Breaking News

US exchanges to face lawsuit over dealings with HFT; TCI fails in bid to oust London Stock Exchange chairman

First Read

Hits & Takes
JLN Staff

Hamilton’s Report on Manufactures: Hamilton reasoned that to secure American independence, the United States needed to have a sound policy of encouraging the growth of manufacturing and ensure its future as a permanent feature of the economic system of the nation. @Wikipedia~JJL

Beware – next time you’re surfing around the internet, you might be the victim of “cryptojacking”, websites that “hijack” your CPU to mine a particular cryptocurrency (though not bitcoin as that mining now requires specialized, higher power hardware). The folks at Merriam-Webster better be taking a lot of notes on all these new crypto words.~SD

The list for early access to free trading app Robinhood’s options offering is up past 350,000 people.~SD

Trading Technologies’ Blog put out Part 2 of its interview with Linda Raschke.~SD

Yesterday’s JLN Options featured lead stories regarding rising VIX bets and LCH’s clearing of credit options.~SD

CME London Employee volunteers this week built a Christmas Grotto with St Barts Charity Trust at Newham Hospital rainbow ward. Via LinkedIn~JJL

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Cash and Futures in Bitcoin Are a Different Story
By John J. Lothian

The high margins charged by the CME Group and Cboe for bitcoin futures, and the additional margins required by the futures commission merchants to trade the products, have turned the normal dynamics of futures trading versus cash trading upside down.

With the CME charging 47 percent margins, and some firms charging double margins on bitcoin futures, the cost of trading is nearly 100 percent of the underlying contract value. Normally futures contracts allow traders to control higher notionally valued contracts for much lower margin amounts.

Margins of 3 percent to 10 percent are the norm, depending on the commodity or instrument and volatility and other factors. For example, the initial margin for a speculator to trade corn at RJO is $605, as listed on their website. With the contract value for March corn at $3.74 per bushel as I write this for a 5000 bushel contract, the full contract cost is $18,700. That works out to be a little more than 3 percent for the margin for corn.

So, for 3 percent you can control a corn contract. With the same margins for corn as for bitcoin, you would need $8789 to trade a contract of corn at 47 percent margins or $17,578 to trade it at double the 47 percent margins.

For the rest of the commentary, go HERE

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Nikolai Larbalestier – Be the Change You Want to See

MarketsWikiEducation.com

“Take the opportunity. Take the risk. Understand the risk but go for it anyway. Failure is part of the journey, but success is the reward.”
In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Nikolai Larbalestier, AVP enterprise architect at Nasdaq, discusses three technologies that could potentially disrupt the market: distributed ledger technologies, artificial intelligence, and quantum computing. With the emergence of bitcoin and other cryptocurrencies, Larbalestier says the technology is there to insure that the exchanges “catch the wave” and are not overrun. The goal at Nasdaq is to use this technology to adapt to the ever-changing market place and stay one step ahead.

Watch the video here »

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Investors Commit $100 Million in First Day Funding to Overstock’s tZERO ICO
Brady Dale – Coindesk
The initial phase of a token sale for Overstock.com subsidiary tZERO has seen significant investor activity, according to CEO Patrick Byrne
As reported by CoinDesk, the first leg of the sale – in which the firm is selling Simple Agreements for Future Equity (SAFEs) that will later be redeemed for tokens by accredited investors – began yesterday, albeit a bit later than planned. Hiccups aside, Byrne told CoinDesk the sale ultimately attracted a big crowd – some 2,000 accredited investors.
jlne.ws/2D7kTSw

****SD: For more on tzero, check out Jim Kharouf’s piece earlier this year – Round One: How Overstock.com and tzero aim to knock out Wall Street

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China Unveils an Ambitious Plan to Curb Climate Change Emissions
The New York Times
China released plans on Tuesday to start a giant market to trade credits for the right to emit planet-warming greenhouse gases. The nationwide market would initially cover only China’s vast, state-dominated power generation sector, which produced almost half of the country’s emissions from the burning of fossil fuels last year.
/goo.gl/UH7cqD

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Highly motivated kids have a greater advantage in life than kids with a high IQ
Rebecca Haggerty – Quartz
Gavin Ovsak is one of those guys who never seems to slow down. On top of his classwork at Harvard medical school, he’s got a side hustle—writing an original software program to help doctors make better decisions.
/goo.gl/6N4t1s

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Advice to investors: stay in cryptocurrencies for the long haul; Building another financial system was always going to be risky
Peter Smith – FT
Less than a year ago, a single bitcoin, the most popular digital currency, could be purchased for less than $1,000. This month it touched almost $20,000 on some digital asset exchanges, and recently has been trading for about $15,000.
/goo.gl/6LqPcL

*****The writer is co-founder and chief executive of Blockchain.

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Tuesday’s Top Three
We must be a festive bunch. Our top viewed item yesterday was the RJO Holiday Video. Second was Cision’s piece, Maverick Trading Approves Bitcoin Trading for Firm’s Traders. Third went to The Wall Street Journal’s Bitcoin Futures Prices Fall in CME Debut

 

MarketsWiki Statistics Sponsored by Level Trading Field
  • 115,481,433 pages viewed
  • 22,943 pages
  • 210,898 edits
Level Trading

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Lead Stories

US exchanges to face lawsuit over dealings with HFT; Appeals court revives claims that high-speed traders were given unfair advantage
Nicole Bullock in New York – FT
The largest US exchanges will face claims that they cheated investors by favouring high-frequency traders, after a group of pension funds won a federal appeals court ruling on Tuesday.
/goo.gl/Kszqd1

TCI fails in bid to oust London Stock Exchange chairman
Huw Jones, Maiya Keidan – Reuters
A push by activist hedge fund TCI to oust the chairman of the London Stock Exchange (LSE.L) was heavily defeated on Tuesday, but that may not bring an end to the row.
jlne.ws/2oO6aZB

Bitcoin Futures Are a Great Way to Not Own Bitcoin; Also LongFin, EOS, Centra, P&G, Jim Simons and malevolent all-powerful super-intelligent capitalism.
Matt Levine – Bloomberg
Do you remember, like, two weeks ago, when people were talking about how the launch of bitcoin futures at Cboe Global Markets Inc. and CME Group Inc. would allow for efficient short-selling of bitcoin and finally deflate the bubble? Smart hedge-fund money was lining up to bet against bitcoin, the thinking went, but had no convenient way to do it on the actual bitcoin exchanges. The only people trading bitcoin were the true believers, so of course it kept going up, but once it was opened up to normal financial players that would end. “The futures reduce the frictions of going short more than they do of going long, so it’s probably net bearish,” said Craig Pirrong.
/goo.gl/azNoHu

Coinbase cryptocurrency exchange investigating staff over price surge
Nicholas Megaw – FT
One of the most popular exchanges for trading digital currencies is investigating its staff and contractors over a sudden surge in prices, its chief executive said on Wednesday.
/goo.gl/MsqTwc

Inside Wall Street’s Towers, Traders Grouse Over Trump Tax Plan
Laura J Keller , Ben Steverman , and Charles Stein – Bloomberg
Many are figuring out greater benefits will go to billionaires; One, sipping a Bloody Mary, vows to quit the Republican party
They thought they’d be celebrating. Wall Street traders who rake in hundreds of thousands of dollars a year or more eagerly awaited a Republican overhaul of the U.S. tax code. Now, many are huddling with accountants and concluding the real gains will go to billionaires and other captains of the industry. Those in trenches — the merely wealthy — are grousing.
/goo.gl/BPn7nN

U.S. Treasury Sales Are About to Double 2018. Who’s Buying?
Liz McCormick and Katherine Greifeld – Bloomberg
Onus may shift to price-sensitive investors like hedge funds; If central banks step back, that could mean higher yields
With the U.S. about to sell the most debt in eight years, Treasury Secretary Steven Mnuchin may find himself relying on a buyer base that needs to see higher yields before loading up.
jlne.ws/2D68RJ7

Forget stocks, it’s the bond market that could feel US tax cuts; If tax cuts are seen as stimulative for the economy, the effects on bonds could be significant
John Authers – FT
With the House of Representatives expected to pass a landmark US tax bill later on Wednesday, we can assume that the country’s headline corporate tax rate will fall to 21 per cent, along with measures that will have a significant impact on American corporate profits next year. What next?
/goo.gl/5kPd67

Wall Street bond traders fear zero-bonus ‘doughnut’; Slide in fixed-income sales and trading revenues takes toll on year-end rewards
Ben McLannahan in New York – FT
The dreaded doughnut — or zero bonus — could be back in a big way on Wall Street, particularly for bond traders who have struggled to make money in listless, lacklustre markets.
/goo.gl/gWEXGB

Problems at two cryptocurrency exchanges raise security concerns; South Korean bitcoin exchange Youbit files for bankruptcy after cyber attack
Emma Dunkley in Hong Kong – FT
Two cryptocurrency exchanges were hit by problems on Wednesday, with one forced into bankruptcy following a cyber attack, highlighting the growing regulatory and security concerns as such platforms become increasingly mainstream.
/goo.gl/5zaLxN

Bitcoin Cash Blasts Off; Some Cry ‘Insider Trading’; Coinbase halted trading of Bitcoin Cash four minutes after trading commenced
Bitcoin Cash prices had climbed 28% in the 24 hours preceding Coinbase’s initial Announcement
By Steven Russolillo and Gregor Stuart Hunter – WSJ
One of the world’s largest cryptocurrency platforms said it would investigate allegations of insider trading after the price of a bitcoin offshoot called Bitcoin Cash climbed in value before the platform began facilitating trades in the alternative currency.
/goo.gl/3v5bKE

Banks win last-minute reprieve on key part of Mifid rules
Hannah Murphy – FT
European markets authorities have granted banks and their clients an extra six months to comply with rules – due to come into force from January – that require them to have individual reference numbers in order to continue trading.
/goo.gl/Qzcvvc

The cryptocurrency market is now doing the same daily volume as the New York Stock Exchange
Oscar Williams-Grut – Business Insider
Global volume in cryptocurrency markets passes $50 billion, close to the average turnover on New York Stock Exchange; The comparison is inexact but highlights just how popular digital currencies have become.
Global cryptocurrency markets are now averaging the same daily trading volumes as the New York Stock Exchange.
/goo.gl/UKWXQV

It’s a Bright Future for FX Futures, Greenwich Says
John D’Antona – Traders News
There are significant economic benefits from switching from traditional OTC FX trading to FX futures, according to a new report from Greenwich Associates.
“Given the increased scrutiny that buy-side traders are placing on trading costs, along with regulatory schemes such as Basel III, which will likely drive execution costs higher, FX futures are a product that traders need to consider,” said David Stryker, Principal with Greenwich Associates Markets team, and author of the report.
jlne.ws/2D4wHoC

CFTC Revokes FBOT Registration Upon Request of CME Europe
CFTC
The Commodity Futures Trading Commission (CFTC) on December 15, 2017 issued an order revoking the foreign board of trade (FBOT) registration of CME Europe Limited (CMEEL). Such registration permits an FBOT to allow identified members or other participants located in the United States to enter trades directly into the trade matching system of the FBOT.
/goo.gl/mhd6Nt

UK financial watchdog hails shareholder vote for LSE chairman
Philip Stafford and Miles Johnson – FT
Sir Christopher Hohn is bloodied but unbowed by his bitter battle with Donald Brydon, chairman of the London Stock Exchange Group.
/goo.gl/TaV1sj

American Financial Exchange (AFX) Announces Two-Year Anniversary Highlights?Sixty-eight members and over $100 billion traded since inception
AFX
American Financial Exchange (AFX), an electronic interbank lending market focused on U.S. small and mid-sized banks, announced today the second anniversary of its electronic trading platform. AFX facilitates the determination of Ameribor®, a transaction-based interest rate benchmark for small- to mid-sized banks via its electronic trading platform.
(NO LINK)

Nadex Launches Bitcoin Spreads
NADEX
Nadex (North American Derivatives Exchange™) launched its new trading instrument, Nadex Bitcoin Spreads, at 8AM ET Monday, December 18, 2017.
/goo.gl/pWvs5T

Big Hedge Funds Want In on Bitcoin; Such investors are looking to profit either by buying bitcoin and other virtual currencies or by betting against them
Gregory Zuckerman – WSJ
Some of Wall Street’s largest players are gearing up for bitcoin. Until recently, big-name hedge funds paid little attention to the digital currency. But the rollout of futures trading and soaring prices have some large firms considering whether it is time to wade into the market.
/goo.gl/pxQ656

Good News! You Are a Bitcoin Millionaire. Bad News! You Forgot Your Password
Alison Sider and Stephanie Yang – WSJ
What’s worse than missing out on bitcoin’s 1,900% rally? Not being able to access your windfall because you forgot your bitcoin password. Many who bought bitcoin years ago now find themselves sitting on an untouchable bounty. Because they can’t remember the complex security codes needed to get to their bitcoins, the coins are in a kind of purgatory. It’s like forgetting a bank account password, but there’s no bank to call to reset it.
/goo.gl/DGBQL8

Exchanges, OTC and Clearing

London Stock Exchange shareholders back chairman in EGM vote; TCI motion to remove Donald Brydon gets only 20% support
Philip Stafford in London – FT
Shareholders in the London Stock Exchange Group have backed chairman Donald Brydon in its corporate governance battle, defeating efforts by activist investor The Children’s Investment Fund to remove him.
/goo.gl/GVcVjG

The problem with the LSE’s not very extraordinary general meeting; The Rolet saga has not only damaged the LSE’s reputation — the exchange has lost ground on its rivals as well
Paul Hodkinson – Financial News
After weeks of build up, a very public spat and no doubt some fierce lobbying of shareholders, the London Stock Exchange’s extraordinary general meeting today turned out to be not very extraordinary at all.
/goo.gl/dngAne

A Closer Look At CME’s Performance In 2017
Trefis via Nasdaq
CME Group has done reasonably well so far this year, with revenues growing nearly 3% in the first three quarters of 2017 while the stock price has increased by over 30% since the beginning of the year. This can be attributed to the company’s continued efforts in expanding its global footprint and its diverse product line to suit investor demand. The company has managed to grow its trading volumes by 5% year to date through November, driven by its diversified offerings. The decline in trading volumes across equities was more than offset by a surge in trading activity across interest rate, energy and metal derivatives. Consequently, the exchange saw an increase in clearing and transaction fees, which generates 85% of the company’s revenue.
jlne.ws/2D8WkVp

Coinbase now lets you buy and sell Bitcoin Cash
Fitz Tepper – TechCrunch
Coinbase has just added full support for Bitcoin Cash (BCH) – meaning you can now send, receive, buy and sell the cryptocurrency. All users will also be credited an amount of Bitcoin Cash equal to their Bitcoin balance during the hard fork that occurred August 1st, 2017.
/goo.gl/5nWyDC

Our employee trading policy at Coinbase
Go to the profile of Brian Armstrong
Brian Armstrong – Co-Founder and CEO
Today we announced support for Bitcoin Cash (BCH). It appears the price of Bitcoin Cash on other exchanges increased in the hours before our announcement. While digital currency prices fluctuate quite a lot and we have no indication of any wrongdoing at this time, I wanted to share a few thoughts with our customers:
/goo.gl/D9xVCC

Court Rules for Lawsuit Against Stock Exchanges to Proceed; Class-action suit alleges that Nasdaq, NYSE and others favor high-frequency trading over slow-moving investors
By Alexander Osipovich – WSJ
A federal appeals court said Tuesday that a lawsuit accusing stock exchanges of defrauding investors by favoring high-speed traders can go forward, in a blow to the New York Stock Exchange and Nasdaq Inc.
/goo.gl/24MuXX

Euronext announces its financial calendar for 2018
Euronext
Amsterdam, Brussels, Lisbon, London and Paris – 19 December 2017 – Euronext, the leading pan-European exchange in the Eurozone, today announced its financial calendar for 2018, set as follows:
/goo.gl/KKYL6E

FAQ on MiFID II/MiFIR: changes in minimum Block Trade sizes for Eurex products
Eurex
On 8 December 2017, Eurex Exchange published the revised minimum Block Trade sizes (MBTS) to ensure all Trade Entry Services (TES) trades qualify for pre-trade transparency waivers under MiFIR regu
/goo.gl/Zp2pH5

Monthly report: Clearstream looks back on a successful year in 2017
Deutsche Börse Group
Significant restructuring of the post-trade infrastructure has been made / Tessler: “Our focus for 2018 is to create added value for our customers with our services” / Rising volumes confirm positive business development
/goo.gl/oEjtBg

HKEX PUBLISHES 2017 MARKET STATISTICS
HKEX
2017 has been an active and vibrant year for Hong Kong’s securities and derivatives markets, according to market statistics from 1 January to 15 December 2017, published on Hong Kong Exchanges and Clearing Limited’s (HKEX) website today in response to media requests.
/goo.gl/vCfDsF

Reprimand issued against Bellevue Group AG
SIX
SIX Exchange Regulation reprimands Bellevue Group AG for several errors in its 2016 annual financial statements. Bellevue Group AG is sanctioned for the incorrect recognition of the foreign currency translation, the inadequate liquidity risk disclosures as well as the insufficient fair value disclosures with regard to a liability from a contingent consideration.
/goo.gl/YJufd1

NSE CEO Inducted as Associate Member of CIS
NSE
The Chief Executive Officer of The Nigerian Stock Exchange (NSE), Mr. Oscar N. Onyema, OON, was today, December 19, 2017, inducted as an associate member of the Chartered Institute of Stockbrokers (CIS) of Nigeria at the induction ceremony held at the Stock Exchange House, Lagos. With this, Mr. Onyema has become the first CEO of the Exchange to be inducted as an associate member after passing the requisite examination of the institute
/goo.gl/PH6AiX

Fintech

Trading Technologies files another case challenging patent ruling
financefeeds.com
The company challenges the PTAB decision on its ‘768 patent, titled, “Click Based Trading with Intuitive Grid Display of Market Depth”.
/goo.gl/s6vB5T

Equinix to buy Australia’s Metronode data center group for $791 million
Reuters Staff – Reuters
U.S. data center group Equinix Inc on Monday said it was buying Australian data center company Metronode from the Ontario Teachers’ Pension Plan in an all-cash deal worth A$1.035 billion ($791.15 million).
jlne.ws/2D48bnE

StockTwits just got even better with a new web experience and Discover feature
StockTwits Blog
Today, we’re excited to announce the launch of brand new redesigned StockTwits web experience and new Discover feature on web and iOS. This new release makes it easier for investors and traders to find, research, and keep up to date on their next big trade.
jlne.ws/2D61sKa

This Lightning Network Designer Is Re-Inventing Bitcoin Smart Contracts
Aaron van Wirdum – Bitcoin Magazine
Bitcoin is usually not considered the blockchain best suited for self-executing conditional payments, better known as smart contracts. While it does support basic programmability to enable features like time locks and multi-signature (multisig) schemes, competing projects like Ethereum, Ethereum Classic or Qtum are often expected to better support more advanced applications.
jlne.ws/2D9HIW0

Politics

Donald Trump’s nominee for Export-Import Bank is rejected
PBS NewsHour
A Senate panel has rejected President Donald Trump’s nominee to run the Export-Import Bank.
jlne.ws/2oLIYv9

Goldman’s Abby Cohen Says Trump Rally Isn’t Actually About Trump
Kate Smith – Bloomberg
Don’t tell Donald Trump, but the stock market’s record highs may have little to do with his presidency.
/goo.gl/VE8rJy

Maybe the Free World Doesn’t Need a Leader; Consensus-building might seem boring and weak, but it could yield better results.
Leonid Bershidsky – Bloomberg
Who is the leader of the free world? Important as the question sounds, I’m beginning to wonder if it’s better left unanswered.
/goo.gl/9suzQF

Regulation

US banks pass new post-crisis milestone; Regulators approve living wills designed to avert future bailouts
Alistair Gray in New York – FT
The biggest US banks got another boost from Washington on Tuesday when watchdogs gave them passing grades on a test designed to prevent the kind of meltdown triggered by the failure of Lehman Brothers.
/goo.gl/iW2rgt

Crypto Company shares suspended by regulators; SEC moved in after fervour for digital currency businesses sent stock soaring
Chloe Cornish in San Francisco – FT
US regulators have halted trading in shares of Crypto Company, a penny stock whose value surged more than 2,000 per cent this month thanks to the hype surrounding bitcoin, saying it was concerned over the possibility of market manipulation.
/goo.gl/csxfkd

Merrill Lynch Fined $1.4 Million Over Margin Credit, Other Violations; Finra says the brokerage improperly extended hundreds of millions in excess credit to customers
By Dave Michaels – WSJ
WASHINGTON—Merrill Lynch agreed to pay $1.4 million to settle claims that it improperly extended hundreds of millions of dollars in excess credit to customers who traded certain bonds and equities with the firm, Wall Street’s self-regulator said Tuesday.
/goo.gl/6JhcEA

CFTC’s Office of International Affairs to Host an International Regulators Meeting in Boca Raton Florida on March 13, 2018 – one day prior to the FIA International Futures Industry Conference
CFTC
/goo.gl/1BJ2aE

FINRA Fines Merrill Lynch $1.4 Million For Supervisory Deficiencies Related To Extended Settlement Transactions
Mondovisione
The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Merrill Lynch, Pierce, Fenner & Smith Incorporated $1.4 million for failing to establish a reasonable supervisory system and procedures to identify and evaluate extended settlement transactions, and for related rule violations.
jlne.ws/2D8lKlU

Pieces coming together
Christian Voigt – Fidesssa Blog
Derivatives market participants have been rightfully concerned about the potentially adverse impact of MiFID II on global trading. However, the US and EU authorities have taken significant steps in recent weeks to mitigate some of those concerns. The CFTC has issued an interpretative letter regarding the unbundling of research, something that is mandatory in the EU under MiFID II but partly restricted in the US. The SEC did the same a few weeks ago. Also, the CFTC and the European Commission (+Annex) recognised a number of SEFs, MTFs and OTFs as being equivalent, essentially allowing cross-border trading via those platforms to continue.
/goo.gl/9MwLfr

Thomson Reuters Announces Suite of E-learning Courses to Help Financial Industry Meet MiFID II Compliance Obligations ; Sell-Side, Buy-side, Market Structure, and International Reach courses now deliver MiFID II guidance
Thomson Reuters
Demonstrating its commitment to deliver a comprehensive suite of solutions to assist the financial services industry with ensuring ongoing compliance with impending MiFID II requirements, Thomson Reuters has expanded its e-learning capabilities with new compliance training courses designed to give organizations a clear, concise understanding of the regulatory framework mandated by the European Securities & Markets Authority (ESMA).
/goo.gl/vwAAab

ESMA Published CRA Market Share Calculation
ESMA
The European Securities and Markets Authority (ESMA) has published its annual market share calculation for EU registered credit rating agencies (CRAs).
/goo.gl/Y9cPyX

ESMA issues statement on LEI implementation under MiFID II
ESMA
The European Securities and Markets Authority (ESMA) has issued today a statement to support the smooth implementation of Legal Entity Identifiers (LEI) requirements under the Markets in Financial Instruments Regulation (MiFIR).
/goo.gl/rdyAed

FINRA Fines Merrill Lynch $1.4 Million for Supervisory Deficiencies Related to Extended Settlement Transactions
FINRA
The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Merrill Lynch, Pierce, Fenner & Smith Incorporated $1.4 million for failing to establish a reasonable supervisory system and procedures to identify and evaluate extended settlement transactions, and for related rule violations.
/goo.gl/rohsF8

Broker Charged With Giving Special Access to IPOs for Cash Kickbacks
SEC
The Securities and Exchange Commission today charged a Wall Street stockbroker with illegally accepting more than $1 million in undisclosed kickbacks for giving certain customers preferential access to lucrative IPOs, enabling them to reap major trading profits in the secondary markets.
/goo.gl/rWy2Sp

FCA response to ESMA’s public statement on LEIs
UK FCA
On 20 December, ESMA issued a public statement (link is external) to support the smooth introduction of the Legal Entity Identifier (LEI) requirements for MiFID II implementation.
/goo.gl/Yh4qaF

Investing and Trading

Hurricane-hit catastrophe bond managers plan new funds
Maiya Keidan, Carolyn Cohn – Reuters
Hedge funds and other managers of catastrophe bond funds racked up some of the worst losses in more than a decade from this year’s hurricanes and wildfires.
jlne.ws/2D5IS4H

After 7,500% Rally, Cryptocurrency Founder Sells All His Coins
Nour Al Ali – Bloomberg
The creator of the world’s fifth-biggest cryptocurrency cashed in his profits during a 75-fold rally this year.
/goo.gl/rYpv5r

Oil Prices in 2018: Once Again It’s All About U.S. Shale Output
Jessica Summers , Alex Longley , and Christopher Sell
December 19, 2017, 6:01 PM CST – Bloomberg
Brent to average $60, WTI seen at about $55 in 2018: survey; Shale growth seen as wild card where analysts’ outlooks differ
The direction of oil prices in 2018 will be decided in Texas.
/goo.gl/u7g2jk

Why investors should be weaned off tight tracking to market indices; Exploitative momentum investing would shrivel in the absence of benchmarkers
FT
Concern is mounting that world stock markets are once again overheating, reinforcing the belief that bubbles and crashes are an inescapable feature of capitalism. The standard explanations for these destructive episodes range from overblown visions of a fresh economic paradigm to aggressive monetary policies, but a new framework for understanding how asset pricing works points to an underlying and self-inflicted cause.
/goo.gl/m5KwxY

Optiver To Support Equiduct In Offering Retail And Institutional Brokers Best Execution For Thousands Of Equities And ETFs
Mondovisione
Optiver, a leading global market maker, has entered into an agreement with trading venue Equiduct, offering brokers a simple, one-stop-shop solution to achieve best execution for their European equity and ETF order flow. Under the agreement Optiver commits to provide continuous liquidity in thousands of European stocks and ETFs on Equiduct against the pan-European volume-weighted best bid and offer. Retail and institutional brokers that connect to Equiduct can thus benefit from trading fragmented European equities and a broad range of ETFs on one single venue.
/goo.gl/hCLZfN

Institutions

Bitcoin Futures at Advantage
Advantage Futures
High volume futures broker Advantage Futures continues onboarding new accounts to trade Bitcoin futures. Advantage offers clients both Cboe and CME Group Bitcoin futures.
/goo.gl/nHWKk6

Pockets of Active Achievement
Fei Mei Chan – S&P Dow Jones Indices
The last 16 years have not been kind to active management. But that shouldn’t come as a surprise. Unless the laws of basic arithmetic change, the theoretical argument on the perils of active management is ironclad. SPIVA data offer solid evidence to back up theory. As the chart below shows, most active managers underperform most of the time.
jlne.ws/2D5yR7z

Regions

Emerging Market Mindsets: Don’t Forget the Rest of the World
Steven Downey – CFA Institute Enterprising Investor
Most financial best practices originated in developed economies.
And while best practices and ethical principles endure regardless of locality, they can be challenging to implement in underdeveloped markets where the operational framework may be quite different.
jlne.ws/2D76CW8

China reveals plans for carbon market
Power Engineering International
China has announced some details of an emissions trading system that is expected to rank as the world’s largest despite having been scaled back from initial plans.
Although those plans had called for the inclusion of eight industries including metalworks, chemicals and paper, the announced scheme features just the power sector. Around 1700 energy companies will participate in the initial launch.
/goo.gl/puHLHM

Saudi Arabia to Freeze More Bank Accounts in Crackdown
Matthew Martin, Glen Carey and Archana Narayanan – Bloomberg
More people said to be questioned, some detainees released; Kingdom could recover as much as $100 billion in purge
Saudi Arabia’s crackdown on alleged corruption showed no signs of letting up, with more people being questioned and banks freezing more accounts, according to people familiar with the situation.
/goo.gl/UiPs8d

Putin’s Mr. OPEC Becomes an Oil Market Player; After the deal with OPEC, Russia’s energy minister is now as closely watched as his Saudi counterpart
By Jack Farchy and Evgenia Pismennaya – Bloomberg
Alexander Novak PHOTOGRAPHER: AARON M. SPRECHER/BLOOMBERG
When they meet, they often drive in the same car. When they make a visit together, they tweet the world smiling selfies.
/goo.gl/NWVN54

Saudis Say Aramco IPO ‘On Track’ as All Options Open for Listing
Yousef Gamal El-Din and Nayla Razzouk – Bloomberg
Aramco stock sale will be ‘IPO of the world’: finance minister; London and New York are among exchanges seeking to list shares
Saudi Aramco’s IPO is moving ahead and all options are open on where to list shares of the giant oil producer, the country’s finance minister said.
/goo.gl/E4xccr

CEO Says Beware of North Korean Hackers ‘Building a Cache of Bitcoin’
Sarah Gray – Fortune
Companies that deal in bitcoins and other digital currencies should be worried about being hacked by North Korea, which is “building a cache” of stolen crypto-loot, says one cybersecurity CEO.
/goo.gl/pWpw8q

Brexit

U.K.’s Brexit Transition Will End Dec. 31, 2020: Brexit Update
David Goodman and Alex Morales – Bloomberg
The U.K.’s Brexit transition will come to an end on Dec. 31, 2020, the European Commission said in a proposal for negotiating directives Wednesday. The announcement came as the International Monetary Fund unveiled its latest forecast for the U.K. and before Prime Minister Theresa May and Bank of England Governor Mark Carney speak in London later.
/goo.gl/CzZBCk

Britain Losing Its European Fruit Pickers Starts to Worry BOE
Lucy Meakin -Bloomberg
European workers are showing signs of turning away from the U.K. as an employment destination, according to a network of businesses across the country monitored by the Bank of England.
/goo.gl/ostioH

EU investment banks to keep ‘branch status’ post-Brexit; BoE plans to let banks apply for licences similar to those of US or Japanese rivals
Caroline Binham and Martin Arnold in London – FT
European investment banks will be allowed to retain their current status after Brexit under plans to be set out by the Bank of England on Wednesday.
/goo.gl/WbTYe6

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About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.