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Deutsche Bank cuts ties with 3,400 clients in trading business; A Look Inside Wall Street’s Innovation Labs; OCC Names New CFO, Treasurer, and Chief Compliance Officer John Lothian Newsletter,Newsletter

First Read Derivatives luminary Donald Wilson at centre of courtroom battle; Famous derivatives trader has professorial air as he testifies in New York courtroom by: Gregory Meyer in New York – FT An ice storm, an email suggesting regime change and the mechanics of thinly traded futures markets have emerged as central points of contention in the market manipulation trial of one of the world’s biggest traders in financial derivatives. /goo.gl/iO6uWm ***** Why would you take a sizeable position in an illiquid market? Because you were getting a big edge. And if the other side was mis-pricing the instrument, then…

Sailing the Chaos of a Trump Rally; Why A Trump Presidency is Fed Positive; Stock market struggles to extend last week’s postelection rally Newsletter,Options

Observations & Insight A Basel netting issue: Pushing for less burdensome capital requirements in the options market Spencer Doar – JLN The unintended consequences of financial regulation have been seeping into the markets since the first rule was made in the wake of the financial crisis. One prime example is the leverage ratio, which determines the required capital of general clearing members. The actual calculation of the capital requirement within the Basel III leverage ratio framework is a particular sticking point for the OCC. Right now, the Current Exposure Method (CEM) is used in the calculation, whereas the OCC and…

What’s in a name? CME’s Kim Taylor Says Extra Cost Interview,Regulation,Video

Kim Taylor

Clearinghouses are now considered systemically important to financial markets. But with that designation are new regulations and capital requirements. John Lothian News sat down with Kim Taylor of CME Clearing to talk about how a new requirement could raise costs for market participants. Commodity Futures Trading Commission (CFTC) regulation 39-33, passed on November 15,  is a capital requirement that is set to be implemented by the end of the year. It calls for US-based clearinghouses to be designated as qualified central counterparties (QCCPs), which ultimately would give them more favorable capital requirements under Basel III but tough capital US guidelines….

KPMG’s Constance Hunter Says the Fed is True to Its Word on QE Interview,Managed Futures,Regulation,Video

Constance Hunter

When Constance Hunter looks at the Federal Reserve Bank and US economy, she sees some positive and negatives like all economists do. She also says the Fed didn’t fool  markets when it didn’t change its quantitative easing in September. Actually, she argues that the Fed was doing just what they said they would do. Hunter, who joined audit, tax and advisory firm KPMG as its chief economist, Alternative Investments in June, says that the markets misread Fed Chairman Ben Bernanke’s comments about tapering its quantitative easing program in September. In an interview with John Lothian News editor-in-chief Jim Kharouf, Hunter…

JLN Options: Time to Start Fearing the VIX, Again Newsletter,Options

Lead Stories Time to Start Fearing the VIX, Again Steven Russolillo – The Wall Street JournalThe market’s so-called fear gauge started showing signs of life this week, a development that historically doesn’t bode well for stocks.http://jlne.ws/16mJYly CBOE Holdings, Inc : Volume In CBOE’s S&P 500 Index Options Beats All-Time High Set In 2010Press Release (CBOE)The Chicago Board Options Exchange (CBOE) today reported that trading volume in S&P 500 Index options (SPXSM) contracts on Thursday, June 20 established a new daily record of 2,282,029 contracts traded.http://jlne.ws/130emFF New Daily Volume Record of 2,282,029 for SPX OptionsMatt Moran – CBOEA key factor impacting the…

JLN Options: ICE Throws Down Gauntlet on Payment for Order Flow Newsletter,Options

Commentary & Insight Jeremie Bacon on Taking the Reins at ORC Americas and Modular TechnologyMarketsWiki.tv After a decade of running his own technology firm, Jeremie Bacon decided it was time for a new challenge. In May, he took the reins as president of Orc Americas, the Chicago-based subsidiary of Orc Group. Bacon sat down with JLN editor-in-chief Jim Kharouf to talk about why decided to leave the firm he co-founded, Backstop Solutions, a software-as-a-service company in the alternative investment space. Bacon said he was impressed with ORC’s established footprint in the industry and reputation it has built since its launch…

JLN Options: Fed Would Like You to Stop Overreacting, Please: Volatility Fund Slumps Newsletter,Options

Commentary & Insight Compliance Advice on SEC’s Market Access Rule from Julie Dixon of Titan RegulationMarketsWiki.tv SEC Rule 15c3-5 (“Market Access Rule”), finalized in November 2010, is the commission’s response to the May 6, 2010 “flash crash” in which the U.S. equity market plunged nearly ten percent in a matter of minutes, then quickly rebounded. Compliance with the rule, which places risk management controls on any broker-dealer that offers direct trading access, has been required since November 2011, yet firms still have lingering questions about the adequacy of their self-policing programs. Julie Dixon, managing principal at Titan Regulation, discusses the…

JLN Options: Big Hedge Funds Suddenly Bullish Newsletter,Options

Lead Stories Big Hedge Funds Suddenly Bullish  Steven M. Sears, Barron’sA tectonic shift in the options market suggests that big money is now chasing the rally higher. Now bears get a discount.http://jlne.ws/12K47kL Equity options rebound in AprilFOWUS market growth has driven the most active April in US equity options history, indicating a possible upturn after a lack-lustre first quarter’s trading writes Jonathan Watkins.http://jlne.ws/14O5SNZ The VIX: It Could Get Ugly Soon  Adam Warner, Schaeffer’s Investment ResearchNow, there’s no law that says VIX has to move anywhere. Way back before anyone paid attention to VIX — like in the 90s — volatility didn’t fluctuate…

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.http://jlne.ws/12WkAST 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…