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Tag Archives: CBOE

JLN Options: Fear Gauge Sees Stock Volatility Abating Even Further Newsletter,Options

Lead Stories Fear Gauge Sees Stock Volatility Abating Even Further  Kaitlyn Kiernan, The Wall Street JournalThe spread between reality and expectations is widening.Lately, actual volatility in the Standard & Poor’s 500-stock index has been higher than the volatility implied by readings on the Chicago Board Options Exchange’s Volatility Index. The gap between the two metrics is the largest positive divergence between the two readings since December 2011. Bobcat Goldthwait Demonstrates VolatilityRussell Rhoads, CBOEThe industry standard for measuring market volatility is the CBOE Volatility Index better known as VIX.  One of the behaviors of VIX is that it tends to revert to…

JLN Options: CBOE expects to be fined by SEC for regulatory shortcomings Newsletter,Options

Lead Stories CBOE expects to be fined by SEC for regulatory shortcomingsAnn Saphir, ReutersCBOE Holdings Inc expects to be fined as much as $10 million to resolve a probe by federal authorities into its duties as a self-policing organization. Option Player’s ‘Iron Condor’ Sees Range-Bound Dow Fund  Kaitlyn Kiernan, The Wall Street JournalAs the Dow looks set to finish above 15000 for the first time, one options trader set up an “iron condor” to bet the blue-chip index would remain range bound over the next seven weeks. Dow Climbs Above 15,000 on Stimulus Optimism, EarningsInyoung Hwang, BloombergU.S. stocks rose, sending the…

John Lothian Newsletter: CBOE defers start of extended trading day after recent outages; EU rules risk driving London Metal Exchange to Hong Kong; LSE on target to win Italian bond platform EuroTLX John Lothian Newsletter,Newsletter

In the wake of two technical faults in two weeks, exchange CBOE decides to hold off a bit on its plans to extend its trading day. Customers at the London Metal Exchange make dark suggestions that if the EU insists on pursuing aggressive regulatory reform, the LME’s business might very well head to Hong Kong instead. The London Stock Exchange is on track with its future acquisition of the Italian retail bond platform EuroTLX.

JLN Options: High-Frequency Trading Is ‘Basically Evil’: Munger Newsletter,Options

Lead Stories High-Frequency Trading Is ‘Basically Evil’: MungerPaul Toscano, CNBC (via Yahoo Finance)Events in Europe are a great example of bankers gone wild and you simply can’t trust them, said Warren Buffett’s right-hand man Charlie Munger.**Munger goes after more here than just HFT.  As regards HFT John Lothian News recently interviewed Raj Mahajan, Allston Trading CEO, who has a different take on HFT than Munger does. Go here to watch the video (not taking sides here, merely offering a counterpoint). –JB CBOE outage won’t limit listing of stock-index options: new CEOAnn Saphir, ReutersThe Chicago Board Options Exchange outage that blocked…

John Lothian Newsletter: CME Favored in U.S. Swaps-Data Plan, Competitor Suit Says; Tech Issue Delays Options Trading at CBOE; Hedge funds find salvation in Japan’s Abenomics John Lothian Newsletter,Newsletter

Clearing company DTCC files a lawsuit, taking aim at regulator CFTC for creating a rules it says inappropriately favors competitor CME Group. Exchange CBOE suffers its second (though this time more limited) operational fault in a week. Hedge funds, struggling to find a decent place to sit and be profitable for a while, look to Japan for the first time in a while as economic policy shifts there make the country more intriguing.

JLN Options: Investors Spooked Ahead of Big Data Days Look to Put Options Newsletter,Options

Lead Stories Investors Spooked Ahead of Big Data Days Look to Put Options Kaitlyn Kiernan, The Wall Street JournalWith key U.S. employment data looming Friday, a pair of central bank policy meetings this week and major stock benchmarks at record highs, options traders are getting defensive.Options traders are zeroing in on short-term contracts that protect against declines in the SPDR S&P 500 exchange-traded fund and the iShares Russell 2000 Index Fund. CFTC Commissioner Proposes Derivatives Transaction Fee  Jamila Trindle, The Wall Street JournalCommodity Futures Trading Commission member Bart Chilton plans Wednesday to propose a transaction fee for derivatives markets, an idea that…

JLN Options: Options Markets are Being Overly Sensitive Newsletter,Options

Lead Stories Options Markets are Being Overly SensitiveJared Woodard, Condor OptionsOne of the most important market signals over the last five years has been the slope of the VIX futures term structure. In quiet, bullish markets, short term option premiums are significantly lower than longer-dated implied volatility; when risk scenarios roil markets, the term structure flattens and then steepens in the other direction. Derivatives Help Mask Equities Pain at NYSE Euronext  Tim Cave, The Wall Street JournalJeff Sprecher, ICE chief executive, has obviously done his homework.When he made his bid for NYSE Euronext NYX +0.14% in December, he said the Liffe…

John Lothian Newsletter: OTC trading reform threatens Asian markets; Deutsche Börse hit by earnings slowdown; CBOE Says ‘Fully Confident’ Software Bug Resolved John Lothian Newsletter,Newsletter

Asian financial markets struggle with the need to keep up with Western regulation, and the risks that regulation could pose to future growth. Exchange Deutsche Börse reveals tough conditions in its latest quarterly results. And the CBOE says that their software defects leading to last week’s trading suspensions are now fully understood and mitigated.

JLN Options: CBOE Working to Resolve Incorrectly Sent Trades – Exchange Newsletter,Options

Lead Stories CBOE Working to Resolve Incorrectly Sent Trades – Exchange Jacob Bunge, The Wall Street JournalThe Chicago Board Options Exchange said “numerous” trades from Thursday appeared in its system after Friday’s market close, potentially leaving customers with incorrect positions. About that Friday Turnaround in the Price of GoldBrendan Conway, Barron’sGold’s price is rising Monday and has reached as high as $1,478, a peak since April 12.Friday, the metal’s price took a turn lower for no obvious fundamental reason. Here’s more color on the midsession turnabout from Susquehanna Financial Group – specifically on the alleged role of options-market activity: Twitter…