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Tag Archives: hedging

It’s WAR! Newsletter,Options

Observations & Insight TGI (Tariff) Friday SD – JLN Round 1 of the official tariff tiff began last night. How are you feeling? While foot traffic has diminished in downtown Chicago this week as vacations take their toll on active headcount and the usual “summer quiet” stories making the rounds, I don’t feel lulled (other than the dearth of options specific news). The “lack of lull” feeling isn’t totally out of place. Daily notional turnover on U.S. NMS exchanges in June was $350.1 billion compared with a summer norm of <$300 billion. (July has been slower thus far.) “China this,…

Two Studies on Options Use – Institutional Users and European Demand Feature,Mwiki,Video,video

Over the past two months, two studies commissioned by the Options Industry Council were released. The  studies about the varying uses of options by different market participants were conducted Greenwich Associates and Burton-Taylor International Consulting, respectively.   The first study, conducted by Greenwich, looked at how institutional users of exchange-listed options view the product. In the below video filmed at the Options Industry Conference in Amelia Island, OIC’s Joe Cusick and Greenwich’s Richard Johnson go over some of the key findings of the study.   The second study, conducted by Burton-Taylor, found that some 9 percent of U.S. options order flow comes…

Shortwave trading; Robinhood’s $2b a day options biz; Mammoth bond wager Newsletter,Options

Observations & Insight A little-known business at Robinhood has exploded, and now it’s launching a service to go after the most serious traders Frank Chaparro – Business Insider Prime (SUBSCRIPTION) Robinhood’s options-trading business is exploding, according to Chris O’Neil, a product manager at the California broker. Now the firm, which says it has seen $2 billion in options-trading volumes since launch, is upping the ante with the rollout of multileg options. The move shows the company is seriously going after the business of more experienced traders, says Devin Ryan, an analyst at JMP Securities /goo.gl/C2CX83 ****SD: First of all, not…

A Decade on From the GFC – John Davidson, OCC; Cleverness vs. Manipulation? Newsletter,Options

Observations & Insight Miscellany of the day Spencer Doar – JLN According to the most recent post on the Bank of England’s Bank Underground blog, the “volatility exposure of leveraged ETPs has fallen by around three quarters since early February.” Another quote from the piece: “In addition to making spikes in volatility sharhper, VIX ETPs also have the potential to make them shorter-lived.” Recall that SVXY, one of the key VIX ETPs (and a surviving inverse instrument), started targeting -0.5 leverage instead of -1 at the end of February. At the end of March, Cboe and Wall Street Horizon put…

OCC Re-Elects Craig Donohue as Executive Chairman Newsletter,Options

Observations & Insight The Future of Exchanges Will Feature More Collaboration, WFE Report Says Jim Kharouf – JLN Exchanges will have to spend more, share more and collaborate more in the coming years, according to a published report from the World Federation of Exchanges (WFE) and Oliver Wyman. The report, issued on Thursday at the 35th IOMA: The WFE’s Clearing & Derivatives Conference in Chicago focused on the recent trends for the exchange, CCP and market infrastructure providers since the 2008 financial crisis. /jlne.ws/2HwdDlQ ++++++ Editor’s Notes Our next episode of The Spread will be posted Monday. According to FIA…

Cboe News Day; SEBI Derivatives crackdown; Volatility a One-Sided Affair Newsletter,Options

Observations & Insight It’s Cboe News Time Apparently Spencer Doar – JLN A flood of news poured out of Cboe these last 24 hours. Much of it stems from continued integration and restructuring after the Bats deal. Then again, Cboe is celebrating the 25th anniversary of the VIX all month, so why not announce a bunch of stuff? (The announcement releases are all in our “Exchanges” section.) First came the announcement of a new Markets Division, bringing together the product, sales and business development units. Andy Lowenthal and Bryan Harkins will be co-heads of the unit. The next release was…

MIAX Challenges Nasdaq Options Patents; Crisis hedge funds’ lackluster performance Newsletter,Options

Observations & Insight With trade war, U.S. and China stumble into the Thucydides Trap John Kemp – Reuters The United States and China have fired the opening shots in a trade war that may be hard to stop. /jlne.ws/2GxA4tV ****SD: Regardless of the situation, whenever I see Thucydides mentioned I have to reread the Financial Times Alphaville article For the love of Zeus, stop misusing Thucydides from last summer for context. It’s well worth the more in depth history lesson/tuneup. Surprisingly, three of the four Trump officials referenced in the piece who are known for their Thucydides fandom are actually…

OCC Volume Up 15 Percent in March; Vol’s Bite; Goldman’s Vol View Newsletter,Options

Observations & Insight March 2018 Options Exchange Marketshare via OCC Lead Stories OCC Cleared Contract Volume Up 15 Percent in March OCC OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in March reached 442,945,572 contracts, a 15 percent increase from March 2017. OCC’s year-to-date volume is up 32 percent with 1,400,345,396 cleared contracts in the first quarter of 2018, compared to 1,058,670,212 contracts in the first quarter of 2017. /jlne.ws/2GJUrmT ****SD: It will be nice to have volatility and increased activity to talk about at OIC this year. Volatility’s Bite Returns Ginger Szala…

OCC cleared volume up 42 percent; We actually don’t know; Beware low vol or long live low vol? Newsletter,Options

Observations & Insight January 2018 Options Exchange Marketshare vs January 2017 via OCC ++++++ Detailed January Volume Breakdown via OCC Lead Stories OCC Cleared Contract Volume Increased 42 Percent in January OCC OCC, the world’s largest equity derivatives clearing organization, announced today that cleared contract volume in January was up 42 percent from January 2017 with 479,812,469 contracts. Average daily volume at OCC is up 35 percent in 2018 with 22,848,213 contracts. OCC cleared futures volume is up 23 percent in January with 11,907,702 contracts. OCC’s stock loan program reported strong volume numbers with 233,482 transactions in January, up 29…