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Category Archives: Options

Options news updates from John Lothian News.

It’s time to brace for ‘market turmoil’, warns JPMorgan; Goldman Sachs’ pre-earnings options theory; BofA: “Central Banks Are Now In A Desperate Dilemma”…”Start Buying Volatility” Standard

Observations & Insight Making the Johannesburg Stock Exchange a Global Player JohnLothianNews.com “The JSE, for eight years in a row now, was rated number one, two or three in the world by the World Economic Forum for the quality of financial market regulation.” The Johannesburg Stock Exchange is in the process of adjusting much of its infrastructure. It already transitioned from T+5 settlement to T+3 settlement (with no failed trades thus far); the derivatives trading technology is being replatformed; Cinnober is supplying a new clearing system that will be live at the start of 2018; and London Stock Exchange Group’s…

Traders test OPEC ‘whatever it takes’ resolve to defend oil price; The VIX is not a Fortune-Teller; ‘Vol’-Apalooza: A Handy Reference Guide To Low Volatility Regimes Standard

Observations & Insight Are You Registered? If you haven’t registered for our Trading Chicago event, a joint effort between John Lothian News and FOW, now is the time. The one-day event is set for June 28th at the Swissotel in Chicago. You can register HERE and see the agenda for the conference. The program is packed with great topics and speakers. We’ll be leading off with a keynote from Craig Pirrong from the University of Houston and a debate over Dodd-Frank between Leslie Sutphen and Gary DeWaal. Other panels cover trading derivatives in the age of populism, trading fixed income,…

Academics Clash Over VIX Bragging Rights; ’50 Cent’ Just Reloaded With a Big Hedge Against a Stock Selloff; CFTC commissioner to depart amid ‘intolerable’ situation Standard

Observations & Insight Bits & Pieces By John J. Lothian CFTC Commissioner Sharon Bowen has had enough. Or more accurately, she can do the math and her best move is to step aside and let the Washington political process proceed. Congress likes to send up paired nominees for confirmation to the CFTC, but we need two Republicans and one Democrat confirmed to get to the full five-member CFTC. By stepping down, Bowen sets up the ability of Congress to send up a pair of Democrats to go with the pair of Republicans. Hats off to Bowen for her work on…

Vela to Expand Trading Technology Capabilities with OptionsCity Acquisition; Bond Traders Double Down on 2017 Fed Bets Via Options Hedges; Gaming the Yuan – Making Money on a State-Controlled Currency Standard

Observations & Insight LSE Working On More Italian Derivatives Growth JohnLothianNews.com “We are also working and in close contact with the clearinghouse, because one of the key elements in developing derivatives markets now and probably in the time to come is post-trade efficiency.” The LSE bought Borsa Italiana in 2007. Nicolas Bertrand, the LSE’s head of derivatives, says in the past three years the exchange saw double digit volume growth with increasing support from international participants in the FTSE MIB futures complex. In Q3 2017, Borsa Italiana will extend its trading hours with the goal of capturing even more international…

Market Volatility Has Vanished Around the World; How S&P 500 options may be used to manipulate VIX ‘fear gauge’; MIZUHO: ‘The market appears at risk for an unexpected event’ Standard

Observations & Insight For The Trader Among Us: Trading Chicago If you haven’t registered for the Trading Chicago event on June 29 at the Swissotel in the Windy City, now is the time to do it. We’ve got a great lineup of panels and speakers with a strong emphasis on the impact of regulation, technology and key markets on end-users such as CTAs, hedge funds, proprietary trading firms and asset managers. For full conference information, click HERE. ++++++ LME Working To Get Exchange Structure Right JohnLothianNews.com “I think we have to be honest that no market structure is going to…

Flashback – New York Stock Exchange Roils Options World; Options Are Effective Means to Increase Alpha; A Signal from the Options Market – Oil’s Rout Isn’t Over Standard

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Lead Stories FLASHBACK FRIDAY – New York Stock Exchange Roils Options World Mark Longo – Traders Magazine It was a time of acquisition mania in the options mart back in 2005 as the NYSE has just purchased rival Arca Ex, which in turn had itself just acquired the Pacific Coast Exchange. The grab for market share in these equity derivatives was the key to profitability, the thinking went. But what about competition and the NYSE having an unfair advantage? Compared to today’s trend of increased fragmentation in options, the idea of monopoly or oligopoly seems ludicrous. /goo.gl/sZ3V4k ****SD: Good context….

Listen Luddites, This Market Action Is About the Machines; Fed raises rates, unveils balance sheet cuts in sign of confidence; Deutsche unifies capital markets businesses Standard

Observations & Insight Eurex CEO Sees Plenty of Structural Growth Potential JohnLothianNews.com “We also see a lot of structural growth potential… If we look at the equity index complex, there is a clear trend of many asset managers moving to passive investment structures. We see that … on the derivatives side [adding] new liquidity pools to global index families.” Thomas Book, CEO of Eurex Frankfurt AG and Eurex Zurich AG, believes the exchange can take advantage of the opportunities presented by a changing European landscape. Low interest rates for a long time equated to low interest in Eurex’s fixed income…

HFT – Not so flashy anymore; Vicious VIX; JPM Head Quant Warns Of “Catastrophic Losses” For Short Vol Strategies Standard

Observations & Insight An Excerpt of Note Spencer Doar – JLN I am re-reading “Liar’s Poker” because…I don’t really know why — maybe it’s just summer instinct with all these reading lists floating around. Anyway, about a quarter of the way in, there’s a notable anecdote from Michael Lewis’ training program at Salomon: “‘When you trade equity options,’ asked my friend Franky, ‘do you hedge your gamma and theta or just your delta? And if you don’t hedge your gamma and theta, why not?’ The equity options specialist nodded for about ten seconds. I’m not sure he even understood the…

US Options Volume Defies Moribund Volatility; Market fear indicator shows historic difference between Nasdaq 100 and S&P 500; U.S. shale firms more exposed to falling oil prices as hedges expire Standard

Observations & Insight Line-up for MarketsWiki Education Series in NY and Chicago By John J. Lothian We have set the line-ups of speakers for the MarketsWiki Education series in New York and Chicago. Here is the list of the speakers and the days they will be presenting. On July 11 at Nasdaq’s Marketsite location we will have Gary Barnett (SEC), Larry Tabb (Tabb Group), Jennifer Nayar (Vela Trading Technologies), Thomas Ascher (formerly ISE), and Morgan Slade (Cloud Quant). On July 11 at the second session at Nasdaq, we have Gregg Doud (Commodity Markets Council), Henry Schwartz (Trade Alert), Joe Gits…