| February 07, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | After Facebook's record daily $251.3 billion face plant on Thursday, Amazon's shares borrowed Jeff Bezos' rocketship to blastoff and gained $191 billion (Billion with a capital B) in a single day, setting a daily record for "the biggest single-day gain in U.S. stock market history," Bloomberg reported. These moves can be called some of the greatest advertising for options trading in the history of the industry. ~JJL
*****
Options Trading sees Big Boom; Cboe to Launch Nanos; BSTX uses Blockchain
JohnLothianNews.com
- "Alex Perry's Optionstopia" takes a look at this week's options news highlights: High Brokerages Earnings; Options Trading Surge; Launch of Nanos by Cboe
- John about Micros and Nanos in John's Take
- Options Term of the Week is Contract Multiplier with Kevin Davitt of Cboe.
Watch the video »
| | | | | | Lead Stories | | | U.S. stock market liquidity 'abysmal,' adding to volatility risk
Saqib Iqbal Ahmed - Reuters
Liquidity in U.S. stocks has fallen to levels last seen during the COVID-19 selloff two years ago, adding to volatility in an already-nervous market.
Market liquidity, or how easily investors can buy or sell a security without affecting its price, has been on a downward spiral for years. In recent weeks, however, traders have been whipsawed by massive moves.
/jlne.ws/35X3uiw
Traders struggle to transact shares in volatile US stock market
Eric Platt and Joe Rennison - Financial Times
Huge swings in US stocks such as Meta, PayPal and Snap this week reflected surprises in their financial results but also point to what investors say has been a dramatic recent decline in the capacity to transact large batches of shares.
Liquidity â the ability to buy or sell an asset without influencing the price â has been a hallmark of the $51tn US equities market. But over the past two weeks money managers have observed its deterioration, with costs increasing to complete large purchases or sales and prompting some to avoid putting on big trades entirely.
/jlne.ws/3sgkYOm
Rate-Hike Bets: Traders Brace for Shock-and-Awe Hikes From Major Central Banks
Greg Ritchie and James Hirai - Bloomberg
A dramatic week of central-bank meetings and economic data has changed the game for global rate-hike bets.
Not only are money-market traders boosting wagers on the number of increases by major central banks, but also the size of each potential move, reflecting the prospect that policy makers will front-load tightening cycles to combat inflation.
/jlne.ws/3urMxHc
US stocks edge lower as traders consider central bank policy direction
Naomi Rovnick - Financial Times
Wall Street stocks edged lower on Monday, following a period of choppy trading, as uncertainty over central banks' next steps spread from global equities and US Treasuries to eurozone government debt markets.
The S&P 500 dipped 0.2 per cent, while the technology-heavy Nasdaq Composite lost about 0.4 per cent after rising in early dealings. Both equity gauges remain significantly lower for the year so far, in response to the US Federal Reserve last month signalling the end of pandemic-era monetary support.
/jlne.ws/3sgWWCE
Arcane Oil Trade Is Latest Indication of Market Ripping Higher
Alex Longley - Bloomberg
In the arcane world of North Sea oil trading, there's a thriving swaps market that values the commodity for every week of the year. Right now it is on fire. Derivatives that price crude for one week ahead -- known as contracts for difference -- are trading at the highest level since at least 2006, according to data from brokerage PVM Oil Associates.
/jlne.ws/3B2XLTA
The Big Tech Show May Be Over. But Volatility Is Not.
Nicholas Jasinski and Janet H. Cho - Barron's
U.S. stocks notched their second consecutive week of gains last week but that fails to tell the full story.
Amazon.com enjoyed the biggest one-day market cap gain in stock market history â $191.3 billionâjust a day after Facebook owner Meta recorded the worst ever daily drop, losing $232 billion.
/jlne.ws/35XOHEj
Stock Market Outlook: Buy the Dip After the Fed's March Rate Hike
Matthew Fox - Business Insider
Investors should hold off on buying the current decline in stocks until after the Federal Reserve's first interest rate hike, according to a Monday note from Bank of America.
The bank's technical analyst Stephen Suttmeier found that stocks have a tendency to sell off in the months immediately after the initial Fed rate hike before eventually moving higher, according to the note. The Fed is expected to raise interest rates to 0.25% from near zero at its upcoming meeting in March.
/jlne.ws/3HzGcx7
| | | | | | Exchanges | | | Cboe's European Derivatives Market Beats Expectations
Shanny Basar - MarketsMedia
Volumes on Cboe Europe Derivatives (CEDX) in January 2022 have overtaken last year after the platform launched in September 2021 and the product suite is being expanded.
CEDX, an Amsterdam-based futures and options venue, launched with clearing provided by EuroCCP, Cboe's pan-European clearing house.
/jlne.ws/3Jb2q8Z
ICE SONIA Hits Record Volume as Investors Manage UK Interest Rate Risk
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that ICE SONIA Index futures and options, the benchmark contract to manage Sterling interest rate risk, hit a single day volume record of 916,964 contracts on February 3, the day the Bank of England's Monetary Policy Committee voted to increase U.K. interest rates from 0.25% to 0.5%.
/jlne.ws/3HKRgHy
SGX reports 1H FY2022 net profit of S$222 million
SGX
Singapore Exchange (SGX) today reported 1H FY2022 adjusted net profit of S$221.8 million (S$228.0 million). Total revenue of S$521.6 million (S$520.8 million) was comparable to the same period last year. Revenue from SGX's underlying core businesses[1] rose 6% to S$501.0 million (S$472.6 million), with higher trading and clearing revenues from equity, currency and commodity derivatives. SGX's fast-growing subsidiaries, BidFX and Scientific Beta, achieved collectively a 20% increase in revenues to S$40.4 million (S$33.8 million), accounting for 8% (7%) of SGX's total revenue.
/jlne.ws/3Gmu5lr
| | | | | | Regulation & Enforcement | | | Archegos Cited in U.S. Watchdogs' Warning About Hedge Fund Risks
Jesse Hamilton - Bloomberg
Hedge funds are getting fresh scrutiny from President Joe Biden's regulators as a potential weak spot in the financial system, and the watchdogs are using last year's collapse of the Archegos Capital Management family office as an example of what can go wrong. The Financial Stability Oversight Council -- a panel of top U.S. financial regulators that includes Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Securities and Exchange Commission Chair Gary Gensler -- agreed Friday to support "an interagency risk monitoring system to identify potential emerging financial stability risks posed by hedge funds" and to consider options for dealing with the dangers as they arise.
/jlne.ws/3rrLGo1
SEC to Tackle Meme Stocks, Cybersecurity Starting This Week
Alex Padalka - Financial Advisor IQ
The Securities and Exchange Commission will start rolling out changes this week aimed at preventing the wild volatility that accompanied trading in so-called meme stocks such as GameStop last year, according to news reports.
SEC chairman Gary Gensler told Bloomberg last week that the commission will consider various policy changes starting this week, including reducing trade settlement times, which currently take two days to finalize.
/jlne.ws/3grcTki
SEC Seeks Comment on Bitcoin ETFs With Submission From Grayscale (GBTC)
Emily Nicolle - Bloomberg
The U.S. Securities and Exchange Commission is seeking advice from the public about whether exchange-traded funds linked directly to the price of Bitcoin could be a vehicle for fraud, highlighting concerns about a submission from one of the biggest trusts holding the token.
The regulator issued a notice on Friday calling for members of the public to submit written comment regarding Grayscale Investments LLC's application to turn its Grayscale Bitcoin Trust (ticker GBTC) into an ETF tied to Bitcoin's spot price. The SEC had done the same a few days earlier in a notice regarding another application to launch a Bitcoin ETF, this one submitted by Bitwise.
/jlne.ws/3HPfEYZ
SEC Chairman Gary Gensler embarks on ambitious regulatory agenda. What it means for investors
Bob Pisani - CNBC
SEC Chairman Gary Gensler and his staff have been very busy lately, and they are about to get busier.
The Securities and Exchange Commission has roughly 50 proposed rule changes it is considering, and a handful that are in a final regulatory stage and could be adopted soon.
/jlne.ws/35PMqL7
| | | | | | Strategy | | | JPMorgan Says Buy Stocks as Interest Rate Hikes Now Priced In
Nikos Chrysoloras - Bloomberg
After a bumpy start to the year, the risks facing global stocks are now priced in, according to JPMorgan Chase & Co.'s Mislav Matejka.
Neither the Federal Reserve nor the European Central Bank will move further into hawkish territory, "at least relative to what is priced in currently," strategists led by Matejka wrote in a note on Monday. Meanwhile, headline inflation is peaking and earnings are likely to surprise positively. "We believe that equities still offer upside, and that the cycle is far from over," they said.
/jlne.ws/3sn8S6b
| | | | | | Miscellaneous | | | Stock Picking Shouldn't Be Allowed for Everyone; Most people who own shares in individual companies don't really know what they're doing. Should the government set more guardrails?
Allison Schrager - Bloomberg
Markets this year are putting the risk in risk premium. Any asset that typically pays more than a low-risk bond (or zero return) will expose you to losses from time to time, and that happened a lot last month. But that's the deal: Risk is the cost of potentially higher gains. Some investors take more risk than others. If you face bigger losses than you can afford and don't get an overall higher return out of it, you need to rethink your investing strategy. And if that describes you, then odds are you own individual stocks. As volatility comes back and the Memestock era ends, it's worth asking: Should retail investors even be allowed to own individual stocks?
/jlne.ws/3B3kmj2
***** Needless to say, I strongly disagree with this view. Whatever happened to "Life, Liberty to Trade Stocks, and the Pursuit of Happiness?" This view, or regulation if it became that, would also push more people into crypto trading and more speculative investments. From a more on the ground perspective, this opposes the view of those young investors in the DAO space who want to be able to invest in start-up companies that are not publicly traded yet, but can't because those investments are for accredited investors only; Allison is espousing more rules like that. ~JJL
A Hedge Fund Just Beat 97% of Its Peers by Ignoring Tech Stocks
Lisa Pham - Bloomberg
This year's slump in U.S. technology stocks has the potential to drive many ESG investors toward Europe in search of better returns, according to a top-performing sustainable hedge fund.
While big-name technology companies such as Facebook owner Meta Platforms Inc. have long been mainstays of ESG funds, there are plenty of European companies that offer more enduring environmental, social and governance attributes, said Donald Pepper, co-chief executive of Trium Capital LLP.
/jlne.ws/34m9Mrm
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