DTCC Selects Providers for Derivatives Distributed Ledger System
John D’Antona – Traders Magazine
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that it has selected IBM, in partnership with Axoni and R3, to provide a distributed ledger technology (“DLT”) framework to drive further improvements in derivatives post-trade lifecycle events. The firms will work collaboratively to re-platform DTCC’s Trade Information Warehouse (“TIW”), building a derivatives distributed ledger solution for post-trade processing based on existing TIW capabilities and interfaces with technology providers and market participants. The TIW service currently automates the record keeping, lifecycle events, and payment management for more than $11 trillion of cleared and bilateral credit derivatives.
****SD: FOW’s take on the story here
Why the China Manipulator Label Looks Increasingly Appealing to Trump
Narae Kim – Bloomberg
Donald Trump wasn’t the first U.S. presidential candidate since the century began to blast China for manipulating its currency for trade advantage, but it’s increasingly likely he’ll be the first to follow through on the threat once in office. That’s the perspective of economists at Bank of America Merrill Lynch, led by Helen Qiao, chief Greater China economist at the bank in Hong Kong, whose views have evolved in recent weeks given the sustained protectionist rhetoric coming from the incoming president.
S&P Global to Sell QuantHouse
Eugene Grygo – Financial Technology Forum
S&P Global has entered into a definitive agreement to sell Quant House SAS (QuantHouse) to a company owned by Pierre Feligioni, one of QuantHouse’s original founders, according to S&P Global officials, who decline to disclose terms of the transaction were not disclosed.
Binary options trading makes headway
Admire Moyo – ITWeb
Binary options trading, also known as digital options, is nearly as popular as forex trading now.
This is according to Adam Green, owner of BinaryOptionsRobots.co. The company recently published an infographic which shows the history of binary options from 1973 to 2016, and how it’s nearly catching up with forex trading.
Angela Merkel threatens to restrict EU single market access unless Theresa May accepts free movement
Michael Wilkinson – The Telegraph
Angela Merkel has stepped up pressure on Theresa May over Brexit by saying that the European Union must consider limiting UK access to the single market if it fails to accept free movement of EU citizens.
Pension funds weigh their options on clearing
Paulina Pielichata – Pensions & Investments
European pension funds might find it more economical to begin clearing their derivatives trades through central counterparties sooner rather than later, due to incoming bilateral rules. Central clearing has become mandatory for most players in the over-the-counter derivatives market under the European Market Infrastructure Regulation, except for pension funds. To clear in this way, they must post collateral with the central counterparty in the form of cash for variation margin or high-quality liquid assets for initial margin.
MIAX Options 2016 Trading Results in New All-Time Market Share and Revenue Records
MIAX Options Exchange today announced that annual market share on the exchange reached a new all-time record in 2016, with additional single day and quarterly market share records also set over the course of the year. In addition, total revenues and net revenues generated from MIAX Options increased 10.8% and 10.1%, respectively, over 2015’s total and net revenues, marking the fourth consecutive year that MIAX Options has experienced double digit growth in annual total and net revenues.
CBOE’s data subscription service migrating to CBOE Livevol Data Shop
Valentina Kirilova – LeapRate
Chicago Board Options Exchange CBOE Holdings, Inc. (NASDAQ: CBOE) announced that its historical market data service formerly operated by Market Data Express (MDX) will migrate to CBOE Livevol Data Shop.
HKEX reports new records in 2016 Market Statistics
Valentina Kirilova – LeapRate
Just a few days after Hong Kong Exchanges and Clearing Limited (HKEX) announced that USD/CNH futures volume rose to all-time high, the exchange published a set of market statistics for the full year of 2016. The year saw an outstanding performance in Hong Kong’s derivatives market with a number of new records set.
Regulation & Enforcement
As Trump eyes Dodd-Frank, Chicago’s trading interests gear up for a battle
Lynne Marek – Crain’s Chicago Business
For all the Trump team talk about gutting President Barack Obama’s landmark financial law, Chicago’s trading community is wagering that at least part of it will stick: swaps reform. Swaps were a villain in the Great Recession, and Obama’s 2010 Dodd-Frank Wall Street Reform & Consumer Protection Act pushed them from clubby, private bank transactions onto public platforms. There they became a welcome addition to the Chicago trading world.
Israel’s regulator warns Fairtrade P2P binary options exchange, gives it 7 days to halt activities SMN Weekly
Israel’s financial markets regulator, the Israel Securities Authority (ISA) has published on its site a warning that the local P2P binary options exchange Fairtrade is operating in violation with the country’s laws banning trade in binary options.
United States: US Commodity Futures Trading Commission Reproposes Position Limits Rule And Finalizes Aggregate Positions Rule
On December 5, 2016, the Commodity Futures Trading Commission voted unanimously to repropose regulations implementing limits on speculative futures and swaps positions as called for in the Dodd-Frank Act. In a separate vote, the CFTC approved final aggregation regulations, which are a key component of the CFTC’s existing position limits regime. The reproposal will be open for public comment for 60 days after publication in the Federal Register.
****SD: Recent recap in case you missed it.
IG Group reassures investors over French CfD crackdown
Ben Martin – The Telegraph
Britain’s biggest financial spread betting firm has sought to reassure investors it can weather a crackdown on contracts for difference (CfD) in France, the latest country to impose strict new rules on the controversial derivatives.
Hong Kong SFC Warns Against Four Unlicensed Online Brokerages
Hong Kong’s Securities and Futures Commission (SFC), the country’s main financial services watchdog, today issued its second warning in a week, adding a further four entities to its Alert List after it came to light that they were offering their services to the public without having the proper authorisation to do so…
Next on the list is binary options firm ICOption which trades online via www.icoption.com and is located at Hansa Bank Building, 1st Floor, Landsome Road, the Valley, Anguilla. Once again, this company has been using a bank account in Hong Kong in the name of Hong Fong Trade Ltd for settlement but is not authorised as a licensed entity, nor does it provide any confirmation that it falls under the jurisdiction of any of the other global regulators.
Master the Four Fears of Trading – Part 2
Bob Lang – CBOE Options Hub
Last week we discussed two of the four fears of trading, specifically the ‘fear of missing out’ and the ‘fear of loss’, today we’ll discuss the ‘fear of being wrong’ and the ‘fear of letting a gain turn into a loss’. Famed trader psychologist Mark Douglas talked about these fears in his stellar book ‘Trading in the Zone’. As traders and investors we all become gripped by the violent reactions of our own emotions.
What the VIX Fear Gauge Is Telling the Markets (BNP, DB)
While the major stock indices and the VIX – CBOE Volatility Index have generally displayed an inverse relationship, moving in different directions, this relationship broke down in December. That month, there were several sessions where both the VIX, which many investors use as a measure of market expectations of future volatility, rose along with the Standard & Poor’s 500 Index (S&P 500), according to The Wall Street Journal.
Weekend Review – VIX Options and Futures – 1/8/2017
With the stock market kicking off 2017 on a bullish note VIX tested the 2016 closing low finishing the week 0.05 above last year’s low of 11.27. The futures followed suit, especially the January contract which goes off the board two days before the 45th man to ascend to the presidency does so on January 20th.
Weekend Review – Volatility Indexes and ETPs – 1/8/2017
S&P 500 implied volatility was lower across all four time periods that are measured by CBOE Volatility Indexes last week. VXST finished the week at 9.19 which is actually a tad higher than the low for 2016. VIX also finished near the 2016 low of 11.27 but finished 0.05 above that level. As a Trump presidency looms over the markets, with all the rhetoric and fear of what this means for the world, it’s a bit amazing market volatility is so low.