| December 21, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
FIA Asia Conference: Bill Herder Discusses the Evolution of Individual Investor Participation
JohnLothianNews.com
Bill Herder, region director of FIA Asia, sat down with Robert Lothian of John Lothian News at the FIA Asia Conference in Singapore to discuss the growing role of individual investors in the futures and derivatives markets and the impact of technology on this changing landscape.
Watch the video »
| | | | | | Lead Stories | | | Vilified Zero-Day Options Blamed by Traders for S&P Decline; Put trades cited as catalyst for biggest slide in three months; Light trading, overbought conditions may have exacerbated move
Paul Dobson - Bloomberg
This year's hottest derivatives trade, and perhaps also its most divisive, stole the limelight one final time for 2023 as market watchers cast zero-day options as the villains behind Wednesday's rally-ending slump in US equities. With the S&P 500 Index in overbought territory and turnover curtailed by looming holidays, observers suggested hefty volumes in put options that expire within 24 hours, known as 0DTE options, were sufficient to drag the market to its biggest loss in almost three months. Such trades would oblige market makers on the other side of the transactions to hedge their exposure, pushing the market lower, the argument goes.
/jlne.ws/3RyFGp5
The #0dte Boom Is Set to Hit New Heights in 2024
Gunjan Banerji - The Wall Street Journal
The "0dte" options trade has been one of this year's hottest bets. It's poised to keep growing.
The term stands for zero days to expiration and has become synonymous with trading options that expire the very same day, rather than weeks or months out. Traders can make targeted bets on major indexes, stocks or exchange-traded funds to take on directional positions or hedge their portfolios.
/jlne.ws/3NBe3L4
Option Traders Sound Alarm Bells Over Sizzling India Stock Rally; Proprietary traders increasingly turning bearish on stocks; India stock gauges have climbed to new record highs this month
Akshay Chinchalkar - Bloomberg
The rally in Indian stocks that saw benchmark indexes climb to records this month may be poised for a pullback if derivatives positioning is any guide. Proprietary traders have boosted net short positions in index calls, while trimming their net shorts in index-based puts, according to data compiled by Bloomberg. At the same time, their stock options activity - increasing net shorts in calls and rising net longs in puts - also indicates increasing caution. Prop traders - who take on market exposure for themselves rather than their clients - account for the largest single share of the total derivatives volume in India, so monitoring their positioning comes with extra significance.
/jlne.ws/4ayxHB9
US mutual funds' passion for LatAm options undimmed in Q3
Joe Parsons - Risk.net
US mutual funds continued to add to their Americas non-G10 pair FX options positions during the third quarter of 2023, particularly in Mexican peso, with Franklin Templeton and Invesco leading the way.
Mutual funds added a net $2.2 billion in Americas non-G10 FX options positions during the quarter, of which a net $1.3 billion of dollar/Mexican peso positions was added - the largest volume increase among the most-traded currency pairs.
/jlne.ws/4asx3oX
Forget the Top 5, These Stocks Were the Biggest Movers in the S&P 500 in 2023
Redd Brown - Bloomberg
As the gulf between America's five largest companies and everyone else widens to exceedingly worrying levels, gyrations among the rest of the top 50 in the S&P 500 are at a 10-year high.
The 50 most valuable companies in the benchmark, which now make up about 56% of its total weight, moved up or down on average nine places this year, tied for the most since at least 2013 and almost double in 2019. And that volatility comes even as the median valuation gap between each company in the top 50 has more than doubled to $7 billion since 2013.
/jlne.ws/4apiKl3
European ETFs on track for second-highest annual inflows on record
Alf Wilkinson - Financial Times
European exchange traded funds enjoyed another strong month of inflows in November, putting the industry on course for at least its second-best sales year in history, according to LSEG Lipper.
ETF promoters in Europe gathered EUR17.8bn of net new money last month, far above the sector's rolling 12-month average of EUR12bn, the research company found.
/jlne.ws/3RRd4J5
| | | | | | Exchanges | | | Cboe to Offer Daily Expiries for Russell 2000 Index Options Suite, Beginning January 8, 2024
Cboe via PRNewswire
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading derivatives and securities exchange network, today announced it plans to launch Tuesday and Thursday-expiring Russell 2000 Index weekly (RUTW) options and Mini-Russell 2000 Index weekly (MRUT) options, beginning Monday, January 8, 2024. With these new listings, Cboe expands its cash-settled Russell 2000 Index weekly options suite to offer investors with expirations every trading day of the week.
/jlne.ws/3RR6bHL
Hong Kong Stock Exchange: derivatives, ETF trading rise to offset slump in IPO, share markets, as 'diversification efforts pay off'
South China Morning Post
Hong Kong Exchanges and Clearing (HKEX), which runs Asia's third-largest stock market, reported strong growth in derivatives and ETF trading despite a big fall in new listings, in an indication that the bourse operator has successfully diversified its business model.
/jlne.ws/3GS2DyI
| | | | | | Regulation & Enforcement | | | Korea Is Said to Seek Fines on HSBC, BNP for Naked Short Selling; Watchdog recommends at least 10 billion won fine for each bank; If imposed, fines would be record for illegal short sellers
Youkyung Lee - Bloomberg
South Korea's financial watchdog has recommended imposing a fine of at least 10 billion won ($7.7 million) each on HSBC Holdings Plc and BNP Paribas SA for so-called naked short selling, which is considered illegal in the country, according to two people familiar with the matter. The nation's Financial Supervisory Service made the recommendation to the Securities and Futures Commission under regulator Financial Services Commission, said the people who requested anonymity discussing private matters.
/jlne.ws/3twZwJq
| | | | | | Technology | | | FlexTrade and LSEG Collaborate to Deliver a Fully Integrated FX Solution; A single interface approach to FX and multi-asset execution management
FlexTrade Systems
FlexTrade Systems (@FlexTrade), a global leader in multi-asset execution and order management systems, and LSEG, have today announced a partnership to deliver FlexTRADER EMS clients seamless access to FXall, LSEG's leading electronic trading platform for global currency products. The move is designed to support regulated FX flows and further enhance the capabilities of FlexFX as part of FlexTrade's buy-side multi-asset trading platform.
/jlne.ws/3tqScPx
| | | | | | Strategy | | | Fear Index
Cboe (Video)
In November, the #VIX Index fell eight days in a row, which has only happened 10 times since 1993. What do extended trends like that historically mean for the market? Scott Bauer @cboesib gives us a lowdown in #Vol411.
/jlne.ws/3vbzUCB
| | | | | | Miscellaneous | | | DraftKings and Natural Gas: My Best and Worst Trades of 2023
Mike Butler - tastylive
This year was a very volatile year of trading, even though the Volatility S&P 500 Index (VIX) only eclipsed $30 once in March and traded in the teens for most of the year after that. We saw the S&P 500 ETF (SPY) open at $384.37 and rally to a high of $475.89 just a few days ago.
/jlne.ws/485Rbf3
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