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Category Archives: Options

Options news updates from John Lothian News.

Havens Just Aren’t Safe Anymore, Goldman Says; Hedge Funds Bet on Volatility Standard

danger zone

Lead Stories Havens Just Aren’t Safe Anymore, Goldman Says Eric Lam – Bloomberg No traditional havens had positive beta to VIX lately: Goldman; Derivative hedges will become more important, strategists say Traditional safe havens haven’t been working out for investors in the latest ructions in financial markets, strategists at Goldman Sachs Inc. warned. /goo.gl/EBC7g4 ****JB: Business Insider here. Hedge Funds Bet on Volatility Gunjan Banerji – WSJ Hedge funds are betting that the recent turbulence in U.S. stocks will persist—a reversal after wagering for more than two years that the equity market will remain calm. Leveraged funds, a category that…

New Class Action Lawsuit Alleging Systemic Manipulation of Multi-Billion Dollar VIX Index Derivative Market Announced by Cohen Milstein Standard

class action

Lead Stories New Class Action Lawsuit Alleging Systemic Manipulation of Multi-Billion Dollar VIX Index Derivative Market Announced by Cohen Milstein Press Release As controversy surrounding the CBOE Volatility Index (“VIX Index”) continues to grow, a new federal class action lawsuit filed late Friday alleges widespread manipulation of the VIX futures and options market, resulting in hundreds of millions of dollars in losses for investors across the country. The litigation, filed on behalf of investors damaged by this manipulation, is the first lawsuit concerning this market manipulation to allege violations of the Commodity Exchange Act, which prohibits market participants from improperly…

Short vol losses a cautionary tale for using leverage; EU probes UK tax treatment of commodity derivatives; Bull market birthday Standard

Observations & Insight Miscellaneous Notes for March 9 Spencer Doar – JLN A chunk of the JLN crew will be down in Florida for FIA Boca from Monday through Friday. We have a ton of content lined up with all sorts of finance and technology luminaries – the next month is going to be a torrent of insight and perspective from all corners of the industry. If you are not around, the FIA will be broadcasting some of the key sessions with recordings available after the fact. Just go to FIA’s Boca page. Speaking of next week, our episodes of…

Takeaways From Recent Options Volume Surge; Update on Short Vol Poster Child; VIX seen as incomplete measure Standard

Observations & Insight An Array of Recommended Tangents for International Women’s Day Spencer Doar – JLN The “Fearless Girl” statue on Wall Street turned one year old today. Let’s dedicate today’s newsletter to the embodiment of her ideals, shall we? To kick it off, here’s the WaPo with The Fearless Girl statue turns one today. Here’s what she’s inspired. The “failing” NY Times (hah – NYT brought in $1 billion of subscription revenue in 2017) has an all-encompassing outlook – International Women’s Day 2018: Pride, Protests and Pressure. Women in Spain are on strike (link to BBC story). This human…

Dash Buyout; LJM-Wells Fargo lawsuit; Options-based funds study Standard

Observations & Insight Bits for Weekly VIX/SPX Expiration Day Spencer Doar – JLN The Onion had a good title for Gary Cohn’s resignation – Gary Cohn Resigns In Protest Of Trump’s Bigoted Comments Towards Aluminum. If you’re wondering when this trade war could kick off – who isn’t? – Axios is reporting that Trump wants to announce tariffs tomorrow and the White House said “this week.” Cboe released an update of its white paper on options-based funds. The 105 options-based funds focused on in the study have AUM of $38.1 billion. Some $8.5 billion of that total comes from the…

Vol products in the spotlight; Cboe’s pain; New VIX ETP Danger Standard

Lead Stories Wall Street’s volatility products in the spotlight; Market retains potential for upsets after February’s ‘Vix-mageddon’ Christian Pfrang and Robin Wigglesworth – Financial Times (SUBSCRIPTION) A month ago global markets were thrown into a tailspin, with US equities suffering one of their fastest 10 per cent corrections in history. The mayhem raised questions about a small but complex corner of markets where investors trade volatility itself. jlne.ws/2FZ4elX ****SD: I still like vol-cano over Vix-mageddon. Armageddon is a one-off affair while volcanos light up with frequency. One line from the article that I’d say requires a lot more stipulations is:…

February’s “volmageddon” good for banks, brutal for hedge funds Standard

armageddon

Observations & Insight Tangents of the day Spencer Doar – JLN The Wall Street Journal story Your Location Data Is Being Sold—Often Without Your Knowledge is an alt data industry story with tentacles reaching everywhere (we all use some apps right?). According to a cited research firm, 40 percent, or $16 billion, of all mobile ad spending was location targeted. Knowing where and when people are various places is big business and definitely tradeable information. It reminded me of a related recent story about the fitness app Strava that had a global heat map of activity. The problem? The heat…

Is Another $6 Trillion Stock Slump Coming? Wall Street Can’t Agree Standard

Observations & Insight February 2018 Options Exchange Marketshare vs Februrary 2017 Lead Stories Is Another $6 Trillion Stock Slump Coming? Wall Street Can’t Agree Bloomberg The swings are getting bigger in stocks, and the divide is getting wider among people whose job is to forecast them. Bank of America strategists led by Michael Hartnett say they see another correction coming, similar to the one in early February when about $6 trillion was erased globally. This year’s turbulence is part of a topping process in which everything from corporate profits to monetary stimulus is peaking, they say. jlne.ws/2t8Jd5L How rising volatility…

Don’t Buy the Hype: Heightened Volatility Is Not the New Normal Standard

Lead Stories Don’t Buy the Hype: Heightened Volatility Is Not the New Normal Dani Burger – Bloomberg Investors preparing for an era of higher volatility may want to take a pause: A sustained period of price swings isn’t in the cards quite yet. Changes in volatility measures may only be short-term reactions rather than a wholesale regime shift, offering a potential tonic to traders who have been on edge since inflation data punched up turbulence in late January. That handed global stocks their worst month since 2016, while U.S. 10-year yields marched to the highest in four years. jlne.ws/2GUtiKa An…