| October 18, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Risky-ETF Crew Grabs Wall Street Limelight With Long-Short Bets; Eight Battleshares ETFs propose to go long and short companies; This may be next evolution of leveraged pair trading: Sohn
Vildana Hajric - Bloomberg
Want to go long Bitcoin-holder MicroStrategy Inc. while shorting megabank JPMorgan Chase & Co.? How about buying streaming giant Netflix Inc. while dumping Comcast Corp.? Or pitting Google-parent Alphabet Inc. against New York Times Co.?
A flurry of potential new ETFs are offering to do all that - and more - as the retail boom for options-powered funds shows no sign of letting up.
/jlne.ws/3NvVmIh
Hedge Fund Regal Indicted in South Korea Short-Selling Sweep; Regal has denied the allegations and considering its rights; Credit Suisse, HSBC, Segantii, Jane Street have faced probes
Harry Brumpton - Bloomberg
South Korean authorities have indicted one of Australia's largest hedge funds for short selling, indicating Seoul has expanded its crackdown on such trading across the financial industry. Regal Funds Management Pty Ltd said it was indicted, along with a former employee, for an alleged violation of securities trading regulation in 2019. The charges follow a market-wide review of short selling by the Korean Financial Services Commission, it said in a statement on Friday. A spokesman for Seoul Southern District Prosecutors Office declined to comment.
/jlne.ws/3BT8QeM
The prime brokerage pie is growing, which means bigger slices for everyone
Jonathan Watkins - The Trade
The prime brokerage industry is back to its best. After a few turbulent years stemming from market volatility, rising interest rates, geopolitical turmoil, inflation, soaring energy prices, client performance, fee pressures, a mini banking crisis, looming regulation, constant tweaking of risk models, rising client complexities and the notorious Archegos saga... well, things are looking up. Not that the seemingly never-ending list of aforementioned market occurrences had noticeably hindered the prime business. The 'one thing after another' era was a thorn in the side for a segment that is particularly sensitive to market forces impacting its clients' appetites for lending and other prime services. But the headwinds have subsided, and the tailwinds have finally arrived in the form of new fund launches, a rise in allocations and increasing returns for funds, not to mention the continuing emergence of multi-strategy hedge funds.
/jlne.ws/3YpjxhL
Ex-Freepoint Gas Trader Sizer Starts Energy-Focused Hedge Fund; Freddie Sizer targets gas, power trading start in January 2026; Increasing volatility in energy markets attracts more funds
Priscila Azevedo Rocha - Bloomberg
Freddie Sizer, a former head of European physical gas trading at Freepoint Commodities LLC, has started to raise money for a new hedge fund that will seek to profit from increasing price swings in the region's energy markets. Europe's power and gas markets have become more attractive to hedge funds in recent years because of a surge in volatility since Russia's invasion of Ukraine as well as a stronger impact of global events on the once mainly regional markets. The jump in renewable energy and more extreme weather are also contributing to wider gaps between highs and lows in prices.
/jlne.ws/3NvrNGL
CDS clearing rates hit 71% high around September iTraxx roll; CFTC data shows tilt away from bilateral settlement mainly in Europe-referencing instruments
Lorenzo Migliorato - Risk.net
The US clearing rate for credit default swaps jumped to a record 71% in the third week of September, coinciding with the roll date for several of Markit's CDS indexes. Derivatives notional of $4.14 trillion was being funnelled through a central counterparty as of September 20, up 31.5% from the previous week. Over the same period, non-cleared notional slid 12.3% to $1.69 trillion.
/jlne.ws/3BIzjeH
Pension fund use of ETFs surges in Europe; Institutional iShares assets under management have been growing at a compound annual growth rate of nearly 30% in the region, according to BlackRock
Emma Boyde - Financial Times
Institutional adoption of exchange traded funds by asset owners such as pension funds and insurance companies has accelerated in Europe since 2020, according to BlackRock's analysis of its own iShares ETF ownership.
There has been a compound annual growth rate of 29 per cent since 2020 in the value of iShares held by the largest European institutions, said Kirst Kuipers, head of institutional iShares sales Emea and head of official institutions sales Europe.
/jlne.ws/3A5FyZO
| | | | | | Exchanges | | | â¬STR Futures - strong liquidity and margin efficiency in one place
Eurex
The â¬STR Futures continue to gain momentum; rising open interest and average daily volumes are clear indicators of growing market adoption. With these trends, Eurex customers benefit from deeper liquidity pools and more robust hedging options. Beyond trading volumes and open interest, cross (product margining is crucial in enhancing efficiencies. By offsetting positions across Euro-denominated fixed income short-and long-term exchange-traded (ETD) and OTC derivatives at Eurex, market participants can reduce their margin requirements, reducing business funding costs.
/jlne.ws/406FraL
| | | | | | Regulation & Enforcement | | | FBI arrests man over SEC hack, alleging bitcoin manipulation
Douglas Gillison, Chris Prentice and Sarah N. Lynch - Reuters
A 25-year-old Alabama man was arrested on Thursday for hacking the U.S. Securities and Exchange Commission's X account this year as part of an alleged conspiracy to manipulate bitcoin prices, U.S. prosecutors said.
In January, a hacker posted false news on the SEC's @SECGov X social media account announcing the agency had approved bitcoin exchange-traded funds, causing the price of the cryptocurrency to spike. The agency quickly disavowed and deleted the post.
/jlne.ws/4hcl9Tp
SEC Charges New Jersey Resident with Insider Trading in His Company's Securities
SEC
The Securities and Exchange Commission today filed charges against Ruimin Xie, a resident of New Jersey, for insider trading in advance of the April 18, 2023 announcement that BELLUS Health Inc. would be acquired by GSK plc. The SEC's complaint alleges that, between April 9 and 11, 2023, Xie-then the Director of Analytical Development at BELLUS Health-learned that GSK was conducting due diligence of BELLUS Health and helped respond to GSK's due diligence questions. The complaint further alleges that, between April 12 and 17, 2023, Xie purchased 7,051 BELLUS Health shares and 100 short-term, out-of-the-money call options that allowed him to purchase another 1,000 BELLUS Health shares. On April 18, 2023, GSK's acquisition of BELLUS Health was publicly announced and the price of BELLUS Health stock rose by approximately 99%, allegedly generating ill-gotten gains of $59,408.42 for Xie.
/jlne.ws/48cC1oW
| | | | | | Strategy | | | The top 2 lessons all options traders should know: Cboe CEO
Madison Mills and Seana Smith - Yahoo Finance (Video)
The options market has seen four consecutive years of record volumes since 2020, and Cboe Global Markets (CBOE) CEO Fred Tomczyk joins Catalysts to discuss the trend.
/jlne.ws/3A8u1J5
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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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| | | Jeff Bergstrom
Editor
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