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John Lothian Newsletter: Chicago Stock Exchange Plans New Market, Open To Alliances; CBOE’s CEO Sees Compliance Review Continuing; ISDA warns against competing clearing houses John Lothian Newsletter,Newsletter

The Chicago Stock Exchange looks to open an electronic trading platform to increase business, and mentions its interest in strategic alliances. The CEO of CBOE says that as it continues to work with regulators, additional compliance-related reorganizations and changes are likely.  Lots of news from the ISDA conference (both in Lead and in the Regulatory News section); check the headlines inside for details.  Lots of exchange volume reports in the top and Exchange sections, and some of the news is quite good in places.  Also in the top box, JLN FX editor Jonathan Matte provides perspective on Iceland’s quest for…

John Lothian Newsletter: CBOE And DRW Teaming Up To Launch Swap-Like Futures; $1.6 billion in missing MF Global funds traced; CME, Finra Seek Closer Ties On Regulation John Lothian Newsletter,Newsletter

CBOE and DRW Trading are working on a futures product that works like an OTC swap, with the goal of providing swap dealers with an alternate way (and alternate regulations) for working with swaps. The MF Global trustee says that at this point, they pretty much know where the money went, but they’re not sure how much of it they can get back. If that’s not enough MF Global news for you, you’ll also find comments from Jill Sommers of the CFTC; an update on trading in bankuptcy debt payments; and Louis Freeh says just kidding, we’re not really going…

John Lothian Newsletter: SEC Options Cases Highlight CBOE Regulation; HKEx to offer renminbi futures; Tokyo Trading Glitch Thaws Resistance to Alternative Platforms John Lothian Newsletter,Newsletter

As the SEC takes additional action against broker OptionsXpress, the CBOE finds itself in the middle of a much closer look at how it supervises its members. The Hong Kong Exchange announces plans to issue futures contracts for trading the Chinese yuan. Fault and strategy analysis continues at the Tokyo Stock Exchange over a systematic failure earlier this year. In the top box, John Lothian pens a salute to the S&P 500 Index Futures contract, which turns 30 this year; and OCC and OIC upgrade their support of MarketsWiki to the Partner level.

John Lothian Newsletter: CBOE’s Inquiry Focuses On Traders; RBC to Defend Itself Against CFTC Suit Rather Than Settle; JPMorgan in Talks Over Missing MF Global Customer Money John Lothian Newsletter,Newsletter

The CBOE’s ongoing inquiry into trading wrongdoing is said to focus on several years’ worth of trader order entry. The Royal Bank of Canada, rather than quietly settle with the CFTC over charges of illegal trading, has decided to push back and defend itself. JPMorgan Chase is talking with the MF Global trustee about possibly giving back money that it’s holding. In today’s top box, a MarketsWiki interview with economist and writer Michael Green about the state of the gold market in 2012, and its status as an alternative currency.

John Lothian Newsletter: Bats CEO Scuttled IPO on Potential for Erratic Trading; Alliances offer solution for exchanges; E-Mail to Corzine Said Transfer Was Not Customer Money John Lothian Newsletter,Newsletter

BATS Exchange dominates the news today, with stories covering the Friday fault and subsequent IPO withdrawal, the letter from CEO Joe Ratterman, and analysis about the company’s next steps. As exchange mergers fail to complete, international alliances may be a better way to expand and solidify market share. An email to MF Global’s ex-CEO Jon Corzine regarding a late-October customer funds authorization, is now revealed to have told Corzine that the funds were NOT related to customer funds. The CBOE and ISE draw lawyers at ten paces and begin a battle over ISE’s Max SPY product, which CBOE says violates…

John Lothian Newsletter: Bats IPO Makes Exchange Built by Wall Street Public; CFTC rule sounds death knell for FIA-Isda trilateral give-ups; Volcker Says U.S. Needs Reforms in Finance, Government John Lothian Newsletter,Newsletter

BATS exchange issues its IPO today. Recent CFTC rules prevent dealers and clients from using a standardized clearing model proposed by the FIA and ISDA. Paul Volcker, in a speech yesterday, reiterated calls to reform financial and governmental systems. It was a sleepy news day, but the top box today is bursting with fresh content: commentary by Sarah Rudolph of JLN Options exploring the value of CBOE’s new VIX of VIX; a MarketsWiki.TV interview with Tom Callahan of NYSE Liffe US; an interview from HFT Review with Leo Melamed; and a sharp analysis of Dodd-Frank by Merton-Sholes via OpenMarkets.

Is a VIX of VIX Too Many Derivatives? Blog


Last week at the FIA conference in Boca Raton, the Chicago Board Options Exchange announced a new CBOE VIX of VIX Index (VVIX) that measures the volatility of the CBOE Volatility Index (the VIX index). The VIX index itself is a measure of the market’s expectation of future volatility implied by the prices of options on the S&P 500 stock index. Who are the likely users of the index? Anyone who trades volatility products or watches the VIX index, according to Catherine Shalen, director, research and product development, for CBOE. “It is a natural offshoot of the VIX; it uses…

Mark Esposito of OneChicago Discusses Their NoDivRisk (“1D”) Single Stock Futures Interview,Managed Futures,Video

Mark Esposito, a 25-year trading veteran on the floor of the Chicago Board Options Exchange (CBOE), is the managing director, business development at OneChicago. John Lothian News Editor-at-Large Doug Ashburn spoke with Esposito about OneChicago’s NoDivRisk (“1D”) Single Stock Futures products and how commodity trading advisors and managed futures funds can use them.

John Lothian Newsletter: CME Group, LCH.Clearnet offer new margining solutions; ASX Chairman Gonski to Step Down, Manage Australia SWF; SGX Adds Trading Hubs in London, Chicago John Lothian Newsletter,Newsletter

CME Group (on Tuesday) and LCH.Clearnet (on Wednesday) each debut new solutions to allow clients to margin their positions in a more cost-effective way. The chairman of the ASX quits his job to take on a new role of managing a big chunk of Australia’s sovereign wealth fund. SGX teams up with Eurex and NYSE Technologies to interconnect trading networks. In today’s super-heavyweight Boca edition of the JLN, you’ll also find stories about Walt Lukken as a plumber; analysis of the effects of MF Global on the futures industry; major new product and service offerings from CBOE, Trading Technologies, ISE…