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Tag Archives: Bart Chilton

FINRA looking at VIX; China curbing options trading; Exotic ETP concerns Newsletter,Options

Observations & Insight What’s the Deal With the VIX Manipulation Letter? Inaccuracy and Misunderstanding Spencer Doar – JLN The big options news pertains to a letter alleging VIX manipulation. The letter, written on behalf of an anonymous whistleblower by a Washington D.C. law firm, alleges market makers manipulate the VIX by quoting far out of the money SPX put options so they are included in the VIX calculation at junctures that benefit their trading activities. It’s understandable financial instruments are subject to concerns about manipulation when their inner workings are complicated and not fully understood by the general public. VIX…

John Lothian Newsletter: Nasdaq Suspends Currency-Trading Plans While Rivals Race Ahead; Betting big against the yuan? Beijing will crush you; Bowie Bonds: When the Man Who Sold the World sold asset-based securities John Lothian Newsletter,Newsletter

First Read Yesterday’s Top 3 The top read stories in yesterday’s JLN were: Chicagoans help subdue unruly passenger on detoured United flight which included industry veteran Bob Fitzsimmons; Upstart IEX exchanges blows with small investors over high-frequency trading and Hedge Fund Veterans Who Blew Themselves up Now Courting Chinese Investors In today’s issue, under the Exchange section, there is a nice analysis of CME’s 2015 volumes. Among the product sectors analyzed, energy showed the biggest jump in volume last year, up 20 percent year-over-year. This year is off to another wild start in energy, just as Derek Sammann pointed out…

John Lothian Newsletter: As Silence Falls on Chicago Trading Pits, a Working-Class Portal Also Closes; Speed Traders Team Up in Microwave-Tower Superhighway Plan; China’s Mass Affluent to Have Double U.S. Counterparts’ Assets by 2020 John Lothian Newsletter,Newsletter

First Read High Frequency Chatter Doug Ashburn – JLN The talking heads on TV love anniversaries. They are the easiest way to fill space in the 24-hour news cycle. In the debate over high-frequency trading, however, the network brass at CNBC and Fox Business could not wait a full year before starting the “Flash Boys: One Year Later” party. Yesterday, CNBC aired a segment with Michael Lewis, author of the book that brought HFT into the mainstream vernacular. In the segment, Lewis defended his liberal use of the term “rigged” when describing the stock market, and said the markets are…

Guest Commentary: Regulating Automated Trading, Not Just Chilton’s Cheetahs Commentary,Regulation

Zach Ziliak

Guest commentary by Zachary Ziliak. Zachary Ziliak runs Ziliak Law, LLC, a law firm that focuses on the needs of trading companies and the vendors that service them. Prior to law school, Ziliak worked in the financial sector as a trader and quantitative analyst. He then spent six years in Mayer Brown’s Litigation & Dispute Resolution practice, with a concentration in complex financial, mathematical, and computer-related concerns, before breaking off in May 2013 to found his own firm.[1] As such, he is particularly suited to comprehending the legal ramifications of algorithmic and high frequency trading regulation. Following is his summary…

John Lothian Newsletter: In Fight Over Bank Rules, Regulator Calls for Compromise; EU agrees breakthrough in market rules; FX Rates Said to Face Global Regulation in Libor Review John Lothian Newsletter,Newsletter

A CFTC commissioner wants the regulatory agency to reach out and compromise with overseas regulators on regulating foreign risk. In a probably unrelated turn of events, EU member states reached a milestone agreement on certain bank transactions and competition between clearing companies. As LIBOR’s fallout rolls onward and new allegations of currency rate manipulation surfaces, regulators around the world consider the idea that it might be good to regulate the way currency rates are set. In today’s First Read, take a look at another excellent interview: Julie Dixon, managing principal at Titan Regulation, discusses the origins of the Market…

John Lothian Newsletter: Chilton Seeks End-User Enforcement Delay for CFTC’s Swaps Rules; Bank of Japan Launches Easing Campaign; Flash crash explanation questioned John Lothian Newsletter,Newsletter

CFTC Commissioner Bart Chilton wants to hold off on punishing swap end-user errors until all the rules are complete and understood. After much shuffling and considering, the Bank of Japan unveils an aggressive new course of action to hopefully improve the nation’s economy. After almost three years, one of the few generally accepted causes for the flash crash comes into question in a new independent study.

John Lothian Newsletter: S Korea Plans Tax On Options And Futures; U.S. Banks Told To Make Plans For Preventing Collapse; Another Day, Another Trading Glitch: RBS Owns EUR/CHF Spike John Lothian Newsletter,Newsletter

South Korea is planning a transaction tax for futures and options activity, and not surprisingly some say that the move could harm exchange volume in that country.  Formerly-secret plans regarding the banking industry come to light, showing that the U.S. government wants strategies in place for how banks might manage their own demise, and that government help should not be assumed in a future crisis.  RBS shuffles to the front of the class and owns up to a fat-finger currency trade that created excessive algo activity and a big price spike.

A Speculator Does Not Bet Commentary,Regulation,Tech / HFT

John Lothian

As I was listening to one of the High Frequency Trading subcommittee reports at the Technology Advisory Committee Meeting  of the Commodity Futures Trading Commission a week ago, I took umbrage at some of the language being used to describe trading. Specifically, I mentioned that I abhor the use of the words “bet” or “betting” to describe what a speculator does.  My words startled one of the subcommittee members who was delivering the report. I said, there is a difference between betting and speculating.  I then gave my definition of each.  Betting is the creation of risk where there was…

John Lothian Newsletter: CFTC Won’t Delay Position Limits; Regulators inching forward on Dodd-Frank rules; Bring Back Boring Banks John Lothian Newsletter,Newsletter

The CFTC rejects the idea of further consideration on position limits, and moves forward with its rules.  With regard to Dodd-Frank, however, rule adoption continues at a snail’s pace.  Calls arise from economists and bloggers to return banks to an old and tested role:  that of a place where money is cultivated in a boring, slow and relatively-low-risk manner.  In the top box, JJLCO announces that GFI Group has joined as a JLN sponsor; and Leo Melamed takes aim at Bart Chilton’s cheetah.