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Tag Archives: volatility

NASDAQ’s Longfin options tangle; Creative FX trades; Manipulation talk Newsletter,Options

Lead Stories Now NASDAQ gets in a tangle Jamie Powell – Financial Times Last month we published a story on Longfin, a Nasdaq listed trade-finance company with a tenuous link to blockchain technology and hence an excessively high market capitalisation. To recap, FTSE Russell decided to add Longfin to its Russell 2000 and 3000 small-cap indexes. Index funds then bought shares for their various products. There was one problem though. /goo.gl/7p4WD7 ****SD: “Tomorrow, 26,951 of Longfin put options will expire, representing 2,695,100 shares as each options contract is for 100 shares. In other words, the rights to sell account for…

VIX concerns; Europe vol gauge manipulation “unlikely” Newsletter,Options

Lead Stories VIX Rigging Talk Erupts on Wall Street After Another Wild Swing Lu Wang, Elena Popina and Luke Kawa – Bloomberg The Cboe Volatility Index is how Wall Street measures anxiety. Lately it’s the gauge’s own plumbing that’s making people nervous. /bloom.bg/2HcVuMX ****JB: Financial Times story on same subject here. Bloomberg Daybreak has a video describing the action here. Manipulation of Europe’s stocks volatility gauge ‘very unlikely’ Reuters Any manipulation of Europe’s main gauge of stocks volatility would be “very unlikely”, France’s financial markets regulator said in a research note on Thursday, following allegations that the equivalent U.S. “fear…

VIX settlement surge; Reinventing equity collars; Melt-up elation for volatility gauges Newsletter,Options

Observations & Insight The Week Thus Far – In Case You Missed It Spencer Doar – JLN MIAX plans to launch its third exchange, MIAX Emerald, in Q1 2019. Cboe announced it would begin disseminating a one year VIX calculation (VIX1Y) and that it is “exploring the development of a futures contract” on that index. Speaking of the VIX, it took a stroll south of 15 yesterday. Then this morning – settlement time – it went on a 30 minute run from 15ish to 17, again bringing up talk of manipulation. See the lead Financial Times story below about that…

MIAX Announces New Exchange; Cboe’s New 1-yr VIX; Strong options volume Newsletter,Options

Observations & Insight MIAX Sees Green Spencer Doar – JLN The Spread episode linked to below is already missing big news! The 15 exchange-strong U.S. equity options market is getting another younger sibling from the same group – MIAX – that brought the market its 15th exchange. Named Emerald (see what they’re doing here?), the exchange is scheduled to open in Q1 2019 and will “fill a market structure niche not currently offered by the MIAX Exchange Group.” This is yet another step in MIAX’s ever-increasing presence in the options space. According to the monthly Options Liquidity Matrix (link in…

The Spread – Week of 4/9 to 4/13 and 4/16 Video,video

Don’t be confused! The plaintiff in the Cboe VIX manipulation suit is named Spencer, but has nothing to do with the host of “The Spread.” That, and more, gets cleared up in this week’s options news recap.  The following are stories referenced this week:  Crain’s Chicago Business – How the wrong bet on market volatility annihilated this mutual fund Class Action Complaint, Northern District of Illinois – Bueno vs. Cboe Financial Times – How a volatility virus infected Wall Street PRNewswire – MIAX Options and T3 Index to Launch SPIKES Volatility Index; Proprietary Products to Follow on MIAX Exchanges Business Insider –…

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…

How a volatility virus infected Wall Street Newsletter,Options

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Lead Stories How a volatility virus infected Wall Street; The collapse of a few small funds in February helped fuel a terrifying stock-market slide. Why? Robin Wigglesworth – Financial Times Music teacher Chris Pomrink was driving between two lessons outside Philadelphia, when a friend called with some distressing news: “Hey Chris, XIV is in trouble.” Pomrink, 30, checked his trading account. It was February 2 and XIV — an arcane, fiendishly complex financial security that he had sunk $2,500 into earlier that week — had indeed taken a beating. The “exchange-traded note”, or ETN, which allowed traders to bet on…

How a volatility virus infected Wall Street John Lothian Newsletter,Newsletter

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First Read Hits & Takes JLN Staff At yesterday’s IFM Smart Financial Regulation Roundtable: Implications of Cryptocurrencies in Washington DC, Rostin Behnam, commissioner, Commodity Futures Trading Commission, was asked if he could change one thing about the crypto markets what would it be? He said it would be regulation of the cash crypto markets, although not necessarily by the CFTC.~JK Also, Angela Walch, associate professor, St. Mary’s University School of Law made one of the more stunning comments about the crypto markets, which she said feature several powerful so-called miners, dispelling the notion that these markets are decentralized and uncontrolled…

Cboe lawsuit; Background on LJM losses; Vol to stay? Newsletter,Options

Observations & Insight Access-Fee Pilot: Fewer Fees, More Fragmentation? Rob Daly – MarketsMedia The access-fee pilot proposed by the U.S. Securities and Exchange Commission may increase fragmentation in the equity markets as Cboe Global Markets considers launching two additional order books to offset the pilot’s fee caps and prohibitions. “We have six exchanges, but we use four for equities and four for options,” said Chris Concannon, president and COO of Cboe, during the National Security Traders Association’s 2018 Market Structure Symposium in Chicago. “I promised the industry previously that we would not light up those books, but with the access-fee…