Breaking News

Category Archives: Options

Options news updates from John Lothian News.

CBOE Holdings’ Acquisition of Bats Global Markets Expected to Close February 28; Where Should The VIX Really Be?; Catalyst Capital Says Don’t Blame Us for Stock Market Swings Standard

Observations & Insight Odds & Ends Jim Kharouf, JLN A busy day around Chicago yesterday. FIA held its Washington update lunch, where FIA President and CEO Walt Lukken told the audience that the pendulum on regulation is shifting back. He is hopeful that the new administration will adopt its recommendations for: smart regulation, open access to global markets and a focus on innovation from regulators. How this all comes about is still to be determined. We will have more from Walt soon on all three topics. Later in the day, I checked out the new trading platform from tastytrade at…

Investors Look Past Headlines as Bull Market Roars Ahead; Wall Street’s Trading Revival Risks Relapse as Volatility Ebbs; Why the VIX Has Been Acting So Weird Standard

Observations & Insight Bits & Pieces By John J. Lothian We have added Johan Toll of Nasdaq to our March 1 Stockholm MarketsWiki Education World of Opportunity event. He will speak about blockchain. Unfortunately, Patrick Thornton-Smith of Duco had a conflict come up and will not be able to present. We hope to get PTS in the fall in London. John Damgard has agreed to speak at our July 21 event in Chicago. We are beginning work on lining up speakers for this summer’s series. Chicago is scheduled for July 17, 19 and 21. New York is set for July…

U.S. investors brace for mounting political risks as they decode Trump; Volatility Traders Shed VIX Positions as Markets Are Eerily Calm; The Volatility Limbo Standard

Lead Stories U.S. investors brace for mounting political risks as they decode Trump David Randall and Jennifer Ablan – Reuters Barry James built up his $4 billion mutual fund largely by studying balance sheets, earnings and market share. In the last few weeks, however, he has realized that he must look at a new force in the market: U.S. President Donald Trump. /goo.gl/iGS2KU ****SD: Out of everybody, I bet Nick Cage and Tom Hanks could figure out how to decipher the code of Trump. Volatility Traders Shed VIX Positions as Markets Are Eerily Calm Carolina Wilson – Bloomberg Assets in…

French political risk finally shows in equity markets; The Best Trump Trade No One Expected; January Options Volume Remains Anemic Although Market Quality Improves Standard

Lead Stories French political risk finally shows in equity markets Kit Rees – Reuters A spike in expectations of European equity market volatility around the first round of France’s presidential election suggests investors are belatedly starting to worry about the outcome and potential price swings. reut.rs/2kGHYSs ****SD: Bloomberg – Hedging Costs for French Stocks at 5-Year High to Europe: Chart. The election is April 23. The Best Trump Trade No One Expected Sumit Roy – ETF.com What’s the best-performing trade since Donald Trump was elected president? Even today, with the benefit of hindsight, a lot of people might not know….

Le Pen Tail Risk Puts Traders on Alert as Volatility Creeps Up; Traders Seek $100-Million-Plus Bonanza From Bund Bets on Le Pen; What the Vix Is Really Telling the Markets Now Standard

Lead Stories Le Pen Tail Risk Puts Traders on Alert as Volatility Creeps Up Tanvir Sandhu, Vassilis Karamanis and Simon Ballard – Bloomberg Investors are just about waking up to the risk of Marine Le Pen emerging victorious in the French election, some early bets in the options market show. While a Le Pen win is still seen as a tail risk and the first round of the election is still more than two months away, the unexpected outcomes of last year’s votes in the U.K. and the U.S. have raised investor awareness of political risk. The National Front candidate’s…

Hedging demand perks up even as volatility craters; Derivatives market is short of a $3.7tn lifeboat; Trapped China Cash Breathes Life Into Hong Kong Yuan Banking Standard

Lead Stories Hedging demand perks up even as volatility craters Saqib Iqbal Ahmed – Reuters Soaring U.S. share prices and plunging market volatility measures may paint a picture of optimism, but there are signs in the equity options market that investors have started to question how long this goldilocks period can last. jlne.ws/2lvZDxd Derivatives market is short of a $3.7tn lifeboat John Dizard – Financial Times For institutions that use derivatives, collateral put up by their counterparties provides the same reassurance lifeboats do on a ship. Unfortunately, for all the post-crisis reforms, it would appear that we are a couple…

JLN Options: The worrisome and not-so worrisome Standard

Lead Stories Banks, brokers face post-Brexit mis-selling claims over FX options Lawrence White and John Geddie – Reuters Banks and foreign exchange brokers in Britain face legal claims from small companies which allege they were mis-sold complex currency derivatives that soured when the pound fell after Britain’s vote to leave the European Union, according to court filings and sources familiar with the cases. jlne.ws/2lvEinE ****SD: Obviously these companies ought to act responsibly in their selling practices, but I can’t help but wonder why people get roped into things that they don’t understand. Are the sales pitches that stellar? I see…

Low VIX Masks Insurance Markup Options Traders Are Paying; 42% Rise for the SMLC Sentiment-Based Index That Analyzes Twitter Traffic; Finding Volatility in the US Markets Standard

Lead Stories Low VIX Masks Insurance Markup Options Traders Are Paying Cecile Vennucci – Bloomberg Here’s another sign that beneath the surface of placid stock markets, investors aren’t exactly sound asleep. It’s the persistently high premium traders are paying for equity options, visible in the difference between implied and realized volatility in the S&P 500 Index. The gap, definable as the intangible cost of stock insurance over and above what is accounted for by the market’s swings, has now lingered for 51 trading days. jlne.ws/2lr71d6 ****SD: Volatility = rough play right now. Semi-related retail investor story below about the use…

In Shadow of Le Pen and Brexit, Traders Redraw European Strategy; How Wall Street gauges fear in a time of Trump; Global derivatives industry calls for phase-in of new rule Standard

Observations & Insight Arrival (not with Amy Adams, Jeremy Renner and Forest Whitaker) Notice anything? MIAX Pearl opened up yesterday, bringing the grand total of U.S. options exchanges to 15. When MIAX announced its plans for Pearl, Jim Kharouf wrote a story about the exchange’s planned structure and a bit about MIAX’s background. It’s worth a revisit (though you will undoubtedly notice that Pearl did not in fact open in Q4 2016, as was initially planned). But seriously, the movie Arrival is solid — two thumbs up. +++++ MIAX PEARL Successfully Launches Trading Operations PR Newswire MIAX PEARL, the newest…