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JLN Options: Dividend Trades Cease at Three Options Exchanges

Lead Stories

Dividend Trades Cease at Three Options Exchanges
Peter Chapman, Traders Magazine
The controversial practice of dividend-capture options trading has ground to a halt at three of the four floor-based exchanges that have offered it. According to data published by the International Securities Exchange, dividend trade volume disappeared at NYSE Arca, NYSE Amex and Chicago Board Options Exchange in November.
http://jlne.ws/12nLker
**A victory for Gary Katz and the ISE — SR

Hedge Funds Think the Fed Will Smother Market Volatility
Brendan Conway, Barron’s
Hedge funds are perfectly willing to take the other side of your bet on market volatility. In fact, Societe Generale’s strategists are calling it these traders’ number one conviction right now.
http://jlne.ws/12nLulZ

Brodsky leaves a transformed CBOE
Lynne Marek, Crain’s Chicago Business
As he steps down from more than 16 years running CBOE Holdings Inc., William Brodsky departs having transformed the exchange operator from a small Chicago member-run options organization into the world’s largest options exchange, now a public company with a half-billion dollars in revenue.
http://jlne.ws/SWLMgS

CBOE’s New CEO Tilly Pledges to Expand VIX Trading
Nandini Sukumar, Bloomberg
Edward Tilly, who will become chief executive officer of CBOE Holdings Inc. (CBOE) next year, said he will expand trading of the Chicago Board Options Exchange Volatility Index to drive growth at the biggest U.S. options market.
http://jlne.ws/SWLN48

European Options Trading Case Led U.S. to Current SAC Probe
 Joshua Gallu and David Glovin, BloombergBusinessweek
A U.S. investigation of possible insider trading at SAC Capital Advisors LP, the $14 billion hedge fund run by Steven A. Cohen, is linked to a 2010 regulatory lawsuit over allegedly illegal trades in InterMune Inc. (ITMN), according to a person with knowledge of the matter.
http://jlne.ws/12nIjL7

CFTC temporarily narrowing US persons definition for swaps
Jamila Trindle, Dow Jones Newswires
The Commodity Futures Trading Commission is working on a set of rules to boost disclosure in the swaps market, where financial institutions and companies trade risks related to everything from debt defaults to the fluctuations of interest rates and currencies.
http://jlne.ws/VDfGE5

Nikkei hits 8-month high over 9,700
The Daily Yomiuri
“Gains in index futures seemingly caused by hedge buying from investors who had sold call options prompted arbitrage trades involving selling of futures and buying of cash stocks,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc. “Such trades boosted the Nikkei further in the late morning and the early afternoon.”
http://jlne.ws/12nJr18

RBS hires Asia-Pacific head of futures and options
The Asset
The Royal Bank of Scotland (RBS) named Joseph Braitsch as Asia-Pacific head of futures and options business within RBS Prime Services. At the same time, he will also head the electronic futures execution team.
http://jlne.ws/12nKLB8

Newedge unveils radical restructuring
Michelle Price, Financial Times (subscription)
French brokerage Newedge today unveiled plans for an extensive restructure that will see the company split out its execution business into an agency only broker. The announcement comes amid a hostile trading and regulatory environment that “calls for action”, the company’s chief executive said.
http://jlne.ws/12nLEd5

Exchanges

Eurex plans to offer more index-based derivatives products
Press Release
Major European exchange Eurex will start offering derivatives products based on MSCI indices in 2013, as the bourse responds to the demands of the market.
http://jlne.ws/12nKDSf

ICE Announces 2013 UK Auction Calendar for EU Allowances
Press Release
 IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today announced the calendar for emissions auctions taking place on ICE Futures Europe in 2013. The auctions will be hosted by the Exchange on behalf of the UK’s Government Department of Energy and Climate Change (DECC)…
ICE Futures Europe offers futures and options contracts on four types of carbon units: EU Allowances (EUAs), Certified Emission Reductions (CERs), Emissions Reductions Units (ERUs) and European Union Aviation Allowances (EUAAs).
http://jlne.ws/12nJCcS

CBOE, C2, CFE, and CBSX Trading Schedule For the Christmas and New Year’s Holidays
Press Release
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 Christmas and New Year’s holidays:

Monday, December 24:
CBOE, C2 and CBSX equities products will close at 12:00 p.m. CT.
ETFs and Indices that normally close at 3:00 p.m. will close at noon.
ETFs and Indices that normally close at 3:15 p.m. will close at 12:15 p.m.

CBSX – All products will close at noon.

CFE futures products that normally close at 3:00 p.m. will close at 12:00 p.m. Futures products that normally close at 3:15 p.m. will close at 12:15 p.m. and Trade at Settlement (TAS) products will close at 12:12 p.m.

Tuesday, December 25:
CBOE, C2, CFE and CBSX will be closed.

Monday, December 31:
CBOE, C2, CFE and CBSX will have regular trading hours for all products.

Tuesday, January 1:
CBOE, C2, CFE and CBSX will be closed.

http://jlne.ws/UiqF5P

Regulation

U.S. regulator wins legal victory over mutual funds
Douwe Miedema and Aruna Viswanatha, Thomson Reuters
A federal judge upheld a new regulation governing the mutual funds industry on Wednesday, ruling against two industry trade groups that had sought to block a registration rule by the Commodities Futures Trade Commission.
http://jlne.ws/12nMiqT

Update on Lifting of SEC Moratorium on Active ETF Use of Derivatives
JD Supra
The staff of the U.S. Securities and Exchange Commission (the “SEC”) released no action relief (the “Letter”) addressed to recipients of 18 prior orders (the “Prior Orders”) granting exemptive relief to launch actively-managed exchange-traded funds (“ETFs”) on December 7, 2012.
http://jlne.ws/12nMs1C

Technology

OptionsCity Software expands Algo Store and developer community around Freeway
Press Release
OptionsCity Software, a leading provider of end-to-end electronic trading solutions, today announced the expansion of Algo Store, the firm’s online marketplace for traders and developers to create, purchase, and download trading algorithms available at algostore.optionscity.com.
http://jlne.ws/12nIzd3

Strategy

Trading Options On VIX: For Dummies
Seeking Alpha
Writing articles on various option strategies requires a broad knowledge of how options work, and volatility is one of the main components. So I read just about every article that I can on “the VIX” to gather as much information as I can to better understand how this works.
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p://jlne.ws/12nIUwg

** I don’t think trading any types of options is for dummies. — SR

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