices, it might seem prudent to hedge your bets. Good news: Doing so has never been cheaper.
It has never cost less to protect against a stock-market slide, according to BofA data back to 2008. That's based on the price of put options that would payout if the S&P 500 fell 5% in the next year.
/jlne.ws/3OvT9ht
JPMorgan stays bearish on the stock market and warns that an AI bubble is brewing amid record concentration in mega-cap stocks
Matthew Fox - Business Insider
In a Monday note, he warned that the hype around artificial intelligence is brewing a bubble in the stock market that probably won't end well for investors. The bubble is evidenced by the fact that stock concentration in the S&P 500 is at 60-year highs, as the top seven companies make up more than 25% of the index.
That concentration was particularly strong in the Nasdaq 100, which was recently forced to undergo a special rebalance after the mega-cap tech companies made up more than 50% of the index.
/jlne.ws/3O2MdH0
Citadel Securities Trading Revenue Slides 35% on Muted Market
Paula Seligson, and Katherine Doherty - Bloomberg
Citadel Securities' first-half net trading revenue slid 35% from last year's volatility-fueled surge as the trading firm founded by Ken Griffin seeks to compete with the big banks.
The market maker generated $2.73 billion in revenue in the first six months of this year after a record $4.2 billion haul in the first half of 2022, according to people with knowledge of the matter. The figure has exceeded $1 billion for 14 straight quarters, the people said, asking not to be identified disclosing private information.
/jlne.ws/3q6Y5jl
Markets Are Already Trading as If Fed Rate Increases Are Over
Emily Graffeo - Bloomberg
Wall Street is so convinced that the Federal Reserve's restrictive policies are nearing an end
that money managers are already trading as if rate hikes were a thing of the past.
JPMorgan Asset Management is plowing into equities and at least one Invesco fund has done an about-face from its previous cautious positioning. DataTrek says investors are now betting on individual stocks instead of trading on macro themes.
/jlne.ws/474d3qU
| | | | | | Exchanges | | | Viewpoint - Top issues driving FIA's work in the second half of 2023
Walt Lukken - FIA
Time is a funny thing. When we were kids, it moved at a snail's pace. Days lasted forever and we even had this concept called boredom.
As we get older, time seems to speed up - especially when looking backwards. For example, I can't believe I have been at FIA nearly 12 years or that I'm approaching 30 years of living in D.C. I'm still a Hoosier at heart, but truth is I'm now a Washingtonian.
/jlne.ws/3pXEd2b
| | | | | | Regulation & Enforcement | | | EU Stablecoin Issuers With Bank Assets in Reserve Will Get Extra Regulation, EBA Draft Says
Jack Schickler - CoinDesk
European stablecoin issuers would face extra rules if their reserves have a lot of derivatives or covered bonds under draft rules circulated by the European Banking Authority Monday. New laws known as the Markets in Crypto Assets regulation (MiCA) mean any stablecoins deemed to be overly connected to the financial system face extra capital requirements and centralized supervision by the European Union (EU).
/jlne.ws/3Y8qT7z
Will SEC regulation and FTX suits cause more insurers to consider cryptoassets?
Michael L. Zigelman and Andrew Ioannou - Reuters
July 25, 2023 - In the fall of 2008, as the nation grappled with the consequences of what was generally considered the most severe financial crisis since the Great Depression, many questioned whether the traditional financial system best served their needs. With the extraordinary aftermath of the crisis, the seeds of the digital asset market were initially planted, when a person, or persons, using the pseudonym "Satoshi Nakamoto" published a Bitcoin whitepaper.
/jlne.ws/43EVwmo
| | | | | | Strategy | | | How to Trade Volatility: An Introduction
Nasdaq
Volatility is a statistical measure of the degree of variation in the price of a financial instrument over time. While volatility of a financial instrument is often seen as a risk, it can also present opportunities for those who understand how to navigate its fluctuations. This article aims to provide an introductory guide for investors interested in trading volatility and making informed decisions in dynamic market conditions.
/jlne.ws/3Og6GbE
| | | | | | Education | | | Investment masterclass: WTF are ETFs?
Claer Barrett - Financial Times
The world of investments is unhelpfully full of three-letter acronyms. And if you've been looking into investing in the past few years, you can't have missed one that comes up time and time again. I'm talking about ETFs or exchange traded funds. Buying into one has been one of the biggest investment trends of the past decade. But if you're thinking ETF, WTF, what are they? Then keep listening. Welcome to Money Clinic, the weekly podcast from the Financial Times about personal finance and investing. I'm Claer Barrett, the FT's consumer editor.
/jlne.ws/3O9w42x
Your Index Options Questions, Answered
Kevin Davitt - Traders Magazine
Life is good. We are so fortunate to have knowledge tools like search engines. I think about the Library of Alexandria in Egypt, which was a repository of information for the ancient world. I think about the Book of Kells in Trinity Library in Dublin.
These were homes to documents that preserved the collective knowledge of humankind throughout history. That's now digital and available to essentially anyone with internet access. It's mind-blowing.
/jlne.ws/47gFRN8
| | | | | | Miscellaneous | | | Elon Musk to appeal loss in SEC case to Supreme Court
Jonathan Stempel - Reuters
Elon Musk plans to ask the U.S. Supreme Court to consider whether the Securities and Exchange Commission overstepped its authority in enforcing a consent decree that he has called a "muzzle" on his free speech.
Musk would be appealing a decision by the 2nd U.S. Circuit of Appeals in Manhattan to uphold the decree, which arose from his August 2018 tweet that he had "funding secured" to take his electric car company Tesla (TSLA.O) private.
/jlne.ws/478bcS7
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