| February 24, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | If you missed the Trader Options Summit in Partnership with Cboe - Winter 2023, you can watch the whole thing via the YouTube recap video. The collaborative, virtual event was led by a wide range of industry experts and thought leaders, so if you missed it, here is your second chance.
| | | | | | Lead Stories | | | Traders Eye Bearish Bets On The S&P 500, Tesla
Gunjan Banerji - WSJ
The rush for options hedges continued in trading Friday as the S&P 500 tumbled 1.5%.
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'Alameda Gap' Hurting Crypto Market Liquidity After FTX
Vildana Hajric and Muyao Shen - Bloomberg
A bunch of scandals sapped up liquidity in crypto markets last year. But even as prices have recovered in 2023, the so-called "Alameda Gap" has persisted, with liquidity still nowhere near levels notched before FTX collapsed.
Bitcoin market depth is "well below" levels seen in November, the month the now infamous exchange run by Sam Bankman-Fried went under. The quantity of Bitcoin and USDT bids and asks within 2% of the mid-price, as seen across 16 exchanges, hovered around 8,000 this month, about 40% less than in October, according to researcher Kaiko.
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Federal Reserve's favoured inflation gauge accelerated in January
Alexandra White, Jennifer Hughes and Kate Duguid - Financial Times
The Federal Reserve's preferred measure of inflation rose more than expected in January, triggering a Wall Street sell-off as investors weighed the prospect of interest rates staying higher for longer as the central bank fights stubborn price pressures.
The personal consumption expenditures (PCE) price index, which measures how much consumers are paying for goods and services, increased 0.6 per cent month on month, after rising 0.2 per cent in December. The annual rate increased to 5.4 per cent in January from an upwardly revised figure of 5.3 per cent a month earlier.
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Traders Expect Higher Fed Rates After Inflation Data
Matt Grossman - WSJ
Friday's personal-consumption expenditures data is reinforcing bets that the Federal Reserve will bring interest rates significantly higher than most investors expected a month ago.
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| | | | | | Exchanges | | | ICE's Global Commodity and Energy Markets Reach Record Open Interest Across Futures and Options
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced record open interest across its global commodities and energy futures and options markets. On February 22, 2023, open interest hit a record 50.7 million contracts across commodity futures and options, surpassing the previous record set in October 2021. ICE also hit record open interest that day of 46.8 million contracts across its global energy futures and options markets, beating the previous record set in April 2022.
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OCC Welcomes Jefferies Executive Joseph Lewis to Board of Directors
OCC
OCC, the world's largest equity derivatives clearing organization, today announced the appointment of Joseph Lewis, Managing Director, Co-Head of Corporate Hedging and FX Solutions at Jefferies, to its Board of Directors. Lewis brings more than 20 years of experience in interest rate and foreign exchange derivatives. "We are pleased to welcome Joe as he brings a wealth of risk management knowledge and experience in the global derivatives market," said Craig Donohue, OCC Executive Chairman. "He is a widely respected leader with an innovative, forward-thinking mindset, and we will greatly benefit from his counsel as we progress in our transformation efforts, while continuously working to promote stability and market integrity."
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MIAX Wins Multiple Industry Awards for Trading Technology and Innovation
MIAX
Miami International Holdings, Inc., owner of Miami International Securities Exchange, LLC (MIAX ), MIAX PEARL, LLC (MIAX Pearl ), MIAX Emerald, LLC (MIAX Emerald ), Minneapolis Grain Exchange, LLC (MGEXâ¢), The Bermuda Stock Exchange (BSX), and Dorman Trading LLC, announced today that MIAX has been named the "Best Trading Platform" at the Fund Intelligence Operations and Services Awards 2023.
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| | | | | | Regulation & Enforcement | | | U.S. Regulators Warn Banks of Heightened Liquidity Risks in Crypto-Related Deposits
Paul Kiernan - WSJ
A trio of regulators including the Federal Reserve warned banks to be mindful of liquidity risks related to cryptocurrencies, the latest move by U.S. officials to limit the economy's vulnerability to the tumultuous market.
The Fed, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. said in a joint statement Thursday that banks should apply effective risk management when dealing with deposits linked to crypto entities. These include robust due diligence and monitoring of crypto entities that establish deposit accounts, as well as incorporating the potential volatility of those deposits into routine stress tests.
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Australian Markets Regulator Is Reviewing Binance Australia's Derivatives Services
Amitoj Singh - CoinDesk
Australian Securities and Investments Commission (ASIC), is conducting a targeted review of Binance Australia's derivatives business, the regulator said on Friday. The development comes a day after Binance said that it had incorrectly tagged 500 Australian users as "wholesale investors," resulting in their derivative positions being unceremoniously closed. Local regulations do not allow retail traders to trade futures and financial derivatives.
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Ion in the fire: three banks call in lawyers after hack; Banks are examining service-level agreements for possible breaches
Luke Clancy and Costas Mourselas - Risk.net
At least three banks are weighing their legal options over a cyber attack that has disrupted derivatives trading since the end of January, and drawn the scrutiny of regulators and law enforcement agencies around the world. Ion Group, which supplies software used to process cleared derivatives trades, shut down access to some of its services on January 31 after hackers seized control of its servers.
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| | | | | | Strategy | | | Short Is Hot in Credit Markets as Inflation Fears Wipe Out Gains
Tasos Vossos - Bloomberg
Money managers are fortifying portfolios and hedging the risk of a prolonged inflation fight by sticking to credit maturing in just a few years.
Some funds are actively cutting so-called duration, a measure of sensitivity to interest rates, to limit the fallout if central banks keep hiking to tackle inflation. Others are simply focusing on short-dated notes as the additional yield they get from longer securities is too small to justify the risk of a slump when rates rise.
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VIX Index Near January High
Cboe (Video)
In today's #Vol411, Dan Deming @djd551 on $VIX term structure, $SPX implied #volatility and what could impact #markets next week. #options #futures
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| | | | | | Events | | | CTA, IB or SEF?
FIA
The webinar will cover the CFTC Division of Market Oversight SEF Advisory issued in September 2021 and related CFTC enforcement orders including last fall's order against Asset Risk Management, and the practical implications of those actions for CTAs, IBs, and their clients. The speakers will discuss the advisory and enforcement orders in the context of the CFTC's SEF rulemaking, and how the CFTC's actions risk blurring the line between traditional activities of CTAs and IBs, on the one hand, and organized markets, on the other. The speakers will highlight special regulatory issues and compliance challenges now facing CTAs and IBs (along with other CFTC registrants) and their clients. Finally, the speakers will briefly describe SEC and ESMA rulemaking proposals to expand the elements defining certain types of organized markets to encompass use of communication protocols.
/jlne.ws/3KG5IoV
| | | | | | Miscellaneous | | | How does your 2023 bonus measure up?
Claer Barrett and Lucy Warwick-Ching - Financial Times
As investment banks slash their bonus pools, you might not be happy with the size of your payout this year â but many FT readers feel that hanging on to their jobs is the real bonus.
The results of our annual bonus survey show that even the wealthy are managing their personal finances more cautiously as the risk of recession looms. This year, readers are much more likely to be stashing their bonus cash rather than splashing out on luxuries.
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Here's Proof That Stocks Were Never an Inflation Hedge
Michael Thrasher - Institutional Investor
History can't be changed, but Credit Suisse hopes that investors will learn from it.
Since 1999, the Credit Suisse Research Institute has published a guide to historical long-run returns called the Global Investment Returns Yearbook. It partners with the London Business School to create the report, a 272-page highly anticipated finance tome that now covers the performance of major asset classes in 35 countries since 1900.
/jlne.ws/41qFLzy
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