| June 12, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
The role of the FCM: Futures Discovery EP 10
JohnLothianNews.com
Today, we're immersing ourselves in a detailed exploration of the pivotal role of Futures Commission Merchants, commonly known as FCMs. These financial intermediaries play a crucial role in facilitating futures and options trading, serving as a linchpin in the complex web of derivative markets. Understanding the intricate responsibilities and functions of FCMs is essential for navigating the dynamic landscape of modern financial systems.
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Baton Systems CEO Outlines Expansion, Future of Collateral Sector
JohnLothianNews.com
Arjun Jayaram, founder and CEO of Baton Systems, discussed the company's expansion plans and the future of the collateral sector in an interview at the FIA's International Futures Industry Conference.
Jayaram said Baton is seeing increased demand to extend its core collateral products beyond cleared derivatives markets into uncleared derivatives and the broader collateral ecosystem. This includes providing real-time asset inventory visibility, eligibility mapping across venues, and facilitating mobilization of collateral assets.
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| | | | | | Lead Stories | | | VIX drops after report shows inflation cooling
Christine Idzelis - MarketWatch
Wall Street's fear gauge was falling Wednesday as investors assessed a fresh reading on U.S. inflation that indicated it cooled in May by more than anticipated.
The Cboe Volatility Index, often referred to by its ticker symbol VIX, was down about 4.8% at 12.24, according to FactSet data, at last check. That's well below its long-term average of around 20.
/jlne.ws/3KCNFyC
Hedging against a stock-market selloff has almost never been cheaper
Joseph Adinolfi - MarketWatch
Worried about a stock-market pullback over the next six months? If so, you're in luck.
The cost of hedging against a 5% to 15% pullback in U.S. and European stocks over the coming six months has almost never been cheaper, according to a team of equity analysts at Société Générale.
/jlne.ws/45purGo
Property's Big Short Isn't Going to Plan; Lender Arbor Realty Trust is the most heavily shorted real-estate stock in the U.S. So far, the trade hasn't paid off
Carol Ryan - The Wall Street Journal
It looked like an ideal way to bet on the downfall of gung-ho property investors who poured billions of dollars into overpriced buildings during the pandemic. Instead, short sellers in real estate lender Arbor Realty Trust appear stuck in a particularly expensive trade, having underestimated Arbor's determination to "extend and pretend" its problem loans. Property flippers, including some who raised cash from mom-and-pop investors on social media, spent heavily on multifamily apartments between 2020 and 2022. They planned to renovate older buildings, raise rents and quickly sell the properties for profit.
/jlne.ws/3XkEMRL
This Inflation Report Will Probably Get an 'A' From the Fed
Nick Timiraos - The Wall Street Journal
The big question heading into today's Fed meeting is whether a majority of 19 officials pencil in two rate cuts this year, or just one. In March, a narrow majority of officials penciled in at least three cuts this year, but officials made clear that subsequent disappointing readings on inflation had erased at least one cut this yearâand maybe more than that.
But Wednesday's report offers some comfort that Fed officials weren't wrong earlier this year about their initial hypothesis that the path to lower inflation was encountering "bumps" on the way towards their 2% inflation goal.
/jlne.ws/3x6vvlM
Keith Gill has some tough choices to make on his GameStop options with Wall Street ready to pounce
Yun Li - CNBC
As Roaring Kitty continues to watch his favorite GameStop shares swing wildly, he might be contemplating what to do with his massive options position that is approaching expiration.
/jlne.ws/4cfzTh6
| | | | | | Exchanges | | | Trader Alert 24-31: Holiday Reminder - Closed June 19, 2024
Kristin Visnovske - MEMX
MEMX Equities and MEMX Options will be closed Wednesday, June 19, 2024, in observance of Juneteenth National Independence Day. Normal trading will resume on Thursday, June 20, 2024. MEMX Market Hours and Holiday Schedule Please contact Market Operations with any questions. MEMX Market Operations mops@memx.com 1-833-415-6677.
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| | | | | | Regulation & Enforcement | | | SEC fines short-seller over secret payments to publisher of bearish reports on cannabis stocks
Louis Goss - MarketWatch
The U.S. Securities and Exchange Commission has fined a hedge fund $2.25 million for making secret payments to a researcher that published bearish reports and negative social media posts which helped drive down the prices of two cannabis stocks it was shorting. Money managers Anson Funds Management and Anson Advisors used their Cayman Islands registered Anson Investments Master Fund (AIMF) to take out short positions on cannabis stocks while also working with a publisher to distribute bearish information on those same firms, the SEC said in a statement.
/jlne.ws/3yZ73mL
Activist Hedge Fund Fined for Secret Payments to Researcher
Tom Schoenberg and Austin Weinstein - Bloomberg
A sweeping US probe of activist short sellers has yielded its first notable punishment, while offering a rare glimpse into controversial collaborations between bearish researchers and hedge funds that place big bets against companies. The Securities and Exchange Commission fined affiliated money managers Anson Funds Management and Anson Advisors Inc. a total of $2.25 million on Tuesday, accusing them of hiding payments to an unidentified publisher of bearish research. A hedge fund they oversaw generated more than $4 million in gains in late 2018 by collaborating with the outsider on the timing of negative reports and social media posts, the SEC said. It secretly paid the researcher $1.1 million.
/jlne.ws/3VdKEJK
SEBI Proposes Stricter Derivative Trading Rules Amid Surge in Options Market
Investing.com
The Securities and Exchange Board of India (SEBI) is proposing stricter regulations for trading in individual stock derivatives, such as futures and options (F&O), to mitigate market manipulation risks following a sharp increase in options trading activity, according to Reuters. In April 2024, sources revealed that India's top financial regulators intended to form a committee to assess the stability risks posed by the expanding derivatives market. If SEBI's proposals are enacted, many stocks out of the current 182 stocks would become ineligible for F&O trading.
/jlne.ws/4aWN2dP
| | | | | | Technology | | | TradeStation Securities Integrates with Bot-Trading Platform Option Circle; Seamless integration allows TradeStation Securities brokerage clients to leverage bot trading from the Option Circle platform
TradeStation Securities, Inc.
TradeStation Securities, Inc. ("TradeStation Securities"), an award-winning,* self-clearing online brokerage firm for trading stocks, options, futures, and futures options, announced its integration with Option Circle. As a U.S. multi-asset class broker-dealer, TradeStation Securities' integration with the Option Circle platform provides Option Circle users with market access and trading within Option Circle's suite of tools without the need for a separate brokerage platform.
/jlne.ws/3VHLRe8
| | | | | | Strategy | | | Bitcoin ETFs are supercharging this popular crypto-trading strategy â what you need to know
Frances Yue - MarketWatch
The launch of bitcoin ETFs in January helped make one of the most popular trades in crypto even more popular. The so-called basis trade, sometimes known as the cash-and-carry trade, is a market-neutral strategy aimed at exploiting the price discrepancy between an asset and its corresponding derivatives.
/jlne.ws/3KGBl0d
Inflation
Cboe (Video)
Ahead of tomorrow's Fed rate decision, Tim Biggam @delta_desk gives market updates in #Vol411, covering the #VIX futures term structure and more.
/jlne.ws/3RNFAez
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