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Tag Archives: market-maker

Goldman exits options market making; Historic volatility; SocGen struggles Newsletter,Options

Lead Stories Goldman Sachs to Withdraw From Part of U.S. Options Market Brian Louis – Bloomberg Will stop serving as a market maker on U.S. exchanges; Traders struggling with high costs, low volatility in options Goldman Sachs Group Inc. will stop serving as a market maker on U.S. options exchanges, following others in exiting that business amid high costs, sluggish volume and low volatility. /goo.gl/hxa23m ****SD: WSJ here. What’s the tech angle? More bronze than gold? Other “Goldman struggles” news from Reuters – Goldman taps energy execs in bid to turn around commodities unit Historic Volatility Recently Dropped Below 1.7…

CFTC grants registration to LedgerX to trade options on bitcoin; Options traders bet on U.S. steel stocks ahead of tariffs decision; Riding the Wave – Speed, Algos and Consolidation Newsletter,Options

Observations & Insight Crypto-innovations Jim Kharouf – JLN One look at today’s newsletter will tell you something – the traditional Wall Street system is ripe for disruption. The JLN piece on Overstock.com’s subsidiary Round One: How Overstock.com and tzero aim to knock out Wall Street shows how that firm is focused on using blockchain and its new Alternative Trading System ATS to do everything from trading securities via a blockchain, to finding an after hours trading niche. But tzero aims to create much more than that. While it’s still early days, it is not hard to imagine using the blockchain…

Goldman-Backed High-Speed Trading Network Sold for $39.5 Million; The Dutch Have Solutions to Rising Seas. The World Is Watching.; HFT – Not so flashy anymore John Lothian Newsletter,Newsletter

First Read Eurex CEO Sees Plenty of Structural Growth Potential JohnLothianNews.com “We also see a lot of structural growth potential… If we look at the equity index complex, there is a clear trend of many asset managers moving to passive investment structures. We see that … on the derivatives side [adding] new liquidity pools to global index families.” Thomas Book, CEO of Eurex Frankfurt AG and Eurex Zurich AG, believes the exchange can take advantage of the opportunities presented by a changing European landscape. Low interest rates for a long time equated to low interest in Eurex’s fixed income offerings…

HFT – Not so flashy anymore; Vicious VIX; JPM Head Quant Warns Of “Catastrophic Losses” For Short Vol Strategies Newsletter,Options

Observations & Insight An Excerpt of Note Spencer Doar – JLN I am re-reading “Liar’s Poker” because…I don’t really know why — maybe it’s just summer instinct with all these reading lists floating around. Anyway, about a quarter of the way in, there’s a notable anecdote from Michael Lewis’ training program at Salomon: “‘When you trade equity options,’ asked my friend Franky, ‘do you hedge your gamma and theta or just your delta? And if you don’t hedge your gamma and theta, why not?’ The equity options specialist nodded for about ten seconds. I’m not sure he even understood the…

Providing Stability for the U.S. Listed Equity Options Market; Virtu – More Market-Making M&A Ahead; The Changing Face of Volatility Newsletter,Options

Observations & Insight Futures For Kids had another successful fundraiser at the FIA IDX Gala Dinner last night, raising more than GBP140,000. Jim Kharouf – JLN Kim Taylor’s kilt challenge raised over GBP12,000, topping Bill Herder’s total last year, on her birthday no less. Next year’s wearer of the kilt is Mark Ibbotson of GH Financials. Over its 10-year history, FFK has raised more than GBP3 million for more than 40 charities in more than 16 countries. Way to go Bill Templer, Emma Davey and the rest of the FFK team. ++++++ Have you checked out the lineup for Trading…

Market Makers in Equity Options Are Vanishing; Stock options trading volume strong even as volatility dips; Trading blues? It’s just another kick in the vol Newsletter,Options

Observations & Insight   Sponsored Content BOX’s Focus in 2017: Improved Tech and a Trading Floor Click here to watch Much of 2017 for BOX depends on whether the exchange will get approval for its proposed trading floor. In this video from the Options Industry Conference in Scottsdale, Ariz., BOX CEO Ed Boyle spoke about BOX’s motivation to open a floor, revamping the exchange’s matching engine and helping market makers do business. Sponsored content from: ****SD: This is the fifth and final exchange leader video from the Options Industry Conference. If you missed them last week, here are links to…

Options Market Structure – Fragmented Reality; Citigroup launches “credit VIX”; Mirror, Mirror, Which Asset Class Is the Sleepiest of Them All? Newsletter,Options

Observations & Insight Editor’s Note: In yesterday’s options exchange recap, we incorrectly noted that “NYSE Options … reduced the speed of execution by 50 percent,” when in fact NYSE reduced latency by 50 percent (or, when phrased another way, increased the speed of execution). ++++ An Anecdotal Look: The Retail Crowd’s Option Adoption Spencer Doar – JLN All of the derivatives conferences I’ve attended in the past few years had a noticeable retail customer presence or focus — be it panel subject matter, attendees from retail oriented companies or just overall mentions in conversation. The same was the case at…

OPEC Agrees to Cut Production in Drive to End Record Glut; A World Without Market Makers; No Absolute Immunity For Exchanges, SEC Tells 2nd Circ. Newsletter,Options

Observations & Insight Blockchain That Makes Sense: How Post-Trade Digital Ledger Technology Will Make Banks And Brokers Happy Jim Kharouf – JLN When you talk about the potential for digital ledger technology, words like revolutionary and transformative are often mentioned. Ray Kahn and Thorsten Peisl are not in the disruptor camp. Yet both left solid jobs in the financial markets and launched blockchain start-ups aimed at bringing new efficiencies to the marketplace. Their message about blockchain was clear at the World Federation of Exchanges annual meeting in Cartagena, Colombia this month. Yes, blockchain is coming. No, it’s not going to…

A Basel netting issue: Pushing for less burdensome capital requirements in the options market Exchanges, OTC & Clearing,Feature,Mwiki,Options,Regulation,Regulation & Enforcement

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 a wide swath of industry participants believe that the Standardised Approach for Counterparty Credit Risk (SA-CCR) would better encapsulate the nature…