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Tag Archives: hedging

As Stocks Reach New Highs, Investors Abandon Hedges; Bond Market Vol at Multidecade Lows Newsletter,Options

Observations & Insight Top Options Stories of 2017 Countdown JohnLothianNews.com Listicles are occasionally the butt of jokes – Buzzfeed knows – but what about listideos? With 2017 in the bag, we at JLN thought we’d recap the year in options with a list of the big stories and trends – and there were a number. Below are links to stories referenced in the countdown. Watch the video and read the rest here » Lead Stories As Stocks Reach New Highs, Investors Abandon Hedges Gunjan Banerji – WSJ Big stock-market gains are leading a number of investors to abandon defensive positions…

The Spread: Week of 12/4 – 12/8 Video

A JLN debut! The Spread is a brief weekly recap of some of the notable activity in the options world. (It won’t always be this crypto heavy – we swear.) The following are stories referenced in this week’s episode of The Spread: WSJ – What Could Stir Up the VIX? Higher Inflation Bloomberg – Pound’s Acid Test on Brexit Is Yet to Come for Options Traders Highly Evolved Vol Blog – The Crowded Short Vol Trade JLN – Cboe Throws Launch Date Punch at Crosstown Rival CME Bloomberg – Congress Passes Two-Week Spending Bill to Avoid Dec. 9 Shutdown

The ‘VIX Elephant’ Is Due to Stampede the Market; A Boring Week in U.S. Stocks Newsletter,Options

Lead Stories The ‘VIX Elephant’ Is Due to Stampede the Market Luke Kawa – Bloomberg Derivatives traders should brace themselves for massive volumes in volatility-linked options. An options behemoth that’s been betting on a modest rise of the Cboe’s VIX index — and traded 3.15 million contracts so far this year — may roll over a huge position today or later this week based on trading patterns going back to July, Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors, wrote in a note. jlne.ws/2AXEnrb A Boring Week in U.S. Stocks Masks a Roaring Appetite for Hedges Dani Burger…

CAT to boost cybersecurity threat?; FX markets stuck in low-volatility; Light trading volume in banks’ results Newsletter,Options

Lead Stories Audit Trail Could Boost Cybersecurity Threat, Exchanges Say Benjamin Bain – Bloomberg CBOE’s Concannon sees little benefit gained for greater risk; SEC facing calls to delay CAT until security can be ensured Stock exchanges could become more exposed to cyberattacks through a trade database being built to help U.S. regulators police markets, industry executives said Tuesday. jlne.ws/2ygTyNx ****SD: Not to be lost in this ongoing discussion: SROs helped write the requirements for the CAT. FX Markets Are Stuck in Low-Volatility Quicksand With No Escape Dani Burger – Bloomberg Currency markets are trapped by low volatility and only a…

U.S. stock options hedging picks up in the midst of record calm; Bloomberg testing use of image recognition in volatility trading; Why Investors Shouldn’t Trust Low Volatility Newsletter,Options

Observations & Insight Making Sense of Options Order Flow – Henry Schwartz Education.MarketsWiki.com “There are four primary reasons people use options, and they tend to attract the smartest, the most well capitalized and most informed traders out there. Basically, dumb people lose their money trading options so quickly, they’re not really out there anymore.” In this video from MarketsWiki Education’s World of Opportunity event in New York, Henry Schwartz, president of Trade Alert LLC, breaks down the four primary reasons people trade options: leverage, defined risk, flexibility and liquidity. Schwartz then delves into a wealth of data to show what…

Extreme Positioning in Options Markets Can Offer Trade Signals, Says Morgan Stanley; Hedging Costs Jump in Europe’s Stock Market; Hong Kong plans bigger derivatives role Newsletter,Options

Lead Stories Extreme Positioning in Options Markets Can Offer Trade Signals, Says Morgan Stanley V Ramakrishnan – Bloomberg Data suggests Mexico peso to gain, U.S. two-year swaps to fall; Some assets move in opposite direction of positioning: MS Investors seeking winning strategies across asset classes might want to take a look at how traders are positioned in options markets to get an idea of what’s coming. A Morgan Stanley study of about 20 assets from currencies to Treasuries found traders could earn “significantly above average” returns by looking for what the paper’s authors called extreme positioning. That’s when the gap…

Traders Pile On Long Positions As Nifty Hits Lifetime High; China to Allow Onshore Bond Buying via Hong Kong This Year; Oil at $40 No Problem as U.S. Drillers Snub OPEC With Hedges Newsletter,Options

Lead Stories Traders Pile On Long Positions As Nifty Hits Lifetime High Agam Vakil – Bloomberg The Nifty 50 index advanced 1.7 percent on Tuesday hitting a new lifetime high of 9,122 on an intraday basis and even managed to close above the 9,000-mark for the first time on record. The index, which was trading in a tight range for the last couple of weeks, soared to record highs after Prime Minister Narendra Modi’s party secured an impressive mandate in the country’s largest state. bit.ly/2n0dFu6 China to Allow Onshore Bond Buying via Hong Kong This Year Bloomberg China will allow…

Investors Stop Hedging As Market Pushes Higher; Bund Option Traders Not Sweating Over Le Pen Risks; Politics ‘tightening grip’ on financial market behavior – BIS Newsletter,Options

Observations & Insight TradeStation Introduces Simplified Commission Pricing for Equities and Options Trades: $5 per Trade for Equities, $5 per Trade plus $0.50 per Contract for Options GlobeNewswire TradeStation, a Monex Group company and award-winning* online broker-dealer and futures commission merchant, announced today new per-trade pricing for stocks, ETFs and options for all new customers and all existing customers who notify TradeStation they would like to switch to the new pricing. jlne.ws/2mfpOZX +++++ They’re slashing prices! Spencer Doar – JLN Folks are finally getting the memo that broker fees need to go down if the industry is to truly access…

Hedging demand perks up even as volatility craters; Derivatives market is short of a $3.7tn lifeboat; Trapped China Cash Breathes Life Into Hong Kong Yuan Banking Newsletter,Options

Lead Stories Hedging demand perks up even as volatility craters Saqib Iqbal Ahmed – Reuters Soaring U.S. share prices and plunging market volatility measures may paint a picture of optimism, but there are signs in the equity options market that investors have started to question how long this goldilocks period can last. jlne.ws/2lvZDxd Derivatives market is short of a $3.7tn lifeboat John Dizard – Financial Times For institutions that use derivatives, collateral put up by their counterparties provides the same reassurance lifeboats do on a ship. Unfortunately, for all the post-crisis reforms, it would appear that we are a couple…