| November 30, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Trader Makes $36 Million Options Bet on S&P 500 Stock Rally in December
Lu Wang - Bloomberg
One trader spent about $36 million on a options wager Wednesday that will pay off if the S&P 500 rallies 5% in December.
The trade saw someone purchase roughly 20,000 calls that are linked to the S&P 500 and expire on Dec. 30 with a strike price at 4,175. The transaction was cited by some traders as a reason for the market's brief bounce late in the morning in New York. The benchmark index rose 0.6% to 3,981 as of 1:45 p.m., extending its November advance to almost 3%.
/bloom.bg/3XFSPiJ
FX Traders Ready for Wild Christmas on Fed, China Uncertainty
David Finnerty - Bloomberg
Currency traders hoping to enjoy a quiet run up to Christmas may be in for a shock.
One-month implied volatility for major currency pairs -- a gauge of expectations for FX moves over that period -- are sitting well above their 10-year average for this time of year, according to data compiled by Bloomberg. That means options traders are bracing for another month of large swings in the currency market.
/jlne.ws/3UlH1io
US Recession: Not Enough Evidence for Short, Shallow Downturn
Jennifer Sor - Markets Insider
Predictions for a coming recession are too complacent, and there's isn't enough evidence that a coming downturn will be short and shallow, top economist Mohamed El-Erian warned.
"People are rushing to say, 'don't worry. If we end up in a recession it will be short and shallow.' I say keep an open mind," the chief economic advisor of Allianz said in an interview with CNBC on Monday.
/jlne.ws/3ETZlJS
The S&P 500 could drop 24% within months as earnings gloom reaches a crescendo, Morgan Stanley's investment chief warns
George Glover - Business Insider
The S&P 500 could fall to 3,000 points in the early months of 2023 â the bank's bear case for the period, chief US equity strategist Mike Wilson told CNBC Tuesday.
If the benchmark stock index does fall that low, it would represent a 24% drop from Tuesday's closing level of 3,958.
/jlne.ws/3FeIUt2
US Recession to Ravage Markets in 2023, Stocks Could Fall 24%: BofA
George Glover - Markets Insider
Markets will be ravaged by a recession next year, with the benchmark US stock index potentially falling 24% from its current level, Bank of America has said.
The bank's base case is that the US enters a severe and sustained downturn in the first quarter of the year, when its economists expect growth to fall by 0.4%.
/jlne.ws/3VdwjvP
Oil Prices Are Falling, but Wall Street Isn't Buying It
Bob Henderson - WSJ
Wall Street is bullish on oil. So why are prices falling?
Many oil traders and analysts believe prices over the coming months will far exceed those at which crude can be bought in the futures market now. But prices recently touched their lowest levels of the year, showing how uncertainty, volatility and risk can pry gaps between perceived values and market prices.
/on.wsj.com/3Ufl4Sp
Hedge Fund Treasury Shorts Jump to Multiyear Highs Before Powell
Edward Bolingbroke - Bloomberg
On a 10-year futures equivalent basis, hedge funds short positioning across tenors exceeded 5 million contracts onto fresh multiyear levels, according to data released by the Commodity Futures Trading commission released Monday.
Bearish sentiment also extended into the cash space, where Tuesday's JPMorgan Chase & Co.'s Treasury client survey showed the most net short since Sept. 6 with the fewest outright longs since Aug. 15.
/bloom.bg/3gRLqfC
| | | | | | Exchanges | | | Cboe confirms equity partners for new digital venture; Thirteen firms including Jane Street, Robinhood, Susquehanna and Virtu Financial have purchased minority stakes in Cboe Digital.
Laurie McAughtry - The Trade
Cboe Global Markets today announced the completion of its syndicated minority equity interests with respect to its new Cboe Digital business. Thirteen market participants have taken on an equity stake, representing retail and institutional intermediaries, liquidity providers and brokers including B2C2, DRW, Galaxy Digital, GSR, Hidden Road, IMC, Interactive Brokers, Jane Street, Jump Crypto, Robinhood, Susquehanna International Group, tastyworks and Virtu Financial.
/jlne.ws/3VB63LE
Accountability Levels and Large Trader Reporting Requirements in Connection with the Initial Listing of Tuesday Weekly Options and Thursday Weekly Options on Certain Foreign Exchange (FX) Futures Contracts
CME Group
In connection with the listing of the Chicago Mercantile Exchange Inc.'s ("CME") Tuesday Weekly Options and Thursday Weekly Options on Certain Foreign Exchange (FX) Futures Contracts (the "Contracts") on trade date Monday, December 5, 2022 (see SER-9088 published November 9, 2022), please note in Appendix B of CME Submission No. 22-440 the corresponding aggregation allocations (Rule 559.D.), single month and all-month accountability levels (Rule 560), and reportable levels (Rule 561) for the new contracts.
/jlne.ws/3AYF3xT
Global Derivatives Awards 2022 | European Derivatives Exchange of the Year: Eurex
European Derivatives Exchange of the Year: Eurex
Wave after wave of volatility has battered markets over the last year. Soaring inflation, a shifting rate environment and the return of conflict in Europe. But throughout huge price swings, the Eurex platforms proved a pillar of stability for financial markets. Excelling in terms of scale, integrity and innovation - the firm was a deserved winner of European Derivatives Exchange of the Year.
/jlne.ws/3OPVIcp
| | | | | | Regulation & Enforcement | | | FTX Direct Clearing Plan Was Nowhere Close to Being Approved, CFTC Chief Says
Jack Schickler - CoinDesk
The U.S. Commodity Futures Trading Commission was nowhere close to making a decision on a controversial FTX plan to streamline financial market structure rules, which were proposed before the crypto exchange went bust, CFTC Chairman Rostin Behnam said Monday. In March, FTX's U.S. arm proposed to merge traditionally separate roles of trading and clearing in directly settling certain crypto derivatives contracts, but the empire of then-CEO Sam Bankman-Fried now lies in tatters after CoinDesk revealed an unusually tight relationship between FTX and its trading arm, Alameda Research.
/jlne.ws/3EO6wmP
| | | | | | Education | | | How Does Open Interest Work in Options Trading?
Finance Monthly
Specifically, it tells us if an options contract has low or high liquidity, making it easier or difficult to enter or exit positions.
In turn, open interest tells us which options contracts are preferable to pick in a hectic market. Understanding both helps any trader win market battles. However, there are some important caveats to keep in mind.
/bit.ly/3EJy7FG
| | | | | | Miscellaneous | | | Hedge Fund Hiring Spree Sweeps Big Multistrategy Firms in Asia
Bei Hu - Bloomberg
It's been a rough year for hedge funds in Asia, but that doesn't mean they're all struggling.
Large global and regional funds have been adding people in Asia at a breakneck pace, as volatile markets favor firms that employ multiple strategies and investment teams while smaller local peers underperform.
/jlne.ws/3udcOrn
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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
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