LEAD STORIES
Potential Tax Change Could ‘Decimate’ Options Trading Volume
Kaitlyn Kiernan, The Wall Street Journal
Tabb Group’s Andy Nybo weighed in Thursday and on a proposed tax change that could “decimate trading volumes” in the options industry.
http://jlne.ws/Z5D5DR
U.S. options clearer moves to end trade type dominated by Nasdaq
Ann Saphir, Reuters
The clearinghouse for all stock options said Thursday it will adopt a policy aimed at abolishing a dividend-linked trading strategy that critics say could destabilize markets if left unchecked.
http://jlne.ws/Z5E2MB
New CBOE CEO Aims to Take Volatility Franchise Global
Jacob Bunge, The Wall Street Journal
The new chief executive of the Chicago Board Options Exchange said Thursday that he plans to take its highly prized volatility franchise global and is open to deal making to bolster the company's leading position in stock-options trading.
http://jlne.ws/16TVzw7
New CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (VXTYN)
Matt Moran, CBOE
CBOE and CBOE Futures Exchange (CFE) plan to offer trading on the 10-year Treasury Volatility Index in the future. The VXTYN Index has the potential to become a popular gauge if there is a future rise in both interest rates and interest rate volatility.
http://jlne.ws/Z5DeqT
The VIX Is Sending Odd Signals
Everiste Lefeuvre, Seeking Alpha
Jitters about a possible earlier-than-expected tapering of QE have temporarily stopped the ongoing rally of stock prices. Interestingly enough, this comes at a time when the VIX and some associated option-linked indicators are showing some interesting patterns.
http://jlne.ws/Z5Dx4V
VXX Leads Alternative ETFs Asset Inflows
Cinthia Murphy, IndexUniverse
Investors have poured more than $83 billion into U.S.-listed ETFs so far this year, and while U.S. equities ETFs have attracted the most investor dollars on a nominal basis, it's alternatives ETFs that have actually seen their assets grow the most in percentage terms.
http://jlne.ws/Z5F2jM
Derivatives trade booms in wake of Japan stock slide
Helen Bartholomew, Reuters
Investors betting on a continuation of Japan's six-month runaway bull market suffered their biggest scare yet on Thursday as the Nikkei 225 lost more than 7% - its largest one-day loss in more than two years.
http://jlne.ws/Z5D0Ae
Mini Flash-Crash Trades Wiped From Tape, But Not Canceled
Chris Dieterich, The Wall Street Journal
Evidence of the short-lived plunges in shares of American Electric Power Co. Inc. and NextEra Energy Inc. were wiped off the tape, but not from investors’ portfolios.
http://jlne.ws/Z5DDd1
Direct Access Partners Shuts Down
Peter Chapman, Traders Magazine
Direct Access Partners has shut down.
The institutional brokerage stopped handling orders two days ago, sources tell Traders Magazine, after its clearing firm, Goldman Sachs, stopped clearing its trades.
http://jlne.ws/Z5ElXN
EXCHANGES
CBOE weighs its regulatory role
Lynne Marek, Crain's Chicago Business
CBOE Holdings Inc. Executive Chairman Bill Brodsky said the options exchange operator could eventually decide not to carry all of the regulatory duties it's shouldering today.
http://jlne.ws/Z5DWEB
Extended VIX futures trading back on track at CBOE
Chicago Tribune
Expanded trading hours for CBOE Volatility Index futures are on track to begin later this year, according to CBOE Holdings Inc. incoming chief executive.
http://jlne.ws/Z5EQAU
OCC to Adopt a Policy to Restrict Exercises to Net Long Positions
Press Release (OCC)
OCC announced today that its Board of Directors approved the adoption of a policy that would require clearing members to restrict exercises in certain accounts, including market maker and joint back-office accounts to the extent each respective account is net long at the end of the trading day. The required netting would occur within each options series.
http://jlne.ws/Z5EfPK
CBOE Holdings, Inc. Announces 2013 Annual Meeting Results
Press Release (CBOE)
CBOE Holdings, Inc. (NASDAQ: CBOE) announced the stockholder voting results from its 2013 Annual Meeting held today.
http://jlne.ws/Z5EJoV
REGULATION
Former Goldman banker settles SEC 'pay-to-play' charges
Lisa Lambert and Jonathan Stempel, Reuters
A former Goldman Sachs Group Inc. investment banker has agreed to a five-year securities industry ban and a record fine to settle U.S. Securities and Exchange Commission charges that he broke rules against influence peddling to win bond underwriting business in Massachusetts.
http://jlne.ws/Z5DNAV
Friday, May 24, 2013
Thursday, May 23, 2013
Traders Sue Options Exchanges Over Fees
COMMENTARY & INSIGHT
CBOE Celebrates 40 Years
Last night the CBOE held a star-studded panel discussion at the exchange and later a dinner at a Chicago hotel in honor of its 40 anniversary, the 30th anniversary of the index options and the 20th anniversary of the introduction of the VIX. Today, they will have their annual meeting and Bill Brodsky cede the CEO role to Ed Tilly and Mr. Brodsky will assume the role of executive chairman [transcript of the meeting is listed below under "Exchanges" -JB].
The panel discussion featured the President of Barron’s as the moderator, as well as Mr. Brodsky, Myron Scholes, Thomas Peterffy, Larry McMillan and Buzz Gregory from Goldman Sachs. Steve Sears of Barron’s was supposed to be on the panel, but did not make it in due to the weather.
Prior to the dinner, I had the opportunity to meet and shake hands with a hero of mine, Joe Sullivan. Later in the evening, Mr. Sullivan, the first president of the CBOE and the person considered most responsible for getting the CBOE and the whole options industry started, was honored with a standing ovation.
Mr. Sullivan does not get out much, or regularly attend industry conferences, but does have an award named after him. The Joseph W. Sullivan Options Industry Achievement Award was established in May 2002 to recognize individuals who have made outstanding contributions to the growth and integrity of the U.S. options market. Not bad for a former Wall Street Journal reporter.
Mr. Brodsky also received a standing ovation last night, signifying his years of contributions to the options industry and the CBOE. Both ovations were well deserved and gave me a chance to work my new knees during the dinner.
The John Lothian Productions crew received a shout-out during the thank yous for the 40th anniversary video we produced for the CBOE.
The CBOE did a nice job of putting the two events together and even had the Mayor of Chicago making the rounds at the cocktail party before the dinner.
Congratulations to the CBOE on their 40 years. Congratulations to Bill Brodsky on a great run as CBOE CEO and best of luck to Ed Tilly as he moves into the role of CEO.
~John J. Lothian
LEAD STORIES
Traders Sue Options Exchanges Over Fees
Jacob Bunge, The Wall Street Journal
Four of the biggest stock-options trading firms in the U.S. on Thursday sued exchanges over fees that the firms said were improperly collected for 7 1/2 years.
http://jlne.ws/11dD7pN
Optimism Remains in Options as Stocks Drop
Kaitlyn Kiernan, The Wall Street Journal
As stocks dropped for a second straight day Thursday, many options traders continued to bet that the market will climb in the weeks ahead.
http://jlne.ws/12QyMwM
CBOE Begins Disseminating New Volatility Index On CME Group's 10-Year U.S. Treasury Note Options Contract
Press Release (CBOE)
Chicago Board Options Exchange (CBOE) and CME Group (CME) have announced that, as part of an agreement between the exchanges, CBOE today began disseminating values for a new volatility benchmark index using futures options data on CME Group's 10-year U.S. Treasury note contract. The CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (ticker symbol VXTNY ) is the first volatility index based on U.S. government debt to be calculated and disseminated by CBOE.
http://jlne.ws/12Qyt52
Huge bullish trades in sector funds
optionMONSTER (via NASDAQ)
Investors are using options to adjust huge bullish positions in large sectors at low cost.
http://jlne.ws/12Qy2aW
Global selloff hits equity indexes
optionMONSTER (via NASDAQ)
Stocks are falling today as a global selloff hits equity markets.
http://jlne.ws/12QyaY7
OptionsCity Expands Management Team, Renews Commitment to Customer Care
Press Release (OptionsCity)
OptionsCity Software (www.optionscity.com) announced today that Timo Pentner has joined the company as Executive Vice President of Services. Mr. Pentner will oversee all support, onboarding, and training operations in the U.S. and Europe.
http://jlne.ws/12QA8HR
CME chairman takes credit for MF Global response
Lynne Marek, Crain's Chicago Business
The chairman of CME Group Inc. said the futures exchange made the right decision when it declined to reimburse customers of the failed MF Global Inc. because those customers have recouped close to 99 percent of their $1.6 billion in lost funds through the bankruptcy process.
http://jlne.ws/12Qx3rp
EXCHANGES
CBOE to expand VIX trading hours later this year
Reuters
CBOE Holdings Inc will expand trading hours for futures on the CBOE Volatility Index later this year, after a technical glitch delayed the change, the company's incoming chief executive said on Thursday.
http://jlne.ws/12Qwq10
London Stock Exchange Offers Single-Stock Options Trading
Andrew Rummer, Bloomberg
London Stock Exchange Group Plc (LSE) will introduce trading in single-stock options next month, offering 19 contracts on energy and mining companies listed in the U.K.
http://jlne.ws/12QwUEj
CBOE Holdings, Inc. - Shareholder/Analyst Call [transcript]
SeekingAlpha
Good morning, everybody. I'm Bill Brodsky, and we're going to start the meeting in a minute. [Operator Instructions] Before we begin the meeting today, I just want to make one special recognition. We are very honored and delighted that CBOE's first President and Founder, Joe Sullivan is with us today and it's the first time Joe's been with us in an annual meeting. Joe, we're delighted to have you here.
http://jlne.ws/12QACxM
REGULATION
FINRA Considering Rule to Require More Dark Pool Data Disclosure
Dave Michaels, Bloomberg
The Financial Industry Regulatory Authority, the private-sector regulator of U.S. brokerages, may ask brokers to distinguish trades that occur in dark pools from ones that don’t, Finra chief executive officer Richard G. Ketchum told reporters today.
http://jlne.ws/10lCqvE
Finra Expands U.S. Stock-Market Surveillance
Jacob Bunge, Dow Jones Newswires (via Fox Business)
An industry-funded regulator Wednesday agreed to take on oversight of two more U.S. exchanges, a move that will improve its surveillance and expand its coverage to around 90% of daily stock trading.
http://jlne.ws/12Qx9PO
STRATEGY
ETF Bear Put Spread Options Strategy Explained
Justin Kuepper, ETF Database
Exchange-traded funds (“ETFs”) have become a very valuable tool for investors seeking exposure to all corners of the market. While they provide diversified exposure in a single U.S.-traded security, equity options can be used in conjunction with ETFs to create more complex trading strategies designed to achieve specific goals or targeted strategies.
http://jlne.ws/12Qzx96
Put-Write ETF Focuses on Income
Tom Lydon, ETF Trends
Yield generation has been a hot topic as investors look for alternative income sources in a low-rate environment. ALPS with Rich Investment Solutions recently launched an exchange traded fund that seeks to provide income through a sophisticated options strategy.
http://jlne.ws/12QzJFl
CBOE Celebrates 40 Years
Last night the CBOE held a star-studded panel discussion at the exchange and later a dinner at a Chicago hotel in honor of its 40 anniversary, the 30th anniversary of the index options and the 20th anniversary of the introduction of the VIX. Today, they will have their annual meeting and Bill Brodsky cede the CEO role to Ed Tilly and Mr. Brodsky will assume the role of executive chairman [transcript of the meeting is listed below under "Exchanges" -JB].
The panel discussion featured the President of Barron’s as the moderator, as well as Mr. Brodsky, Myron Scholes, Thomas Peterffy, Larry McMillan and Buzz Gregory from Goldman Sachs. Steve Sears of Barron’s was supposed to be on the panel, but did not make it in due to the weather.
Prior to the dinner, I had the opportunity to meet and shake hands with a hero of mine, Joe Sullivan. Later in the evening, Mr. Sullivan, the first president of the CBOE and the person considered most responsible for getting the CBOE and the whole options industry started, was honored with a standing ovation.
Mr. Sullivan does not get out much, or regularly attend industry conferences, but does have an award named after him. The Joseph W. Sullivan Options Industry Achievement Award was established in May 2002 to recognize individuals who have made outstanding contributions to the growth and integrity of the U.S. options market. Not bad for a former Wall Street Journal reporter.
Mr. Brodsky also received a standing ovation last night, signifying his years of contributions to the options industry and the CBOE. Both ovations were well deserved and gave me a chance to work my new knees during the dinner.
The John Lothian Productions crew received a shout-out during the thank yous for the 40th anniversary video we produced for the CBOE.
The CBOE did a nice job of putting the two events together and even had the Mayor of Chicago making the rounds at the cocktail party before the dinner.
Congratulations to the CBOE on their 40 years. Congratulations to Bill Brodsky on a great run as CBOE CEO and best of luck to Ed Tilly as he moves into the role of CEO.
~John J. Lothian
LEAD STORIES
Traders Sue Options Exchanges Over Fees
Jacob Bunge, The Wall Street Journal
Four of the biggest stock-options trading firms in the U.S. on Thursday sued exchanges over fees that the firms said were improperly collected for 7 1/2 years.
http://jlne.ws/11dD7pN
Optimism Remains in Options as Stocks Drop
Kaitlyn Kiernan, The Wall Street Journal
As stocks dropped for a second straight day Thursday, many options traders continued to bet that the market will climb in the weeks ahead.
http://jlne.ws/12QyMwM
CBOE Begins Disseminating New Volatility Index On CME Group's 10-Year U.S. Treasury Note Options Contract
Press Release (CBOE)
Chicago Board Options Exchange (CBOE) and CME Group (CME) have announced that, as part of an agreement between the exchanges, CBOE today began disseminating values for a new volatility benchmark index using futures options data on CME Group's 10-year U.S. Treasury note contract. The CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (ticker symbol VXTNY ) is the first volatility index based on U.S. government debt to be calculated and disseminated by CBOE.
http://jlne.ws/12Qyt52
Huge bullish trades in sector funds
optionMONSTER (via NASDAQ)
Investors are using options to adjust huge bullish positions in large sectors at low cost.
http://jlne.ws/12Qy2aW
Global selloff hits equity indexes
optionMONSTER (via NASDAQ)
Stocks are falling today as a global selloff hits equity markets.
http://jlne.ws/12QyaY7
OptionsCity Expands Management Team, Renews Commitment to Customer Care
Press Release (OptionsCity)
OptionsCity Software (www.optionscity.com) announced today that Timo Pentner has joined the company as Executive Vice President of Services. Mr. Pentner will oversee all support, onboarding, and training operations in the U.S. and Europe.
http://jlne.ws/12QA8HR
CME chairman takes credit for MF Global response
Lynne Marek, Crain's Chicago Business
The chairman of CME Group Inc. said the futures exchange made the right decision when it declined to reimburse customers of the failed MF Global Inc. because those customers have recouped close to 99 percent of their $1.6 billion in lost funds through the bankruptcy process.
http://jlne.ws/12Qx3rp
EXCHANGES
CBOE to expand VIX trading hours later this year
Reuters
CBOE Holdings Inc will expand trading hours for futures on the CBOE Volatility Index later this year, after a technical glitch delayed the change, the company's incoming chief executive said on Thursday.
http://jlne.ws/12Qwq10
London Stock Exchange Offers Single-Stock Options Trading
Andrew Rummer, Bloomberg
London Stock Exchange Group Plc (LSE) will introduce trading in single-stock options next month, offering 19 contracts on energy and mining companies listed in the U.K.
http://jlne.ws/12QwUEj
CBOE Holdings, Inc. - Shareholder/Analyst Call [transcript]
SeekingAlpha
Good morning, everybody. I'm Bill Brodsky, and we're going to start the meeting in a minute. [Operator Instructions] Before we begin the meeting today, I just want to make one special recognition. We are very honored and delighted that CBOE's first President and Founder, Joe Sullivan is with us today and it's the first time Joe's been with us in an annual meeting. Joe, we're delighted to have you here.
http://jlne.ws/12QACxM
REGULATION
FINRA Considering Rule to Require More Dark Pool Data Disclosure
Dave Michaels, Bloomberg
The Financial Industry Regulatory Authority, the private-sector regulator of U.S. brokerages, may ask brokers to distinguish trades that occur in dark pools from ones that don’t, Finra chief executive officer Richard G. Ketchum told reporters today.
http://jlne.ws/10lCqvE
Finra Expands U.S. Stock-Market Surveillance
Jacob Bunge, Dow Jones Newswires (via Fox Business)
An industry-funded regulator Wednesday agreed to take on oversight of two more U.S. exchanges, a move that will improve its surveillance and expand its coverage to around 90% of daily stock trading.
http://jlne.ws/12Qx9PO
STRATEGY
ETF Bear Put Spread Options Strategy Explained
Justin Kuepper, ETF Database
Exchange-traded funds (“ETFs”) have become a very valuable tool for investors seeking exposure to all corners of the market. While they provide diversified exposure in a single U.S.-traded security, equity options can be used in conjunction with ETFs to create more complex trading strategies designed to achieve specific goals or targeted strategies.
http://jlne.ws/12Qzx96
Put-Write ETF Focuses on Income
Tom Lydon, ETF Trends
Yield generation has been a hot topic as investors look for alternative income sources in a low-rate environment. ALPS with Rich Investment Solutions recently launched an exchange traded fund that seeks to provide income through a sophisticated options strategy.
http://jlne.ws/12QzJFl
Wednesday, May 22, 2013
Last-Second Options Bet on Saks Raises Questions
LEAD STORIES
Last-Second Options Bet on Saks Raises Questions
Kaitlyn Kiernan, The Wall Street Journal
Options traders are raising questions about the timing of a set of last-minute trades in Saks Inc. Tuesday that stand to bring in huge profits following news the company may be exploring a sale.
http://jlne.ws/184Wha7
IntercontinentalExchange CEO says lack of cross-border derivatives coordination ‘damaging’
Megan Hickey, Medill News Service (via MarketWatch)
The failure to harmonize the cross-border application of derivative rules “will be damaging,” according to IntercontinentalExchange Chairman and CEO Jeffrey Sprecher, who testified Tuesday on Capitol Hill at a hearing on the future of the Commodity Futures Trading Commission.
http://jlne.ws/10mXwJW
VIX Makes Another Jump Despite Record Highs for Dow and S&P 500
Wall Street Sector Selector
Record-high advances for the Dow and S&P 500 did not stop the VIX from jumping 2.69 percent as investors pondered how long the rally can last.
http://jlne.ws/10n062G
Derivatives trader: 'Trading can take over your life – but only if you let it'
Joris Luyendijk, The Guardian
"It's funny. I am the current public bogeyman – not only am I a migrant, but I am a "banker" (deliberate use of inverted commas) too! Ironically, I can buy financial security by undertaking a job dealing with understanding insecurity and uncertainty. That's a trade I am prepared to make.
http://jlne.ws/10n0T3y
Sinful Broker Denial And How An Index Ends It
Amity Shlaes, Forbes
“The only thing we have to fear is fear itself,” Franklin Roosevelt once said, and these days the market experts still seem to be heeding him. Along with such old measures as interest rates and indexes of consumer confidence, investment advisors now press clients with a variety of newer “fear” or “uncertainty” indexes, such as the Chicago Board Options Exchange Volatility Index, or VIX.
http://jlne.ws/10n1gLE
Confusion to the Skeptics
Randall W. Forsyth, Barron's
Amid contradictory signals, forecasts of rising P/Es and dividends force laggard bears to buy.
http://jlne.ws/194XWvc
Hedge Funds Trail S&P 500 by 10 Percentage Points, Goldman Says
Jesse Westbrook, Bloomberg
Hedge funds’ returns have stayed “lackluster” this year, with the $2.3 trillion industry trailing the gains of the Standard & Poor’s 500 Index by about 10 percentage points, according to Goldman Sachs (GS) Group Inc.
http://jlne.ws/10n41wy
Is the S&P 500 Cheap?
ETF Guide (via NASDAQ)
The S&P 500 has soared 14.5% since the start of the year. Are equity valuations stretched?
http://jlne.ws/10n4jDz
This Market Rally Has to Stop Sometime. Doesn't It?
Jeff Cox, CNBC
Stock market rallies have to end sometime for sure, but history suggests the current one, despite its seemingly bloated nature, doesn't have to end anytime soon.
http://jlne.ws/10n4KxF
Videocast: Parsing huge VIX volume
optionMONSTER
http://jlne.ws/10n34nJ
EXCHANGES
ICE Futures Europe Sets Daily Volume Record in Coal Options
Press Release (ICE)
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today announced that ICE Futures Europe reached a daily volume record of 9,075 contracts in ICE Coal options on May 21, 2013. The previous volume record was 7,200 contracts on December 4, 2012.
Volume for ICE Coal futures and options also reached a combined record of 17,641 contracts on May 21, 2013, compared with the previous combined record of 15,590 on March 28, 2013.
http://jlne.ws/10n1rXp
CBOE, CFE, C2 and CBSX Trading Schedule for the Memorial Day Holiday (full text)
Press Release (CBOE)
CBOE Holdings, Inc. (NASDAQ: CBOE) announced the following trading schedule for Chicago Board Options Exchange (CBOE), CBOE Futures Exchange (CFE), C2 Options Exchange (C2), and CBOE Stock Exchange (CBSX) in observance of the Memorial Day Holiday:
- Friday, May 24: CBOE, CFE, C2 and CBSX will have regular trading hours for all products.
- Monday, May 27: CBOE, CFE, C2 and CBSX will be closed.
REGULATION
Treasury chief says foreign officials too critical on swaps rules
Emily Stephenson and Sarah N. Lynch, Thomson Reuters
Foreign countries are being too critical and potentially hurting delicate negotiations with U.S. regulators over how broadly they should apply new over-the-counter derivatives rules to trades that cut across borders, U.S. Treasury Secretary Jack Lew said on Tuesday.
http://jlne.ws/10mYK7Z
Gensler’s Recusal Criticized in CFTC Watchdog’s MF Global Report
Silla Brush, Bloomberg
Chairman Gary Gensler’s recusal from the U.S. Commodity Futures Trading Commission’s investigation into the collapse of MF Global Holdings Ltd. (MFGLQ) was unnecessary and wasn’t required by ethics rules, according to the agency’s internal watchdog.
http://jlne.ws/10lCqfa
TECHNOLOGY
RTS Realtime Systems to Open Data Center in Dubai
Press Release (via The Wall Street Journal)
RTS Realtime Systems Group (RTS), a leading global trading solutions provider, today announced plans to open its newest data center in Dubai, the first Middle East site in its global data center network. Expected to go live in mid-July, the new hub in the RTS global trading network will offer ultra-low latency access to the Dubai Gold & Commodities Exchange (DGCX), one of the world's fastest growing exchanges.
http://jlne.ws/10n2iqO
STRATEGY
As Markets Soar Into Unknown Territory, Collar Profits With the S&P 500
Oliver Pursche, Minyanville (via NASDAQ)
While the news is all pretty good from an investment perspective, we're still in unknown territory. Continued monetary easing around the world may continue to drive markets up further.
http://jlne.ws/10n3CtO
Protecting Your Portfolio With Implied Volatility
Seeking Alpha
The global equity rally in developed nations has created significant headwinds for implied volatility. Implied volatility (IV) is the market's estimate of how much a security will move over a specific period of time on an annualized basis.
http://jlne.ws/10n4ZJ8
Last-Second Options Bet on Saks Raises Questions
Kaitlyn Kiernan, The Wall Street Journal
Options traders are raising questions about the timing of a set of last-minute trades in Saks Inc. Tuesday that stand to bring in huge profits following news the company may be exploring a sale.
http://jlne.ws/184Wha7
IntercontinentalExchange CEO says lack of cross-border derivatives coordination ‘damaging’
Megan Hickey, Medill News Service (via MarketWatch)
The failure to harmonize the cross-border application of derivative rules “will be damaging,” according to IntercontinentalExchange Chairman and CEO Jeffrey Sprecher, who testified Tuesday on Capitol Hill at a hearing on the future of the Commodity Futures Trading Commission.
http://jlne.ws/10mXwJW
VIX Makes Another Jump Despite Record Highs for Dow and S&P 500
Wall Street Sector Selector
Record-high advances for the Dow and S&P 500 did not stop the VIX from jumping 2.69 percent as investors pondered how long the rally can last.
http://jlne.ws/10n062G
Derivatives trader: 'Trading can take over your life – but only if you let it'
Joris Luyendijk, The Guardian
"It's funny. I am the current public bogeyman – not only am I a migrant, but I am a "banker" (deliberate use of inverted commas) too! Ironically, I can buy financial security by undertaking a job dealing with understanding insecurity and uncertainty. That's a trade I am prepared to make.
http://jlne.ws/10n0T3y
Sinful Broker Denial And How An Index Ends It
Amity Shlaes, Forbes
“The only thing we have to fear is fear itself,” Franklin Roosevelt once said, and these days the market experts still seem to be heeding him. Along with such old measures as interest rates and indexes of consumer confidence, investment advisors now press clients with a variety of newer “fear” or “uncertainty” indexes, such as the Chicago Board Options Exchange Volatility Index, or VIX.
http://jlne.ws/10n1gLE
Confusion to the Skeptics
Randall W. Forsyth, Barron's
Amid contradictory signals, forecasts of rising P/Es and dividends force laggard bears to buy.
http://jlne.ws/194XWvc
Hedge Funds Trail S&P 500 by 10 Percentage Points, Goldman Says
Jesse Westbrook, Bloomberg
Hedge funds’ returns have stayed “lackluster” this year, with the $2.3 trillion industry trailing the gains of the Standard & Poor’s 500 Index by about 10 percentage points, according to Goldman Sachs (GS) Group Inc.
http://jlne.ws/10n41wy
Is the S&P 500 Cheap?
ETF Guide (via NASDAQ)
The S&P 500 has soared 14.5% since the start of the year. Are equity valuations stretched?
http://jlne.ws/10n4jDz
This Market Rally Has to Stop Sometime. Doesn't It?
Jeff Cox, CNBC
Stock market rallies have to end sometime for sure, but history suggests the current one, despite its seemingly bloated nature, doesn't have to end anytime soon.
http://jlne.ws/10n4KxF
Videocast: Parsing huge VIX volume
optionMONSTER
http://jlne.ws/10n34nJ
EXCHANGES
ICE Futures Europe Sets Daily Volume Record in Coal Options
Press Release (ICE)
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today announced that ICE Futures Europe reached a daily volume record of 9,075 contracts in ICE Coal options on May 21, 2013. The previous volume record was 7,200 contracts on December 4, 2012.
Volume for ICE Coal futures and options also reached a combined record of 17,641 contracts on May 21, 2013, compared with the previous combined record of 15,590 on March 28, 2013.
http://jlne.ws/10n1rXp
CBOE, CFE, C2 and CBSX Trading Schedule for the Memorial Day Holiday (full text)
Press Release (CBOE)
CBOE Holdings, Inc. (NASDAQ: CBOE) announced the following trading schedule for Chicago Board Options Exchange (CBOE), CBOE Futures Exchange (CFE), C2 Options Exchange (C2), and CBOE Stock Exchange (CBSX) in observance of the Memorial Day Holiday:
- Friday, May 24: CBOE, CFE, C2 and CBSX will have regular trading hours for all products.
- Monday, May 27: CBOE, CFE, C2 and CBSX will be closed.
REGULATION
Treasury chief says foreign officials too critical on swaps rules
Emily Stephenson and Sarah N. Lynch, Thomson Reuters
Foreign countries are being too critical and potentially hurting delicate negotiations with U.S. regulators over how broadly they should apply new over-the-counter derivatives rules to trades that cut across borders, U.S. Treasury Secretary Jack Lew said on Tuesday.
http://jlne.ws/10mYK7Z
Gensler’s Recusal Criticized in CFTC Watchdog’s MF Global Report
Silla Brush, Bloomberg
Chairman Gary Gensler’s recusal from the U.S. Commodity Futures Trading Commission’s investigation into the collapse of MF Global Holdings Ltd. (MFGLQ) was unnecessary and wasn’t required by ethics rules, according to the agency’s internal watchdog.
http://jlne.ws/10lCqfa
TECHNOLOGY
RTS Realtime Systems to Open Data Center in Dubai
Press Release (via The Wall Street Journal)
RTS Realtime Systems Group (RTS), a leading global trading solutions provider, today announced plans to open its newest data center in Dubai, the first Middle East site in its global data center network. Expected to go live in mid-July, the new hub in the RTS global trading network will offer ultra-low latency access to the Dubai Gold & Commodities Exchange (DGCX), one of the world's fastest growing exchanges.
http://jlne.ws/10n2iqO
STRATEGY
As Markets Soar Into Unknown Territory, Collar Profits With the S&P 500
Oliver Pursche, Minyanville (via NASDAQ)
While the news is all pretty good from an investment perspective, we're still in unknown territory. Continued monetary easing around the world may continue to drive markets up further.
http://jlne.ws/10n3CtO
Protecting Your Portfolio With Implied Volatility
Seeking Alpha
The global equity rally in developed nations has created significant headwinds for implied volatility. Implied volatility (IV) is the market's estimate of how much a security will move over a specific period of time on an annualized basis.
http://jlne.ws/10n4ZJ8
Tuesday, May 21, 2013
Big Hedge Funds Suddenly Bullish
LEAD STORIES
Big Hedge Funds Suddenly Bullish
Steven M. Sears, Barron's
A tectonic shift in the options market suggests that big money is now chasing the rally higher. Now bears get a discount.
http://jlne.ws/12K47kL
Equity options rebound in April
FOW
US market growth has driven the most active April in US equity options history, indicating a possible upturn after a lack-lustre first quarter's trading writes Jonathan Watkins.
http://jlne.ws/14O5SNZ
The VIX: It Could Get Ugly Soon
Adam Warner, Schaeffer's Investment Research
Now, there's no law that says VIX has to move anywhere. Way back before anyone paid attention to VIX -- like in the 90s -- volatility didn't fluctuate all that much on a day-to-day basis. No one looked for a signal in every little VIX tweak, probably because there really wasn't one. So yes, it's a little odd VIX hasn't made new lows in two months now, but I'm not sure it's the biggest deal in the world.
http://jlne.ws/14OeLXK
Mini crash fuels calls for market structure overhaul
The Trade
A 'mini flash crash' that wiped out the value of a US stock has again suggested US market structure distress, days after a roundtable saw captains of the finance industry agree that regulators should be careful not to interfere with a well-functioning system.
http://jlne.ws/14O6Nhu
Fed official urges a slowdown to high-speed trading
Ronald D. Orol, MarketWatch
A paper presented Tuesday by a Federal Reserve official calls for a major market structure change by having trades executed every half-second, instead of the current nonstop steam of trades that exists with today’s high-speed markets.
http://jlne.ws/14O79o7
S&P 500 May Reach 2,100, Goldman Sachs Says
Whitney Kisling, Bloomberg
Goldman Sachs Group Inc. said the U.S. stock-market rally may last at least another 2 1/2 years, sending the Standard & Poor’s 500 Index (SPX) up 26 percent to 2,100.
http://jlne.ws/14OdZKn
Videocast: VIX traders target 13 level
optionMONSTER
http://jlne.ws/14OdIad
EXCHANGES
EU antitrust regulators to rule on ICE, NYSE deal by June 24
Reuter (via Yahoo News)
European antitrust regulators will decide by June 24 whether to clear an $8.2 billion (5.4 billion pounds) takeover bid by IntercontinentalExchange Inc for New York Stock Exchange operator NYSE Euronext .
http://jlne.ws/14O7qrd
CME Plans to Cut Board Size
Jacob Bunge, The Wall Street Journal
The chairman of CME Group Inc. said the exchange operator plans further cuts to a 30-member board that is twice as large as its closest U.S. rivals.
http://jlne.ws/11W3isl
CBOE Holdings Files Additional Definitive Materials With Respect To 2013 Annual Meeting
Press Release (CBOE)
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that the company has filed additional definitive materials with the Securities and Exchange Commission with respect to the company's 2013 Annual Meeting of Stockholders. In particular, the additional definitive materials note that Douglas H. Shulman has withdrawn his candidacy for election to the company's Board of Directors at the 2013 Annual Meeting of Stockholders. Mr. Shulman was standing for election as a new director to serve until the 2014 Annual Meeting of Stockholders.
http://jlne.ws/14OcLik
OCC Takes Silver at The FCS Portfolio Awards in The Best Annual Report Category
Press Release
OCC announced today that its 2011 annual report took Silver (the only award given) in the Best Annual Report category at the 2013 FCS Portfolio Awards presented by the Financial Communications Society in New York City on May 16, 2013.
http://jlne.ws/14Obp76
Memorial Day Observance
NYSE Arca Equities, NYSE Amex Options, and NYSE Arca Options Traders
n observance of Memorial Day holiday, the New York Stock Exchange, NYSE MKT, NYSE Arca, NYSE Arca Options, NYSE Amex Options, and NYSE Bonds exchanges will be closed Monday May 27, 2013
For more information on holidays, please see NYSE Euronext Holidays & Hours.
REGULATION
ICE Joins CME Warning of Splits in Global Derivatives Rules
Silla Brush, Bloomberg
Top executives of the two largest U.S. derivatives exchanges say regulators must take further steps to align Dodd-Frank Act rules with those of foreign counterparts to avoid oversight splits that could harm markets.
http://jlne.ws/14O7Dea
Ex-IRS commissioner withdraws bid for CBOE board seat
Samantha Bomkamp, Chicago Tribune
CBOE Holdings Inc. said former IRS Commissioner Douglas H. Shulman has withdrawn his bid for election to the company's board days before its annual meeting as he prepares to testify before Congress about allegations that the IRS targeted conservative groups with extra scrutiny.
http://jlne.ws/14Odz6I
CFTC Said Preparing ISDAfix Probe Talks in Weeks: Credit Markets
Matthew Leising, Bloomberg
Commodity Futures Trading Commission investigators are poring over 1 million e-mails and instant messages as part of their price-manipulation probe of a swaps benchmark that helps determine interest rates on everything from annuities to bonds linked to skyscrapers.
http://jlne.ws/14O8bAz
Comment Period for Automated Systems Rule Extended 45 Days
Tom Steinert-Threlkeld, Traders Magazine
The Securities and Exchange Commission has extended the period for commenting on its proposed standard for the maintenance of automated systems used in securities trading by 45 days.
The federal regulator pushed back the due date for all comments on its proposed Regulation Systems Compliance and Integrity to July 8, from May 24.
http://jlne.ws/14O7Vlb
RBI puts foot down on put-and-call options in realty sector [India]
MoneyControl
The government's latest move to legalise put-and-call options will clear the way for many M&A deals in India. But real estate deals that guaranteed an assured return are yet to be approved by the RBI, reports CNBC-TV18’s Gopika Gopakumar.
http://jlne.ws/14OczPZ
STRATEGY
Call and put options: Enforceable tools with PE investors
Lalit Kumar, VCCircle
Once put and call options are made valid, they can be used by PE investors to structure their investments.
http://jlne.ws/14OcnAv
ETFs? Here's What You Should Know
Jeff Brown, CNBC
Investing in stocks and bonds has become easier and easier over the years. First, there were mutual funds, then index funds. Now, exchange-traded funds are all the rage.
http://jlne.ws/14OcUCr
Big Hedge Funds Suddenly Bullish
Steven M. Sears, Barron's
A tectonic shift in the options market suggests that big money is now chasing the rally higher. Now bears get a discount.
http://jlne.ws/12K47kL
Equity options rebound in April
FOW
US market growth has driven the most active April in US equity options history, indicating a possible upturn after a lack-lustre first quarter's trading writes Jonathan Watkins.
http://jlne.ws/14O5SNZ
The VIX: It Could Get Ugly Soon
Adam Warner, Schaeffer's Investment Research
Now, there's no law that says VIX has to move anywhere. Way back before anyone paid attention to VIX -- like in the 90s -- volatility didn't fluctuate all that much on a day-to-day basis. No one looked for a signal in every little VIX tweak, probably because there really wasn't one. So yes, it's a little odd VIX hasn't made new lows in two months now, but I'm not sure it's the biggest deal in the world.
http://jlne.ws/14OeLXK
Mini crash fuels calls for market structure overhaul
The Trade
A 'mini flash crash' that wiped out the value of a US stock has again suggested US market structure distress, days after a roundtable saw captains of the finance industry agree that regulators should be careful not to interfere with a well-functioning system.
http://jlne.ws/14O6Nhu
Fed official urges a slowdown to high-speed trading
Ronald D. Orol, MarketWatch
A paper presented Tuesday by a Federal Reserve official calls for a major market structure change by having trades executed every half-second, instead of the current nonstop steam of trades that exists with today’s high-speed markets.
http://jlne.ws/14O79o7
S&P 500 May Reach 2,100, Goldman Sachs Says
Whitney Kisling, Bloomberg
Goldman Sachs Group Inc. said the U.S. stock-market rally may last at least another 2 1/2 years, sending the Standard & Poor’s 500 Index (SPX) up 26 percent to 2,100.
http://jlne.ws/14OdZKn
Videocast: VIX traders target 13 level
optionMONSTER
http://jlne.ws/14OdIad
EXCHANGES
EU antitrust regulators to rule on ICE, NYSE deal by June 24
Reuter (via Yahoo News)
European antitrust regulators will decide by June 24 whether to clear an $8.2 billion (5.4 billion pounds) takeover bid by IntercontinentalExchange Inc for New York Stock Exchange operator NYSE Euronext .
http://jlne.ws/14O7qrd
CME Plans to Cut Board Size
Jacob Bunge, The Wall Street Journal
The chairman of CME Group Inc. said the exchange operator plans further cuts to a 30-member board that is twice as large as its closest U.S. rivals.
http://jlne.ws/11W3isl
CBOE Holdings Files Additional Definitive Materials With Respect To 2013 Annual Meeting
Press Release (CBOE)
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that the company has filed additional definitive materials with the Securities and Exchange Commission with respect to the company's 2013 Annual Meeting of Stockholders. In particular, the additional definitive materials note that Douglas H. Shulman has withdrawn his candidacy for election to the company's Board of Directors at the 2013 Annual Meeting of Stockholders. Mr. Shulman was standing for election as a new director to serve until the 2014 Annual Meeting of Stockholders.
http://jlne.ws/14OcLik
OCC Takes Silver at The FCS Portfolio Awards in The Best Annual Report Category
Press Release
OCC announced today that its 2011 annual report took Silver (the only award given) in the Best Annual Report category at the 2013 FCS Portfolio Awards presented by the Financial Communications Society in New York City on May 16, 2013.
http://jlne.ws/14Obp76
Memorial Day Observance
NYSE Arca Equities, NYSE Amex Options, and NYSE Arca Options Traders
n observance of Memorial Day holiday, the New York Stock Exchange, NYSE MKT, NYSE Arca, NYSE Arca Options, NYSE Amex Options, and NYSE Bonds exchanges will be closed Monday May 27, 2013
For more information on holidays, please see NYSE Euronext Holidays & Hours.
REGULATION
ICE Joins CME Warning of Splits in Global Derivatives Rules
Silla Brush, Bloomberg
Top executives of the two largest U.S. derivatives exchanges say regulators must take further steps to align Dodd-Frank Act rules with those of foreign counterparts to avoid oversight splits that could harm markets.
http://jlne.ws/14O7Dea
Ex-IRS commissioner withdraws bid for CBOE board seat
Samantha Bomkamp, Chicago Tribune
CBOE Holdings Inc. said former IRS Commissioner Douglas H. Shulman has withdrawn his bid for election to the company's board days before its annual meeting as he prepares to testify before Congress about allegations that the IRS targeted conservative groups with extra scrutiny.
http://jlne.ws/14Odz6I
CFTC Said Preparing ISDAfix Probe Talks in Weeks: Credit Markets
Matthew Leising, Bloomberg
Commodity Futures Trading Commission investigators are poring over 1 million e-mails and instant messages as part of their price-manipulation probe of a swaps benchmark that helps determine interest rates on everything from annuities to bonds linked to skyscrapers.
http://jlne.ws/14O8bAz
Comment Period for Automated Systems Rule Extended 45 Days
Tom Steinert-Threlkeld, Traders Magazine
The Securities and Exchange Commission has extended the period for commenting on its proposed standard for the maintenance of automated systems used in securities trading by 45 days.
The federal regulator pushed back the due date for all comments on its proposed Regulation Systems Compliance and Integrity to July 8, from May 24.
http://jlne.ws/14O7Vlb
RBI puts foot down on put-and-call options in realty sector [India]
MoneyControl
The government's latest move to legalise put-and-call options will clear the way for many M&A deals in India. But real estate deals that guaranteed an assured return are yet to be approved by the RBI, reports CNBC-TV18’s Gopika Gopakumar.
http://jlne.ws/14OczPZ
STRATEGY
Call and put options: Enforceable tools with PE investors
Lalit Kumar, VCCircle
Once put and call options are made valid, they can be used by PE investors to structure their investments.
http://jlne.ws/14OcnAv
ETFs? Here's What You Should Know
Jeff Brown, CNBC
Investing in stocks and bonds has become easier and easier over the years. First, there were mutual funds, then index funds. Now, exchange-traded funds are all the rage.
http://jlne.ws/14OcUCr
Monday, May 20, 2013
NYSE Voids Penny Trades in Anadarko From Last Minute of Trading
LEAD STORIES
NYSE Voids Penny Trades in Anadarko From Last Minute of Trading
Whitney Kisling & Nikolaj Gammeltoft, Bloomberg
The New York Stock Exchange broke trades in Anadarko Petroleum Corp. (APC) after the shares briefly plunged 99 percent in the final minute of today’s session.
http://jlne.ws/12oRWbi
Why QE, low interest rates and volatility are an explosive mix for the markets
Simone Foxman, Quartz
Critics of quantitative easing (QE)—whereby central banks push down interest rates and buy up safe assets to stimulate flagging economies—have long worried about the possible unintended consequences. The point of QE is to push down the yields on safe assets like government bonds so that investors put their money in riskier assets where it can do more economic work; the worry is that too much money in risky assets could blow up in investors’ faces.
http://jlne.ws/14pd5EC
15 Most Overbought S&P 500 Stocks
Tom Aspray, Forbes
Stocks continued higher for the fourth week in a row as the major averages have already easily exceeded the most bullish Wall Street forecasts for the entire year. All of the major averages are all showing double-digit gains, which was suggested in late 2012 by the upside breakout of the NYSE A/D line.
http://jlne.ws/14pckeE
Dealmaking fails to send Wall St higher
Arash Massoudi, Financial Times
US stocks saw muted losses that sent the S&P retreating from record levels, despite a burst of dealmaking to start the week.
The S&P 500 edged fractionally lower to 1,667.29 by the early afternoon in New York.
http://jlne.ws/18ZlXDJ
A Difficult Point In The Market Cycle For Investors To Navigate
David I. Templeton, Seeking Alpha
As the market continues to seemingly move higher every day, investor complacency appears to be on the rise. The recent CBOE equity put/call ratio is at a low level of .50. Like other sentiment indicators, this measure tends to be more accurate at extremes.
http://jlne.ws/14pbPkN
Best 100 Hedge Funds
Eric Uhlfelder, Barron's
Our ranking of the top-performing funds. Who has averaged a 50%-plus annual return for three years?
http://jlne.ws/14p3Rs1
Analysis: High speed trading a stiff challenge for U.S. regulators
Christine Stebbins, Reuters (via Chicago Tribune)
Financial trading in world markets has grown so lightning-fast that effective regulation is growing tougher by the second, increasing the threat of crashes sparked by hoaxes, electronic glitches or yet-unknown causes.
http://jlne.ws/14p5g1Q
Correction talk gets old as rally sails along
Angela Moon, Reuters
With the broad S&P 500 Index gliding once again into uncharted territory and posting four straight weeks of gains, the talk of Wall Street's rally inevitably hitting a ceiling is starting to get old.
http://jlne.ws/14p6zO3
Is VIX Index Forecasting A Stock Market Surprise?
Wall Street Sector Selector
In recent days, the VIX index, the CBOE S&P 500 Volatility Index, also known as the fear index, has dipped back into extremely low territory, indicating high investor complacency and confidence in the short term future of low volatility and higher stock market prices.
http://jlne.ws/14p6OZI
Derivatives Reform on the Ropes
The New York Times (Editorial)
New rules to regulate derivatives, adopted last week by the Commodity Futures Trading Commission, are a victory for Wall Street and a setback for financial reform. They may also signal worse things to come.
http://jlne.ws/14p7iij
Videocast: Late May action in VIX pits
optionMONSTER
http://jlne.ws/14pbqyT
EXCHANGES
The Rich Past and Uncertain Future of the NYSE
Phil Albinus, Advanced Trading
On the anniversary of its founding, the New York Stock Exchange shows signs of strength in an uncertain world.
http://jlne.ws/14p7SfV
HKMEx surrenders trading license
The Asset
The Hong Kong Mercantile Exchange (HKMEx) has decided to voluntarily surrender the authorization to provide automated trading services (ATS) granted by the Securities and Futures Commission (the SFC). With immediate effect, no new orders may be placed and all open positions will be financially settled at the settlement price determined by HKMEx and its designated clearinghouse.
http://jlne.ws/17TqpF4
IntercontinentalExchange Announces 2013 Annual Meeting Results
Press Release (ICE)
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, announced today the result of the company's 2013 Annual Meeting of Stockholders, which was held May 17, 2013.
http://jlne.ws/14paDxZ
REGULATION
Regulators Compromise on Swaps RFQ Rule, So Are the Banks Winning?
Ivy Schmerken, Advanced Trading
CFTC commissioners compromised on key rules that now require asset managers to contact two banks for prices on derivatives, rather than five, which was opposed by banks and lobbyists.
http://jlne.ws/14p7Gxo
TECHNOLOGY
MarketDelta Licenses Trading Technologies’ Entire Patent Portfolio
Press Release (TT)
MarketDelta Trader LLC (MarketDelta) and Trading Technologies International, Inc. (TT) today announced they have entered into a licensing agreement under which MarketDelta will license TT's entire patent portfolio, which includes more than 400 patents for electronic trading in financial markets.
http://jlne.ws/14paVVt
STRATEGY
A Call for Cyclicals
Steven M. Sears, Barron's
The stock market might not offer investors any free lunches, but the options market comes close to doing so. It sometimes disconnects temporarily from stocks, letting investors buy calls and puts without paying greed or fear premiums that otherwise would inflate their prices.
http://jlne.ws/14p5Ex4
Tap into oil volatility using an options spread
James Ramelli, Futures
Over the past week crude oil prices have been rocked by conflicting macroeconomic data and a suspected price-fixing scandal, and the resultant price swings have left many investors questioning the validity of the current price levels.
http://jlne.ws/14p62Md
Ratio Spread ETF Option Strategy Explained
Justin Kuepper, ETF Database
Exchange-traded funds (“ETFs”) have become an invaluable tool for investors looking for exposure to every corner of the market. While ETFs provide investors with diversified exposure, stock options are a great way to further hone their effectiveness. In this article, we’ll take a look at how one such strategy can be used to capitalize on sideways markets.
http://jlne.ws/14p8sub
EVENTS
CBOE, Barron's Co-Host Symposium and Live Webcast on 40 Years of Options Innovation
Press Release (CBOE)
The Chicago Board Options Exchange (CBOE) and Barron's will broadcast a free, live webcast of a co-hosted symposium featuring key options industry figures discussing the 40th anniversary of CBOE and the U.S. options industry. The 90-minute webcast, broadcast live from CBOE, will begin at 4 p.m. CT on Wednesday, May 22, 2013.
http://jlne.ws/14pac6O
NYSE Voids Penny Trades in Anadarko From Last Minute of Trading
Whitney Kisling & Nikolaj Gammeltoft, Bloomberg
The New York Stock Exchange broke trades in Anadarko Petroleum Corp. (APC) after the shares briefly plunged 99 percent in the final minute of today’s session.
http://jlne.ws/12oRWbi
Why QE, low interest rates and volatility are an explosive mix for the markets
Simone Foxman, Quartz
Critics of quantitative easing (QE)—whereby central banks push down interest rates and buy up safe assets to stimulate flagging economies—have long worried about the possible unintended consequences. The point of QE is to push down the yields on safe assets like government bonds so that investors put their money in riskier assets where it can do more economic work; the worry is that too much money in risky assets could blow up in investors’ faces.
http://jlne.ws/14pd5EC
15 Most Overbought S&P 500 Stocks
Tom Aspray, Forbes
Stocks continued higher for the fourth week in a row as the major averages have already easily exceeded the most bullish Wall Street forecasts for the entire year. All of the major averages are all showing double-digit gains, which was suggested in late 2012 by the upside breakout of the NYSE A/D line.
http://jlne.ws/14pckeE
Dealmaking fails to send Wall St higher
Arash Massoudi, Financial Times
US stocks saw muted losses that sent the S&P retreating from record levels, despite a burst of dealmaking to start the week.
The S&P 500 edged fractionally lower to 1,667.29 by the early afternoon in New York.
http://jlne.ws/18ZlXDJ
A Difficult Point In The Market Cycle For Investors To Navigate
David I. Templeton, Seeking Alpha
As the market continues to seemingly move higher every day, investor complacency appears to be on the rise. The recent CBOE equity put/call ratio is at a low level of .50. Like other sentiment indicators, this measure tends to be more accurate at extremes.
http://jlne.ws/14pbPkN
Best 100 Hedge Funds
Eric Uhlfelder, Barron's
Our ranking of the top-performing funds. Who has averaged a 50%-plus annual return for three years?
http://jlne.ws/14p3Rs1
Analysis: High speed trading a stiff challenge for U.S. regulators
Christine Stebbins, Reuters (via Chicago Tribune)
Financial trading in world markets has grown so lightning-fast that effective regulation is growing tougher by the second, increasing the threat of crashes sparked by hoaxes, electronic glitches or yet-unknown causes.
http://jlne.ws/14p5g1Q
Correction talk gets old as rally sails along
Angela Moon, Reuters
With the broad S&P 500 Index gliding once again into uncharted territory and posting four straight weeks of gains, the talk of Wall Street's rally inevitably hitting a ceiling is starting to get old.
http://jlne.ws/14p6zO3
Is VIX Index Forecasting A Stock Market Surprise?
Wall Street Sector Selector
In recent days, the VIX index, the CBOE S&P 500 Volatility Index, also known as the fear index, has dipped back into extremely low territory, indicating high investor complacency and confidence in the short term future of low volatility and higher stock market prices.
http://jlne.ws/14p6OZI
Derivatives Reform on the Ropes
The New York Times (Editorial)
New rules to regulate derivatives, adopted last week by the Commodity Futures Trading Commission, are a victory for Wall Street and a setback for financial reform. They may also signal worse things to come.
http://jlne.ws/14p7iij
Videocast: Late May action in VIX pits
optionMONSTER
http://jlne.ws/14pbqyT
EXCHANGES
The Rich Past and Uncertain Future of the NYSE
Phil Albinus, Advanced Trading
On the anniversary of its founding, the New York Stock Exchange shows signs of strength in an uncertain world.
http://jlne.ws/14p7SfV
HKMEx surrenders trading license
The Asset
The Hong Kong Mercantile Exchange (HKMEx) has decided to voluntarily surrender the authorization to provide automated trading services (ATS) granted by the Securities and Futures Commission (the SFC). With immediate effect, no new orders may be placed and all open positions will be financially settled at the settlement price determined by HKMEx and its designated clearinghouse.
http://jlne.ws/17TqpF4
IntercontinentalExchange Announces 2013 Annual Meeting Results
Press Release (ICE)
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, announced today the result of the company's 2013 Annual Meeting of Stockholders, which was held May 17, 2013.
http://jlne.ws/14paDxZ
REGULATION
Regulators Compromise on Swaps RFQ Rule, So Are the Banks Winning?
Ivy Schmerken, Advanced Trading
CFTC commissioners compromised on key rules that now require asset managers to contact two banks for prices on derivatives, rather than five, which was opposed by banks and lobbyists.
http://jlne.ws/14p7Gxo
TECHNOLOGY
MarketDelta Licenses Trading Technologies’ Entire Patent Portfolio
Press Release (TT)
MarketDelta Trader LLC (MarketDelta) and Trading Technologies International, Inc. (TT) today announced they have entered into a licensing agreement under which MarketDelta will license TT's entire patent portfolio, which includes more than 400 patents for electronic trading in financial markets.
http://jlne.ws/14paVVt
STRATEGY
A Call for Cyclicals
Steven M. Sears, Barron's
The stock market might not offer investors any free lunches, but the options market comes close to doing so. It sometimes disconnects temporarily from stocks, letting investors buy calls and puts without paying greed or fear premiums that otherwise would inflate their prices.
http://jlne.ws/14p5Ex4
Tap into oil volatility using an options spread
James Ramelli, Futures
Over the past week crude oil prices have been rocked by conflicting macroeconomic data and a suspected price-fixing scandal, and the resultant price swings have left many investors questioning the validity of the current price levels.
http://jlne.ws/14p62Md
Ratio Spread ETF Option Strategy Explained
Justin Kuepper, ETF Database
Exchange-traded funds (“ETFs”) have become an invaluable tool for investors looking for exposure to every corner of the market. While ETFs provide investors with diversified exposure, stock options are a great way to further hone their effectiveness. In this article, we’ll take a look at how one such strategy can be used to capitalize on sideways markets.
http://jlne.ws/14p8sub
EVENTS
CBOE, Barron's Co-Host Symposium and Live Webcast on 40 Years of Options Innovation
Press Release (CBOE)
The Chicago Board Options Exchange (CBOE) and Barron's will broadcast a free, live webcast of a co-hosted symposium featuring key options industry figures discussing the 40th anniversary of CBOE and the U.S. options industry. The 90-minute webcast, broadcast live from CBOE, will begin at 4 p.m. CT on Wednesday, May 22, 2013.
http://jlne.ws/14pac6O
Friday, May 17, 2013
Regulators Target Exchanges As They Ready Record Fine
LEAD STORIES
Regulators Target Exchanges As They Ready Record Fine
Jenny Strasburg, Jean Eaglesham and Scott Patterson, The Wall Street Journal
Financial regulators are taking a harder line on exchanges amid concerns over their ability to police the markets they operate, as the SEC prepares to hit one with a record penalty.
http://jlne.ws/10Dgqv2
The Volatility Trade’s Not Dead Yet
InvestorPlace
With the CBOE Volatility Index and other volatility measures sagging to relative lows, one might think that the volatility trade is dead. Not the case, according to our options volume tracking filters which have identified some interesting options activity on the fear gauge, as the last few days have seen an unusual increase in call volume on the VIX proxy.
http://jlne.ws/12Hsn5I
Economic Reports Give VIX a Boost
Wall Street Sector Selector
We witnessed a good demonstration of Investor complacency on Thursday, as the Dow Jones Industrial Average managed to reach a record intraday high of 15,302.49 at 11:17, despite a good deal of surprisingly bad economic data.
http://jlne.ws/12HpK3X
The Bigger VIX-ture
Adam Warner, Schaeffer's Investment Research
We get some questions on Twitter, sometimes even related to the CBOE Market Volatility Index.
"...Seems most of your post [sic] on the VIX stuff is negative biased expecting lower moves. When it jumps you do the same?"
It's a fair point. I imagine I come off as bearish on volatility with a tendency to read every sporadic sign of VIX strength as unsustainable and ultimately bullish for the market.
http://jlne.ws/12HuvKJ
Videocast: Traders shift as VIX drops
optionMONSTER
http://jlne.ws/12Hunei
S&P 500 has more room to run: technical analysis
Jonathan Ratner, Financial Post
Many investors think a correction must be around the corner given the recent strength in U.S. equities, but history suggests otherwise.
The S&P 500 is up more than 15% year-to-date and continues to hit all-time highs, recently pushing the index above 1,650.
http://jlne.ws/12Hu7Mp
ETPs Turn To Selling Options To Generate Income
Bill Luby, ETF Daily News
Not long after I penned The Options and Volatility ETPs Landscape, Credit Suisse (CS) added another buy-write / covered call ETP to the mix: the Credit Suisse Silver Shares Covered Call ETN (SLVO).
With SLVO, Credit Suisse is essentially extending the methodology they pioneered with the Credit Suisse Gold Shares Covered Call ETN (GLDI).
http://jlne.ws/12HtWk5
Exchange-traded funds entering new phase of growth
Mark Jewell, BloombergBusinessweek
The headlines about exchange-traded funds suggest there are no limits to the growth of these low-cost, easily traded alternatives to mutual funds.
http://jlne.ws/12HsCOi
Decision on put, call options to boost foreign investments: CII [India]
The Economic Times
NEW DELHI: The proposal to allow 'put' and 'call' options in share purchase agreements would encourage inflow of foreign investment, industry body CII said today.
http://jlne.ws/12HqZ38
Competition among copycats and creatives
FOW
Ask a panel of listed derivatives leaders where innovation is going to come from in the market and you can't be too surprised if the answer is somewhat guarded.
Nevertheless, the London audience of this week's Futures and Options Association Infonet would still have gleaned a few important take-aways from the panel discussion.
http://jlne.ws/12AQZ1s
Banks lift FTSE to 5.5-year highs
Alistair Smout, Reuters
The FTSE top share index hit fresh five and a half year highs on Friday, as banks were buoyed by an upgrade, the prospect of the end of state ownership in the sector and rotation out of defensive stocks.
http://jlne.ws/12HoKwL
EXCHANGES
ICE Clear Europe Named 2013 Clearing House of the Year by Energy Risk Magazine
Press Release (ICE)
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, announced today that ICE Clear Europe has been named Clearing House of the Year for 2013 by Energy Risk magazine.
http://jlne.ws/YOhcZy
The Birth of the World's Greatest Stock Exchange
Alex Planes, The Motley Fool
On this day in economic and business history...
The New York Stock Exchange was founded on May 17, 1792, when 24 stockbrokers signed an agreement establishing the basic rules for stock trading.
http://jlne.ws/12HtthT
REGULATION
CFTC Moves the Ball Forward on Swap Execution
Doug Ashburn, John Lothian Newsletter
The CFTC votes 4-1 on a package of new rules that nobody likes very much, including the CFTC. Nasdaq posts the latest trading halt caused by a system fault. Regulators prepare to issue a big fine to an exchange, and are considering increasing their regulatory presence there in the future.
http://jlne.ws/12Hp1zP
Regulators Overhaul Derivatives Market, but With a Caveat
Ben Protess, Dealbook
Federal regulators approved new rules on Thursday to shine a light on Wall Street trading, but they also softened a crucial aspect of the plan in the face of lobbying pressure from the nation’s biggest banks.
http://jlne.ws/12HpySq
STRATEGY
How to Take Profits, but Fly Higher
Steven M. Sears, Barron's
Investors can lock in their gains on Delta while using call options to ride the rally if it continues.
http://jlne.ws/Z1G3eO
Regulators Target Exchanges As They Ready Record Fine
Jenny Strasburg, Jean Eaglesham and Scott Patterson, The Wall Street Journal
Financial regulators are taking a harder line on exchanges amid concerns over their ability to police the markets they operate, as the SEC prepares to hit one with a record penalty.
http://jlne.ws/10Dgqv2
The Volatility Trade’s Not Dead Yet
InvestorPlace
With the CBOE Volatility Index and other volatility measures sagging to relative lows, one might think that the volatility trade is dead. Not the case, according to our options volume tracking filters which have identified some interesting options activity on the fear gauge, as the last few days have seen an unusual increase in call volume on the VIX proxy.
http://jlne.ws/12Hsn5I
Economic Reports Give VIX a Boost
Wall Street Sector Selector
We witnessed a good demonstration of Investor complacency on Thursday, as the Dow Jones Industrial Average managed to reach a record intraday high of 15,302.49 at 11:17, despite a good deal of surprisingly bad economic data.
http://jlne.ws/12HpK3X
The Bigger VIX-ture
Adam Warner, Schaeffer's Investment Research
We get some questions on Twitter, sometimes even related to the CBOE Market Volatility Index.
"...Seems most of your post [sic] on the VIX stuff is negative biased expecting lower moves. When it jumps you do the same?"
It's a fair point. I imagine I come off as bearish on volatility with a tendency to read every sporadic sign of VIX strength as unsustainable and ultimately bullish for the market.
http://jlne.ws/12HuvKJ
Videocast: Traders shift as VIX drops
optionMONSTER
http://jlne.ws/12Hunei
S&P 500 has more room to run: technical analysis
Jonathan Ratner, Financial Post
Many investors think a correction must be around the corner given the recent strength in U.S. equities, but history suggests otherwise.
The S&P 500 is up more than 15% year-to-date and continues to hit all-time highs, recently pushing the index above 1,650.
http://jlne.ws/12Hu7Mp
ETPs Turn To Selling Options To Generate Income
Bill Luby, ETF Daily News
Not long after I penned The Options and Volatility ETPs Landscape, Credit Suisse (CS) added another buy-write / covered call ETP to the mix: the Credit Suisse Silver Shares Covered Call ETN (SLVO).
With SLVO, Credit Suisse is essentially extending the methodology they pioneered with the Credit Suisse Gold Shares Covered Call ETN (GLDI).
http://jlne.ws/12HtWk5
Exchange-traded funds entering new phase of growth
Mark Jewell, BloombergBusinessweek
The headlines about exchange-traded funds suggest there are no limits to the growth of these low-cost, easily traded alternatives to mutual funds.
http://jlne.ws/12HsCOi
Decision on put, call options to boost foreign investments: CII [India]
The Economic Times
NEW DELHI: The proposal to allow 'put' and 'call' options in share purchase agreements would encourage inflow of foreign investment, industry body CII said today.
http://jlne.ws/12HqZ38
Competition among copycats and creatives
FOW
Ask a panel of listed derivatives leaders where innovation is going to come from in the market and you can't be too surprised if the answer is somewhat guarded.
Nevertheless, the London audience of this week's Futures and Options Association Infonet would still have gleaned a few important take-aways from the panel discussion.
http://jlne.ws/12AQZ1s
Banks lift FTSE to 5.5-year highs
Alistair Smout, Reuters
The FTSE top share index hit fresh five and a half year highs on Friday, as banks were buoyed by an upgrade, the prospect of the end of state ownership in the sector and rotation out of defensive stocks.
http://jlne.ws/12HoKwL
EXCHANGES
ICE Clear Europe Named 2013 Clearing House of the Year by Energy Risk Magazine
Press Release (ICE)
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, announced today that ICE Clear Europe has been named Clearing House of the Year for 2013 by Energy Risk magazine.
http://jlne.ws/YOhcZy
The Birth of the World's Greatest Stock Exchange
Alex Planes, The Motley Fool
On this day in economic and business history...
The New York Stock Exchange was founded on May 17, 1792, when 24 stockbrokers signed an agreement establishing the basic rules for stock trading.
http://jlne.ws/12HtthT
REGULATION
CFTC Moves the Ball Forward on Swap Execution
Doug Ashburn, John Lothian Newsletter
The CFTC votes 4-1 on a package of new rules that nobody likes very much, including the CFTC. Nasdaq posts the latest trading halt caused by a system fault. Regulators prepare to issue a big fine to an exchange, and are considering increasing their regulatory presence there in the future.
http://jlne.ws/12Hp1zP
Regulators Overhaul Derivatives Market, but With a Caveat
Ben Protess, Dealbook
Federal regulators approved new rules on Thursday to shine a light on Wall Street trading, but they also softened a crucial aspect of the plan in the face of lobbying pressure from the nation’s biggest banks.
http://jlne.ws/12HpySq
STRATEGY
How to Take Profits, but Fly Higher
Steven M. Sears, Barron's
Investors can lock in their gains on Delta while using call options to ride the rally if it continues.
http://jlne.ws/Z1G3eO
Thursday, May 16, 2013
Nasdaq's PHLX Options Market Has 'Issues,' Halts Some Trading
LEAD STORIES
Nasdaq's PHLX Options Market Has 'Issues,' Halts Some Trading
Jacob Bunge, NASDAQ
Nasdaq OMX Group Inc. ( NDAQ ) on Thursday halted trading in some stock-options contracts on its largest options exchange due to "system issues," according to notices sent to traders.
http://jlne.ws/12ykG3b
NYSE Looks to Cull List of Penny Names
Peter Chapman, Traders Magazine
In a move intended to reduce quote traffic and the exchange operator’s administrative burden, NYSE Euronext is proposing to cut significantly the number of options subject to penny trading and to end the so-called “Penny Pilot” program.
http://jlne.ws/12ylOUm
5 Theories Behind the VIX Stagnation
Adam Warner, Schaeffer's Investment Research
The market goes up every day, and yet the CBOE Market Volatility Index (VIX) basically goes nowhere. We're up about 4% just since May 2, yet the VIX is pretty much unchanged since then. VIX actually hit its highest high in nine sessions yesterday, and the S&P 500 Index (SPX) hit yet another new high?
http://jlne.ws/10uP0LX
VIX Contango Comet - Profitable Observations
Stephen Aniston, Seeking Alpha
Some of the readers of my last article on volatility suggested that the trading model I outlined focused too much on the spot price of the VIX and not enough on the contango effect.
http://jlne.ws/10uPbaa
Investors’ Biggest Fear is Missing Out
Brendan Conway, Barron's
You can usually count on derivatives strategists to tease out some nice insights on the state of market psychology. Right now, this group’s view of indexes and exchange-traded funds suggests investors are fearful. But not in the way that’s been prevalent since the financial crisis.
http://jlne.ws/10uQ42o
*Missing out is probably a lot of people's big fear - right after public speaking. -- SR
Bloomberg Snooping Scandal Prompts Reaction from Goldman
Ivy Schmerken, Advanced Trading
Wall Street firms like Goldman Sachs could look to reduce their reliance on the dominant data and analytics terminal in response to the firms' reporters being allowed to spy on customer data.
http://jlne.ws/12ylcya
Morning MoneyBeat: ‘Sell in May and Go Away’ Is Working, Seriously
Steven Russolillo, The Wall Street Journal
The “Sell in May and go away” trade is alive, just not in the form people anticipated.
The stock market is still kicking, but the bond market is showing serious signs of fatigue. As our Heard on the Street colleagues noted earlier this week, May’s selloff has wiped out year-to-date gains for holders of U.S. Treasurys, German bunds and U.K. gilts.
http://jlne.ws/12ylntl
CAST Issues Open Letter to Top Derivatives Exchanges
The Wall Street Journal
Today CAST (Euronext: CAS) issued an open letter to the top eight derivatives exchanges in Europe and North America. This comes in the wake of two major software outages at the Chicago Board Options Exchange, one of the top derivatives exchanges in the world, which resulted in the late opening of stock options and the closure of the exchange for several hours.
http://jlne.ws/107sSYv
*CAST reports that 6 out of 8 of the top exchanges have "managed to stay out of the headlines" in the past 12 months. -- SR
Law Ministry clears 'put' and 'call' options in share purchase pacts [India]
Economic Times
NEW DELHI: Foreign investment in Indian firms is all set to get a boost as government has decided to move ahead with a proposal to allow "put" and "call" options in share purchase agreements to permit listed companies to buy or sell equity at a predetermined price in future.
http://jlne.ws/10uLMIr
Videocast: View of VIX before settlement
optionMONSTER
http://jlne.ws/10uN7yT
EXCHANGES
S&P Raises Outlook on CME Group to Stable From Negative
Tess Stynes, The Wall Street Journal
Standard & Poor's Ratings Services raised its outlook on CME Group Inc.'s (CME) investment-grade ratings to stable from negative on expectations that the exchange operator's modestly weaker profitability and credit metrics should stabilize at current levels.
http://jlne.ws/104DJz0
CME Group Announces Open Interest for WTI-Brent Crude Oil Spread Options Contract Exceeds 125,000 for First Time
Press Release (CME)
CME Group, the world's leading and most diverse derivatives marketplace, today announced it reached a record in open interest for its NYMEX WTI-Brent Crude Oil Spread Option contract (BV) yesterday, May 14. Open interest in NYMEX BV reached 126,675 contracts, compared to 123,075 on May 13, 2013, the last record for this contract.
http://jlne.ws/15PzUW0
REGULATION
U.S. regulator sets final rules for swaps trading
Douwe Miedema, Thomson Reuters
The top U.S. derivatives regulator unveiled rules for swaps trading that could break open Wall Street's dominance of the $630 trillion market, yet contain important concessions to the industry.
http://jlne.ws/12ynAos
TECHNOLOGY
NASDAQ OMX Successfully Delivers SMARTS to Financial Conduct Authority (FCA) to Enhance Market Surveillance Capabilities
GlobeNewswire (via NASDAQ)
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the Financial Conduct Authority (FCA), an independent body that regulates the financial services industry in the United Kingdom, today announced that the FCA has officially gone live with NASDAQ OMX's SMARTS Integrity market surveillance platform to enhance its monitoring of transaction reports across the UK's financial markets.
http://jlne.ws/10Xrsew
STRATEGY
How to Trade This Market: Quickly
Steven M. Sears, Barron's
Options traders are profiting from the momentum by purchasing short-dated weekly calls that just keep going up.
http://jlne.ws/148fnYG
A Rare Bird: The Tax-Efficient Alternative
Philip Guziec, Morningstar
Alternative investments may have appealing attributes for investors, but tax efficiency is rarely one of them. Whether the alternative strategy is attempting to arbitrage small price differences between stocks, or shorting companies in anticipation of an imminent price decline, the nature of many alternative strategies generally leads to frequent realization of short-term capital gains.
http://jlne.ws/10uOpdg
** This strategy uses both stocks and options. -JB
Nasdaq's PHLX Options Market Has 'Issues,' Halts Some Trading
Jacob Bunge, NASDAQ
Nasdaq OMX Group Inc. ( NDAQ ) on Thursday halted trading in some stock-options contracts on its largest options exchange due to "system issues," according to notices sent to traders.
http://jlne.ws/12ykG3b
NYSE Looks to Cull List of Penny Names
Peter Chapman, Traders Magazine
In a move intended to reduce quote traffic and the exchange operator’s administrative burden, NYSE Euronext is proposing to cut significantly the number of options subject to penny trading and to end the so-called “Penny Pilot” program.
http://jlne.ws/12ylOUm
5 Theories Behind the VIX Stagnation
Adam Warner, Schaeffer's Investment Research
The market goes up every day, and yet the CBOE Market Volatility Index (VIX) basically goes nowhere. We're up about 4% just since May 2, yet the VIX is pretty much unchanged since then. VIX actually hit its highest high in nine sessions yesterday, and the S&P 500 Index (SPX) hit yet another new high?
http://jlne.ws/10uP0LX
VIX Contango Comet - Profitable Observations
Stephen Aniston, Seeking Alpha
Some of the readers of my last article on volatility suggested that the trading model I outlined focused too much on the spot price of the VIX and not enough on the contango effect.
http://jlne.ws/10uPbaa
Investors’ Biggest Fear is Missing Out
Brendan Conway, Barron's
You can usually count on derivatives strategists to tease out some nice insights on the state of market psychology. Right now, this group’s view of indexes and exchange-traded funds suggests investors are fearful. But not in the way that’s been prevalent since the financial crisis.
http://jlne.ws/10uQ42o
*Missing out is probably a lot of people's big fear - right after public speaking. -- SR
Bloomberg Snooping Scandal Prompts Reaction from Goldman
Ivy Schmerken, Advanced Trading
Wall Street firms like Goldman Sachs could look to reduce their reliance on the dominant data and analytics terminal in response to the firms' reporters being allowed to spy on customer data.
http://jlne.ws/12ylcya
Morning MoneyBeat: ‘Sell in May and Go Away’ Is Working, Seriously
Steven Russolillo, The Wall Street Journal
The “Sell in May and go away” trade is alive, just not in the form people anticipated.
The stock market is still kicking, but the bond market is showing serious signs of fatigue. As our Heard on the Street colleagues noted earlier this week, May’s selloff has wiped out year-to-date gains for holders of U.S. Treasurys, German bunds and U.K. gilts.
http://jlne.ws/12ylntl
CAST Issues Open Letter to Top Derivatives Exchanges
The Wall Street Journal
Today CAST (Euronext: CAS) issued an open letter to the top eight derivatives exchanges in Europe and North America. This comes in the wake of two major software outages at the Chicago Board Options Exchange, one of the top derivatives exchanges in the world, which resulted in the late opening of stock options and the closure of the exchange for several hours.
http://jlne.ws/107sSYv
*CAST reports that 6 out of 8 of the top exchanges have "managed to stay out of the headlines" in the past 12 months. -- SR
Law Ministry clears 'put' and 'call' options in share purchase pacts [India]
Economic Times
NEW DELHI: Foreign investment in Indian firms is all set to get a boost as government has decided to move ahead with a proposal to allow "put" and "call" options in share purchase agreements to permit listed companies to buy or sell equity at a predetermined price in future.
http://jlne.ws/10uLMIr
Videocast: View of VIX before settlement
optionMONSTER
http://jlne.ws/10uN7yT
EXCHANGES
S&P Raises Outlook on CME Group to Stable From Negative
Tess Stynes, The Wall Street Journal
Standard & Poor's Ratings Services raised its outlook on CME Group Inc.'s (CME) investment-grade ratings to stable from negative on expectations that the exchange operator's modestly weaker profitability and credit metrics should stabilize at current levels.
http://jlne.ws/104DJz0
CME Group Announces Open Interest for WTI-Brent Crude Oil Spread Options Contract Exceeds 125,000 for First Time
Press Release (CME)
CME Group, the world's leading and most diverse derivatives marketplace, today announced it reached a record in open interest for its NYMEX WTI-Brent Crude Oil Spread Option contract (BV) yesterday, May 14. Open interest in NYMEX BV reached 126,675 contracts, compared to 123,075 on May 13, 2013, the last record for this contract.
http://jlne.ws/15PzUW0
REGULATION
U.S. regulator sets final rules for swaps trading
Douwe Miedema, Thomson Reuters
The top U.S. derivatives regulator unveiled rules for swaps trading that could break open Wall Street's dominance of the $630 trillion market, yet contain important concessions to the industry.
http://jlne.ws/12ynAos
TECHNOLOGY
NASDAQ OMX Successfully Delivers SMARTS to Financial Conduct Authority (FCA) to Enhance Market Surveillance Capabilities
GlobeNewswire (via NASDAQ)
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the Financial Conduct Authority (FCA), an independent body that regulates the financial services industry in the United Kingdom, today announced that the FCA has officially gone live with NASDAQ OMX's SMARTS Integrity market surveillance platform to enhance its monitoring of transaction reports across the UK's financial markets.
http://jlne.ws/10Xrsew
STRATEGY
How to Trade This Market: Quickly
Steven M. Sears, Barron's
Options traders are profiting from the momentum by purchasing short-dated weekly calls that just keep going up.
http://jlne.ws/148fnYG
A Rare Bird: The Tax-Efficient Alternative
Philip Guziec, Morningstar
Alternative investments may have appealing attributes for investors, but tax efficiency is rarely one of them. Whether the alternative strategy is attempting to arbitrage small price differences between stocks, or shorting companies in anticipation of an imminent price decline, the nature of many alternative strategies generally leads to frequent realization of short-term capital gains.
http://jlne.ws/10uOpdg
** This strategy uses both stocks and options. -JB
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