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Tag Archives: risk management

The Crowded Short Vol Trade; Earnings drive swings; Monthly volumes Newsletter,Options

Observations & Insight Cboe Throws Launch Date Punch at Crosstown Rival CME Spencer Doar – JLN Aren’t people supposed be getting into holiday mode? Isn’t December supposed to be slow, with nothing but junior staff running around trying not to mess things up? In the cryptocurrency space, that’s clearly not the case. The CFTC on Friday said CME Group and Cboe Global Markets were okay to launch their respective bitcoin futures products through the self-certification process. CME quickly announced it would launch bitcoin futures on December 18, and then Monday morning, Cboe announced a December 10 launch date and free…

Putting on My Broker Hat About Bitcoin Blog,Commentary,Fintech,Mwiki,Regulation,Tech / HFT

Everyone is asking about bitcoin. A journalist called and asked to interview me. A magazine called and asked me to write something. A brokerage firm chief risk manager called to ask me my opinion about bitcoin and bitcoin futures. Two weeks ago, a former employer I have not seen in 10 years called me out in Coindesk.com for my bitcoin qualms. At the dinner table my son Robby opened up about owning not just bitcoin, but bitcoin cash, ether and monero. This is a full-fledged mania. As I was driving home last night and thinking about bitcoin (as opposed to…

Short-VIX Trade Shows Few Signs of Fading; More BTC; Sleepy Oil; Markets Numb to Risk Newsletter,Options

Observations & Insight Bitcoin stirs volatility fears as it heads for $10,000 Hannah Murphy – Financial Times The price of bitcoin soared to record highs on Monday and approached the symbolic $10,000 threshold even as some traditional marketplaces warned they were becoming “uncomfortable” with the volume and volatility of trading in the cryptocurrency. on.ft.com/2BmDb0m ****SD: Some folks must be making that “baby’s first taste of lemon” face. Just two weeks ago – when BTC was trading for less than $8k – LedgerX initiated it’s first long-term bitcoin futures option with a strike of $10,000 (sold/bought for $2,250.25). The contract expires…

HFTers Jump Into Bitcoin; Oil Volatility; Calm Sterling Newsletter,Options

Observations & Insight Why ISPs Are About To Spoil Your Thanksgiving Dinners: Food For Thought on Net Neutrality Repeal By Jeff Bergstrom – JLN Yesterday it was announced the F.C.C. plans a net neutrality repeal. This is not a particularly new story. The telecoms have been working towards this for years. But now it seems they are about to achieve their goal and that is not a good thing unless you are a major investor in telecom stocks. It is a truism that the last thing anyone should talk about over Thanksgiving dinner is politics. We all have that crazy uncle…

Options on ETFs Warning; Short-vol Funds; Oil Options Newsletter,Options

Observations & Insight VIX Index Hits All-Time Daily Closing Low Value of 9.14 Matt Moran – VIX Views On November 3 the Cboe Volatility Index (VIX) closed at 9.14, an all-time record low for both a daily and weekly closing value for the index. jlne.ws/2Ad9w9m Lead Stories If You’re Trading Options on ETFs, Read This First Simon Constable – WSJ More individual investors are trading options on exchange-traded funds. The trend worries some financial experts, who say inexperienced traders may not fully understand the risks. Interest in ETF options comes amid growth in the number of ETFs and the amount…

The Concept of Basis – Gregg Doud Feature,MWEd,Video,video

“The beauty of this industry is, I don’t care how much artificial intelligence or how many algorithms you use, you’re still going to have to have somebody that understands where stuff is supplied, where it comes from and where it goes and the trade flows associated with it.” In this video from MarketsWiki Education’s World of Opportunity event in New York, Gregg Doud, president of the Commodity Markets Council, discussed the concept of basis and how it applies to the financial industry. According to Doud, basis is a fundamentally important concept in the world today. Doud also talked about Dodd-Frank…

Cinnober’s Persson on What Every CCP Needs in Today’s Clearing Landscape Feature,Video,video

In this video from FIA IDX, Cinnober’s Chairman of the Board, Nils-Robert Persson, takes us through recent developments in clearing and what the next steps ought to be. Persson first highlights a key shift for clearinghouses: the moment they started to clear OTC derivatives. Before that shift, clearinghouses developed their own systems — CME had SPAN, the OCC had TIMS, etc. To Persson, that was all well and good. The systems were tailored for the institutions deploying them. But when it came to OTC derivatives, clearinghouses went shopping for systems from big banks. “That’s a real problem in fact because…

Anxiety Dissipates After First Ballot; Expectations for euro-dollar, US stock volatility plummet; The Downside of Managing Downside Risk Newsletter,Options

Observations & Insight Last week’s notables A lot happened last week in the options space. If anybody didn’t follow the week’s developments, here’s a little recap. Big trends are continuing in the market making world. I wouldn’t say they are good. First, Interactive Brokers revealed in its earnings that the firm’s market making operations lost $22 million in Q1. (Remember that the company revealed a bit ago that they were shuttering their options market making operations — some of this loss is restructuring costs.) Second, the KCG/Virtu deal was agreed upon for $1.4 billion. It’s getting hard out there and…

Moving to real-time: Jerry Hanweck looks at trends in the options world Feature,Fintech,Interview

Editor’s Note: For clarity, every reference to Hanweck regards the firm Jerry Hanweck founded, Hanweck. When referring to the individual after first reference, I simply use Jerry. Real-time risk management — it might not be sexy, but it’s wildly important. That’s the message from Jerry Hanweck, founder and CEO of Hanweck, a provider of risk management and options analytics tools. While real-time is a big focus for the firm, it is just one of many endeavors that Jerry and his team are working on. In a sit-down with JLN, he provided his thoughts on the difficulties presented by huge data…