| January 12, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Term of the Week: Option Style, A Driver for the Value of an Option Contract
JohnLothianNews.com
This video explores the key distinctions between European and American style options and touches on some exotic options like Asian, Bermuda, and Canary styles. Understanding these different styles is crucial for anyone trading or investing in options, as they can significantly impact the value and flexibility of your contracts. Let's dive in and demystify the world of option styles.
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Futures Discovery: Careers in the Futures Industry
JohnLothianNews.com
In episode 4 of Futures Discovery, we're diving into the diverse world of careers within the futures industry. From the fast-paced world of trading to the analytical realms of risk management and technology, there's a multitude of career paths in this dynamic field.
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| | | | | | Lead Stories | | | VIX Trader Drops $17 Million on Bet That Eerie Stock Market Calm Won't Last
Carly Wanna - Bloomberg
A trader snapped up call options tied to the Cboe Volatility Index, positioning for a pickup in stock market swings within the next month.
A trader bought about 250,000 call contracts on the VIX Index with a strike price of 17 that expire on Feb. 14. The trader spent about $16.7 million in premium, with each contract costing between roughly $0.63 and $0.67. The VIX hasn't traded above the 17 level since early November.
/jlne.ws/3UgvAMX
Bullish-Looking China Options Trades Mask Lack of Conviction
Akshay Chinchalkar and Sangmi Cha - Bloomberg
China options data that look increasingly optimistic may actually be a sign that investors lack conviction in the market's ability to stage a sustainable rally.
The Hang Seng China Enterprises Index's open interest put-to-call ratio - which measures how many bearish options are outstanding relative to bullish ones - has fallen below one. On the surface, that says investors prefer contracts betting on gains. But it could also just show that, after years of decline in the index, investors are throwing in the towel.
/jlne.ws/3Sj1tTD
Options growth in 'early days' as ETF issuers shift strategies - Cboe
Radi Khasawneh - Futures & Options World
The recent expansion of its zero-day-to-expiry (0DTE) product suite to encompass small caps will help meet growing demand from firms such as exchange-traded fund (ETF) issuers incorporating the strategies into their products, according to a senior executive at Cboe Global Markets
/jlne.ws/48njSnL
Bitcoin ETF approval is likely to benefit institutional investors: Goldman Sachs
Will Canny - CoinDesk
Institutional investors may benefit from the approval of spot bitcoin [BTC] exchange-traded funds (ETFs) as these products will allow them to trade a proxy with low management fees and engage more actively in arbitrage strategies and options hedging, Goldman Sachs (GS) said in a report. Spot bitcoin ETFs were finally approved in the U.S. on Wednesday, a decade after they were first proposed, in a move that dramatically widens access to the world's largest cryptocurrency. These groundbreaking products will begin trading today.
/jlne.ws/41Sda6V
Bitcoin trading volumes surge after debut of long-awaited US ETFs; Ten funds holding the cryptocurrency hit stock exchanges after winning SEC approval
Will Schmitt - Financial Times
Bitcoin trading volumes surged on Thursday after the first 10 US exchange traded funds offering direct exposure to the world's largest cryptocurrency made a long-awaited debut on stock exchanges. Trading in the nine new ETFs and Grayscale Investments' converted $28bn bitcoin trust exceeded $4bn across the New York Stock Exchange, Nasdaq and Cboe exchanges, a day after they received approvals from the Securities and Exchange Commission.
/jlne.ws/48Nfgaj
US bitcoin ETFs see $4.6B in volume in first day of trading
Hannah Lang, Suzanne McGee and Manya Saini - Reuters
U.S.-listed bitcoin exchange-traded funds (ETFs) saw $4.6 billion worth of shares trade hands as of Thursday afternoon, according to LSEG data, as investors jumped into the landmark products approved by the U.S. securities regulator on Wednesday. The products mark a watershed moment for the cryptocurrency industry that will test whether digital assets - still viewed by many professionals as risky - can gain broader acceptance as an investment.
/jlne.ws/3ScpnQq
Record Size Fed Funds Trade in Futures Points to Big Short Cover
Edward Bolingbroke - Bloomberg
A single block trade in the fed funds futures market, struck as the dust settled following Thursday's December inflation reading, was the biggest size ever seen of its kind. The trade took place at 10:46am New York time, as price action had calmed following a hot CPI print. It was for 72,000 contracts in the February 2024 tenor, which expires Feb. 29. Sources in the market familiar with the flow say this is the largest single trade, while CME Group could confirm it was the largest sized fed funds block since at least 2016.
/jlne.ws/3u0cFuK
Bitcoin ETF Debut Serves as a Lesson for Ether ETF Speculators
CoinDesk via Business Insider
Nearly a dozen spot bitcoin [BTC] exchange-traded funds (ETFs), assets that invest in the actual token, began trading in the U.S. on Thursday. The highly-anticipated investment products came into effect after years of wait as the Securities and Exchange Commission (SEC) approved them on Wednesday.
While several things happened in the weeks leading up to their debut, some related to implied volatility and the options market are worth noting as speculators look at ether [ETH] as the next likely candidate for a spot ETF approval.
/jlne.ws/3O0gIy2
| | | | | | Exchanges | | | Cboe Digital Launches Margined Bitcoin and Ether Futures, Announces Successful First Trade
Cboe
Cboe Digital announced it successfully launched margined Bitcoin and Ether futures and completed its first margined Bitcoin futures trade. With support from Blockfills, DV Trading LLC, Jump Trading Group, Marex, Toa Capital Partners and Wedbush in executing these trades, Cboe Digital becomes the first U.S. regulated crypto native exchange and clearinghouse to offer both spot and leveraged derivatives trading on a single platform.
/jlne.ws/3vwAYBd
Cboe among investors in Abaxx's $27M funding round
Luke Jeffs - Futures & Options World
Cboe was among the investors involved in a $27.3 million raise for Abaxx Techologies' latest equity placement. TLW Trading and Traxys Lithium Investments were also part of the group. The funds will support "the launch of our exchange and clearing house and its growth and development", Abaxx CEO Nancy Seah said.
/jlne.ws/3RSaZvv
Revised New Product Summary: Initial Listing of the Options on S&P 500 Annual Dividend Index Futures Contract (Update Strike Price Format) - Effective January 29, 2024
CME Group
Initial Listing of the Options on S&P 500 Annual Dividend Index Futures Contract (Update Strike Price Format).
/jlne.ws/3TRyOGl
SGX Group reports market statistics for December 2023
SGX Group
Commodities and FX spur derivatives volume growth; Singapore's equities market outperforms peers across Southeast Asia. Singapore Exchange (SGX Group) today released its market statistics for December 2023. Heightened trading activity in commodities and foreign exchange (FX) derivatives lifted volume gains for the month, while steady global institutional interest in key equity index futures contracts brought open interest to a strong close for the final quarter of the year.
/jlne.ws/41XXFu1
Euronext announces volumes for December 2023
Euronext
Euronext, the leading pan-European market infrastructure, today announced trading volumes for December 2023. Monthly and historical volume tables are available at this address:
/euronext.com/investor-relations#monthly-volumes
https://jlne.ws/48OgHVR
| | | | | | Strategy | | | Anatomy of a Trade PYPL Strangle
Tastytrade (Video)
In this video, the hosts of Options Trading Concepts Live discuss market conditions, and upcoming earnings reports for banks. They also review a trade example involving a strangle in UNH, highlight the recent performance of Chinese stocks, and analyze the performance of various options positions, including a short straddle in GLD, a vertical spread in COIN, and a short straddle in SPX. The hosts emphasize the importance of managing risk, trading small, and adjusting positions when necessary. They also mention the potential risks and rewards of certain strategies, such as the crab trade and the bear trap strategy. Overall, the hosts provide insights into trading strategies and market trends for viewers to consider in their own trading activities.
/jlne.ws/3HBOXsh
Option Contracts Offer Tax Advantages, But Beware of Risks
Samuel V. Gaeta - Kiplinger
When it comes to investing in the stock market, many of us are somewhat spoiled. This past decade saw the best performance in market history. For some, fantastic returns were the norm, but they're now finding out that such returns aren't guaranteed, and the incredible run we enjoyed appears to be over.
To the person counting on significant gains from their investments in order to fund their lifestyle or retirement, the last couple of years have been an unpleasant surprise. Nevertheless, there are still opportunities to improve our potential returns. One such opportunity in flat or downward-trending markets is the call option.
/jlne.ws/4aXPylw
| | | | | | Events | | | Security Traders Association of Chicago Unveils Agenda for 98th Annual Mid-Winter Meeting
Press Release via Traders Magazine
The Security Traders Association of Chicago (STAC), a membership organization for individual professionals in the securities industry in Chicago and an affiliate of The Security Traders Association (STA), has revealed the agenda for its 98th Annual Mid-Winter Meeting. The premier event will bring together the STAC community, industry experts and market participants from across the country to examine the state of the securities market as they connect, learn and exchange ideas for future success.
/jlne.ws/3SfEXe3
| | | | | | Miscellaneous | | | Fireside Friday with... DWS's Keshava Shastry; The TRADE sat down with Keshava Shastry, managing director and global head of capital markets at DWS to unpack the biggest market structure changes across the industry, delving into globalisation, T+1 settlement, and the effects of volatility.
Claudia Preece - The Trade
How is the role of technology changing as market structure develops?
Technology is a significant player, developing hand in hand with the market's structure as participants, regulators and technology providers investigate the next step in its evolution, working in tandem with how the industry parameters to evolve sophisticated offerings with the tools and systems to streamline processes, reduces costs and enhance output analysis.
/jlne.ws/3S3UTz4
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