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Options Market Says Buy the Dip; Issues With Volatility Short-Selling Guru Newsletter,Options

Lead Stories Options Market to Investors: Buy the Dip; Options traders aren’t pricing in a correction during September and October, even as worries abound. Steve Sears – Barron’s The options market is sending a message to stock investors: Keep calm and buy the dip. Despite the recent turbulence in the market, Standard & Poor’s 500 index options, which are used to hedge stock portfolios, are priced as if investors have little to worry about over the next two months. This stands in sharp contrast to the recent eruption of market commentary that warns stocks could severely tumble for any number…

Bond Trader’s $10 Million Volatility Bet Is Paying Off; ECB wary of putting end-date on quantitative easing; Low volatility blamed for poor investment bank results Newsletter,Options

Observations & Insight On The Move: Vela Makes its second fintech acquisition in the last two months, acquiring Object Trading in addition to the OptionsCity deal that closed in June. Sarah Rudolph – John Lothian News Vela Trading Technologies has been on an acquisition binge since rebranding from its former incarnations as SR Labs and Wombat Financial Software – at least, if you can call two a binge. Less than a month after buying OptionsCity, the fintech company that provided electronic options and futures trading, Vela has announced it will acquire Object Trading, a global direct market access provider located…

Frankfurt Emerges as Biggest Banking Winner After Brexit; State Street Exits Its Dark Pool, Selling BlockCross to Instinet; U.K.’s Euro Clearing Business at Risk as ECB Requests More Powers John Lothian Newsletter,Newsletter

First Read Making the Johannesburg Stock Exchange a Global Player JohnLothianNews.com “The JSE, for eight years in a row now, was rated number one, two or three in the world by the World Economic Forum for the quality of financial market regulation.” The Johannesburg Stock Exchange is in the process of adjusting much of its infrastructure. It already transitioned from T+5 settlement to T+3 settlement (with no failed trades thus far); the derivatives trading technology is being replatformed; Cinnober is supplying a new clearing system that will be live at the start of 2018; and London Stock Exchange Group’s MTS…

Vela to Expand Trading Technology Capabilities with OptionsCity Acquisition; Bond Traders Double Down on 2017 Fed Bets Via Options Hedges; Gaming the Yuan – Making Money on a State-Controlled Currency Newsletter,Options

Observations & Insight LSE Working On More Italian Derivatives Growth JohnLothianNews.com “We are also working and in close contact with the clearinghouse, because one of the key elements in developing derivatives markets now and probably in the time to come is post-trade efficiency.” The LSE bought Borsa Italiana in 2007. Nicolas Bertrand, the LSE’s head of derivatives, says in the past three years the exchange saw double digit volume growth with increasing support from international participants in the FTSE MIB futures complex. In Q3 2017, Borsa Italiana will extend its trading hours with the goal of capturing even more international…

How China’s Biggest Bank Became Wall Street’s Go-To Shadow Lender; JPMorgan Has a Surprisingly Simple Theory for Low Volatility; The ECB and tapering: a challenge that will not go away John Lothian Newsletter,Newsletter

First Read Ready for Trading Chicago? JLN We’re six days into June, which means there are only 22 days left until the FOW-JLN conference Trading Chicago on June 28th. It’ll be well worth it to attend. Just check out the program: speakers this year include the Streetwise Professor Craig Pirrong, Leslie Sutphen and Gary DeWaal debating Dodd-Frank, Fidessa’s Steve Grob, Chris Hehmeyer and Joshua Yang talking about our markets in an age of populism with Carl Gilmore. Other notables include Jay Feuerstein of Budo Group, Richard Mackey of Rosenthal Global Securities and Tim Gits of Eurex and Chris Anderson of…

Implementation of SA-CCR Important For Liquid and Orderly Listed Options Markets; Seventeen years after 5,000, Nasdaq tops 6,000; What Markets Should Conclude From France’s Election Newsletter,Options

Observations & Insight Other VIXes Spencer Doar – JLN Of all the CBOE’s products, none gets media attention like the VIX. But CBOE has plenty of other VIX products, ranging from the BPVIX (CBOE/CME FX British Pound Volatility Index) to the GVZ (CBOE Gold ETF Volatility Index). The VIX plummeted yesterday to the 10 handle after the results of the first round of the French election were interpreted as positive (VIX is around 10.6 as of this writing). The media will sometimes give markets the gloss over treatment, look at the VIX and only the VIX, and declare “where’s the…

Interactive Brokers Group Announces Decision to Cease Options Market Making Activities; Snap options set for strong demand on market debut; Newsletter,Options

Observations & Insight CME Group CEO Terry Duffy on Business and Interest Rates Under the Trump Administration JohnLothianNews.com With a new administration in place and a more optimistic outlook from the market community, CME Group is well positioned to succeed, according to CEO Terry Duffy. Whereas global regulatory efforts have served as a headwind for the industry since the financial crisis, now the United States is benefiting from the perception that the new administration’s stance on regulation will serve as an tailwind. There is much left to be determined, certainly, but even the shift to no new regulation as opposed…

Chinese billionaire with ambitions to reshape investment models; Law Firms’ Accounts Pose Money-Laundering Risk; U.S. mutual fund trustees feel the heat of investor lawsuits John Lothian Newsletter,Newsletter

First Read Holiday Bits By John J. Lothian The John Lothian News team is scattered to the four winds post-holidays as we work from home or take this slow time before New Year’s to get some quality family time away. Construction on our offices continues and we hope to be back in the offices on January 9. We will be publishing JLN this week, but JLN Options will remain on the sidelines for the rest of the year. MarketsWiki will end the 2016 year with about 91.5 million page views since it was launched. Sometime in early 2017 we expect…

CBOE purchase of Bats reflects aim to tap options trading for ETFs; US Options Volume Surges Nearly 25% in November, Reaching Second Highest Monthly Volume in 2016; Wall Street’s ‘fear gauge’ implies that few are prepped for a stock-market shock Newsletter,Options

Lead Stories CBOE purchase of Bats reflects aim to tap options trading for ETFs Philip Stafford – Financial Times CBOE Holdings’ planned $3.2bn purchase of Bats Global Markets reflects a crucial step in tapping the next major area of growth across exchange traded products. The booming sector is set to expand further with the use of options. In an interview with the Financial Times, Ed Tilly, chief executive of CBOE, laid out a comprehensive case for why the new entity is best placed to take advantage of rapidly shifting demand from investors for structured products. Mr Tilly, who will head…