ETH Liquidity Continues to Improve
Matt McFarland – CBOE Options Blog
CBOE’s Extended Trading Hours (ETH) offers trading in the Exchange’s flagship SPX, SPXW, and VIX option products beginning at 8:00 a.m. London time. CBOE made ETH available in March 2015 and has seen significant growth in 2017. Liquidity has continued to improve and has most recently dramatically increased with the entrance of two London-based dealers willing and able to commit capital to trades. Average daily volume has jumped from 4,400 contracts in 2016 to 7,500 in 2017, a 70% increase. August is on pace to be the best month of 2017 as CBOE is averaging over 12,000 contracts per day during ETH.
****SD: “I never sleep, ’cause sleep is the cousin of death.” – Nas in 1994’s hip-hop classic “N.Y. State Of Mind” (of course, it probably was said by ol’ Bill Shakespeare or Homer or somebody first.)
The evolving role of the Chief Data Officers
Siamak Amirghodsi, VP, Data Management and Analytics, Options Clearing Corporation – CIO Review
As we embark on the dawn of the fourth industrial revolution with all its economic promises and upheaval, we see data swiftly emerging as a critical asset in many industries. The traditional Chief Information Officer (CIO) role is being augmented by new roles such as Chief Data Officer (CDO) to bridge the gap between business, operation and information technology. Taking an overall approach to curation, alignment, operationalization and monetization of data in the new economy, the CDO provides a much-needed emphasis and general advocacy for data in the new era of a digital economy.
Point72 has just hired a new head of algo trading from Citadel
Point72 has poached a new head of algorithmic trading from Citadel in another sign that the family office is embracing a quantitative approach.
Jerrell Watts, the former head of algorithmic execution and order routing at Citadel, who has worked across both its hedge fund and securities business, joined Steve Cohen’s firm as head of algorithmic trading earlier this month.
****SD: Financial News on the move here.
UBS Said to Be Leaning Toward Frankfurt for EU Trading Hub
Jan-Henrik Foerster and Steven Arons – Bloomberg
UBS Group AG is leaning toward Frankfurt for its trading headquarters inside the European Union after Brexit, according to four people with knowledge of the matter.
****SD: For people looking at Frankfurt office space, a bit of random risk — Huge evacuation planned in Frankfurt after British WWII bomb found
“Safe-haven” euro could complicate ECB plan to roll back stimulus
Saikat Chatterjee – Reuters
The euro’s rise above $1.20 this week has prompted talk that it is becoming a safe haven for investors, posing a problem for the European Central Bank as it plans to roll back its huge economic stimulus in the coming months.
Bulls and bears both can’t be right on stocks — so here’s who’s right (for now)
John Mauldin – MarketWatch
Investors have many reasons to be cautious on stocks. Yet many are stalwartly bullish. Naturally, I have friends on both sides of the debate, people with deep knowledge and experience.
Problem is, they can’t all be right. The stock market will move up or down (or possibly sideways), and some of us will be wrong.
****JB: It is these differences of opinion that make markets work.
Connect the Dots, Episode 5: I Was Told There Would Be No Math
In this episode, Vonetta sits down with Tom Preston, the Chief Content Creator of tastytrade. Not only does he write the quippy Cherry Bomb emails that get sent to your inbox every week, but he’s also the architect of all the trading math that basically runs our world. No one loves school more than this dude, and his path from academia to options god is a fascinating one. If you love probabilities (and fish-based soups), this is the episode for you!
****SD: Youtube link of Chevy Chase with the delivery in case you need a pick-me-up.
Exchanges and Clearing
CME Group vs Intercontinental Exchange: Which Stock Allures?
Zacks via Nasdaq
The securities exchange industry is, of late, characterized by improving trading volumes. This in turn will help improve the clearing and transaction fees. The players in the industry have been witnessing expansion in their average daily volumes. Consolidations have been helping companies retain their market shares.
Regulation & Enforcement
Companies shouldn’t rush to adopt new hedge accounting standard
The Financial Accounting Standards Board released its long-awaited hedge accounting standard this week, but companies may want to be careful about adopting it early, or else they could miss out on some one-time benefits.
easyMarkets Hires Jimmy Pan as Head of Sales APAC
Naomi Barzel – Finance Magnates
CFDs, foreign exchange, and options trading brokerage easyMarkets has announced its hire of Jimmy Pan as its new Head of Sales in the Asia Pacific (APAC) region. Mr. Pan will be based out of Sydney, and will work side by side with easyMarkets’ local and international dealing teams in order to encourage an increase in both new accounts and revenue growth in the APAC area.
High-Probability Directional Options Strategies
Doug Ashburn – The Ticker Tape
Directional trades, like long calls or long puts, offer you the chance to profit if you’re right about the direction of the underlying stock. But, having profits that aren’t capped often comes at a price—not only does the stock need to move in the right direction, it has to move enough to overcome the premium paid for the option.
****SD: Dougie Fresh! The sensei taught this young grasshopper much.
One More Year “7” Warning
Jay Kaeppel – Investing.com
Just a short one. Under the category of “a picture is worth a thousand words” please refer to Figure 1 below. This chart is courtesy of The Leuthold Group and pretty much speaks for itself.
You Can Hedge Against Volatility With These 5 ETFs
Volatility levels are on the rise lately, given escalating North Korea tensions that have rattled global markets this month and Hurricane Harvey that has badly hit the energy sector.
Touted as one of the worst storms in history, the storm has caused large-scale flooding along the U.S. Gulf coast, affecting transport of people, food and will likely hurt economic growth if history is any guide. This is because U.S. economic growth dropped 50% in a quarter following Hurricane Katrina in 2005.
‘Tinderbox’: Why one strategist says a market flare-up is ahead
Alex Rosenberg – CNBC
High valuations, low volatility and poor seasonal trends point to serious trouble ahead for stocks, according to macro strategist Boris Schlossberg of BK Asset Management.
Though it has come off a bit from recent highs, the S&P 500’s forward price-earnings ratio continues to be at very elevated levels within a historical context. Investors are currently paying 17.4 times the earnings that are expected over the next year, according to FactSet data; that compares with an average of 14.1 times over the past 10 years.
WisdomTree: How to use ETPs to manage equity risk
Nizam Hamid, ETF Strategist, WisdomTree Europe – ETF Strategy
Equity markets, as represented by MSCI Europe and the Euro STOXX 50, have generally followed positive trends reaching multi-year highs in the middle of May this year. At the same time investors have been faced with a benign environment in terms of volatility. This has been the case for both realised volatility that has remained at low levels, and Euro STOXX 50 Implied Volatility that has only recently drifted higher on the back of rising geopolitical tensions. The European macro-economic backdrop for equities has remained positive with a renewed focus on stronger underlying growth, and limited political risk compared to the first part of 2017. However, as recent market events have shown there is every reason for investors to consider efficient tools to help manage overall portfolio risk.
Keeping client assets safe in an increasingly unsafe world
You’re in a darkened room — a shelter of some kind. Outside, you see mobs with torches; you hear air raid sirens. You turn on the television as an ashen-faced Jim Cramer is shouting “Sell! Sell! Sell!”
The screen goes blank.
Who hasn’t had a dream like that?
Protecting from downturns using options
Simon Ho – Cuffelinks
As the bull market in shares enters its ninth year (for the US at least), there is increasing need for investors to protect the value of their equity portfolio. Market valuations are near record highs, interest rates are starting to rise and geopolitical risks around the globe are causing concern.
One way to protect against market movements is options. Put options give the buyer the right but not the obligation to sell the underlying asset at the strike price, but there are some important factors to consider.
Goldman plots return to banking growth mode through hires, investments
Elzio Barreto – Reuters
Goldman Sachs Group Inc plans to add about half a dozen senior bankers over the next six months or so and invest more in Asia using its balance sheet as the Wall Street firm seeks to switch to a growth mode in investment banking, a top executive said.