| December 14, 2021 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | FIA: Global Exchange-Traded Volume up 38.8% in November; Open Interest Posts Record
By Suzanne Cosgrove - John Lothian News
The continued investor appetite for equity derivatives helped push global exchange-traded volume higher again in November, according to the FIA's monthly report released on Monday. The group said 6.17 billion futures and options contracts were traded in the month of November, an increase of 11.5% from October and up 38.8% from November 2020.
On a year-to-date basis, volume for the first 11 months of 2021 totaled 56.44 billion contracts, up 33.8% from the total posted in the first 11 months of 2020. For the month of November, futures volume grew by 12.6% from the same period last year, with 2.71 billion contracts changing hands, and options volume was up a steep 69.8% with 3.45 billion contracts traded.
To read the rest of this story, go here.
| | | | | | Lead Stories | | | Stocks' Rough Patch Could End Soon. The Fed's Next Move May Be Priced In.
Jacob Sonenshine - Barron's
Stocks appear to be almost through a difficult stretch brought on by news that the Federal Reserve is removing support from markets and the economy. History tells us that a sustained rally will likely begin soon.
As of Dec. 1, the S&P 500 had fallen 4.1% from the record high it reached on Nov. 18, only to rebound 4.4% to a new closing high of 4712.02 on Friday. Monday, it was slipping back, with a loss of 0.6% by midafternoon.
/bit.ly/3s6LYl0
Meme-stock favorites GameStop and AMC plunge 15% as key technical support fails and shares approach death cross
Matthew Fox - Markets Insider
Meme-stock favorites GameStop and AMC Entertainment plunged about 15% on Monday as both stocks faced a deterioration in technical support levels.
GameStop and AMC Entertainment became heavily owned by retail investors this year after big short-squeezes sent shares to sky-high prices of about $450 and $72, respectively. But as the dust settles from those big price moves, investors are forced to reckon with underlying company fundamentals that remain bleak.
/bit.ly/3GFPbvK
Oxford Economics Warns Bond Yields Could Jump Next Year
WSJ
The Treasury bond market has taken the Federal Reserve's reducing its asset buying with relative calm so far and yields haven't shown a huge reaction. But that could change next year and present a challenging situation for the central bank. "Declining Treasury demand from investment funds raises the risk of higher rates and volatility in 2022, particularly as the Federal Reserve winds down [quantitative easing] purchases," John Canavan, bond analyst at Oxford Economics, writes in a report.
/on.wsj.com/3pQ0pH6
FX options wrap - Poised for action, don't bet the house, 20 billion
Reuters
FX option implied volatility is weighed by the current lack of actual volatility, but the risk premium attached to the impending U.S, UK and Eurozone central bank announcements is limiting overall declines and shows a market still poised for action.
/reut.rs/3pV9sH0
| | | | | | Exchanges | | | November 2021 monthly figures at Eurex
Eurex
Total notional outstanding in OTC clearing grew 15 percent year-on-year
Overall volumes of traded financial derivatives at Eurex were down 5 percent in November 2021 - from 149.5 million to 142.6 million - compared to the same month last year. European interest rate derivatives grew strongly by 26 percent from 39.9 to 50.3 million traded contracts, while European equity index derivatives and equity derivatives contracted compared to the same period last year.
/bit.ly/3s6ANsf
Norwegian Block Exchange lists on Euronext Growth Oslo
Euronext
Oslo Børs, part of the Euronext Group, today congratulates Norwegian Block Exchange on its listing on Euronext Growth Oslo (ticker: NBX).
The company started as a spin-off from Norwegian Air Shuttle (NAS) to introduce cryptocurrency payments to the air industry with the incentive to reduce costs related to payments. It was founded by Bjørn Kjos, who also founded NAS and Bank Norwegian. Today, Norwegian Block Exchange operates a cryptocurrency exchange, custodian and payment system focused on user experience, transparency and security. The company aims to become a hub for financial services and cryptocurrency economy.
/bit.ly/3oSKZCF
| | | | | | Regulation & Enforcement | | | Isda proposes market rules to cover crypto 'disruptions'; Standards setter for global derivatives industry reflects 'unique' quirks of crypto
Philip Stafford - FT
Disruptions unique to cryptocurrency markets will be incorporated into contracts for the global derivatives industry for the first time, in a move intended to broaden digital assets' appeal to institutional investors. Isda, the derivatives trade association, said on Tuesday it was developing common legal standards and templates for derivatives linked to the $3tn crypto market to cover "potential disruption events".
/on.ft.com/3dRts7S
Contractual Standards for Digital Asset Derivatives
ISDA
Digital assets have experienced enormous growth over the past decade to reach almost $3 trillion in market value, and this has been accompanied by an increase in the number and diversity of market participants. As has been the case with other markets, derivatives will play an important role in the digital asset market, facilitating price discovery, increasing liquidity and allowing market participants to hedge.
/bit.ly/30sWQOG
| | | | | | Strategy | | | Opinion: Here's the best way to spot stock-market winners, according to this 25-year tech analyst
Mark S.F. Mahaney - MarketWatch
High-growth tech stocks seem particularly volatile these days, driven high and low by rising and receding fears related to interest-rate rises and COVID waves. It's enough to make the average investor forswear the tech sector.
But please don't fall into this trap. High-growth tech-stock volatility is nothing new. I would know. For the past 25 years, I've covered the Internet sector, which has created some amazing stock market returns - Netflix up 45,000% since its IPO and Amazon.com up 166,000% since its IPO - as well as some downright duds - Blue Apron and Groupon, both down 90% since their IPOs. And along the way I've learned some valuable lessons that you can use when making your own stock picks.
/on.mktw.net/31PXyX2
January 2022 Options Now Available For iShares Trust - iShares Russell 2000 ETF (IWM)
Nasdaq
CONTRIBUTOR - BNK Invest
Investors in iShares Trust - iShares Russell 2000 ETF (Symbol: IWM) saw new options become available today, for the January 2022 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the IWM options chain for the new January 2022 contracts and identified one put and one call contract of particular interest.
/bit.ly/3m4uUbq
Here are the 'key underpriced risks' for junk bonds following a year for the record books
Joy Wiltermuth - MarketWatch
Credit conditions haven't been this loose for U.S. companies in many years, helping fuel the roughly $500 billion record borrowing spree this year in the "junk" or high-yield bond market, according to BofA Global.
But easy borrowing conditions also can make the "market vulnerable to a risk reset," warned Oleg Melentyev's high-yield credit team in its 2022 outlook, particularly if an "overtightening" of central bank policy takes hold or other "key underpriced risks" jolt the roughly $1.6 trillion high-yield bond market.
/on.mktw.net/33v0jgN
Post-Modern Portfolio Theory: Are Put Options More Useful Than Bonds?
Logan Kane - Seeking Alpha
Summary
The main idea behind modern portfolio theory is to maximize your expected return per unit of risk taken.
Critics sometimes dislike this approach, arguing that due to the amount of leverage in the system, market crashes are far more common than would be expected by random chance.
Some high-profile investors, like Paul Tudor Jones, Nassim Nicholas Taleb, and Taleb's former NYU student, Mark Spitznagel, have gotten rich from buying cheap put options that profit from a market crash.
Is buying OTM puts now cheaper and more effective than putting money in bonds? Some investors think so.
/bit.ly/3GIAN5V
Fresh VIX spikes offer persistent opportunities for hedge funds
HedgeWeek
Increasingly frequent spikes in the VIX volatility index could offer hedge funds and other investment managers strong return opportunities amid the resulting equity market gyrations, new analysis published by Man Group suggests.
Probing various trends emerging from the biggest VIX surges over the past 30 years, Man's 'Views From The Floor' commentary noted that four of the top 10 spikes have occurred since the Covid-19 pandemic. At the end of last month, the volatility index soared by some 11 points - a 10-month high - as a result of growing fears over the emerging Omicron Covid-19 variant.
/bit.ly/3s4EUFm
| | | | | | Miscellaneous | | | How to Explain This Weird Job Market
Kathryn A. Edwards - WSJ
The 2021 labor-market story should have been one of a strongâif incompleteârecovery. The unemployment rate fell to 4.2% in November after ending 2020 at 6.7%. The economy gained more than 555,000 jobs a month on average. Although still about four million shy of pre-pandemic levels, the pace of job growth was quick.
Instead, 2021 has been a head-scratcher. Since May, there have been more job openings than unemployed workers. Three million people still haven't returned to the labor force. Quits reached a high in September, when 3% of all workers left their jobs. In September and October, hires were 4.4%âsuggesting an incredible rate of job switching.
/on.wsj.com/3m4LM1J
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