Lead Stories

J.P. Morgan Knew of Risks
Dan Fitzpatrick, Gregory Zuckerman and Joann S. Lublin, The Wall Street Journal
Some top J.P. Morgan Chase & Co. executives and directors were alerted to risky practices by a team of London-based traders two years before that group’s botched bets cost the bank more than $2 billion, according to people familiar with the situation.
Interviews with more than a dozen current and former members of the bank’s Chief Investment Office, the unit responsible for the losses, indicate that discussions about reining in London traders started as early as 2010. Certain directors were briefed then on a foreign-exchange-options bet that went bad, and were told that the trader responsible wouldn’t be allowed to go overboard in the future, one of these people said.
http://jlne.ws/L35hR5

Stocks Near Highs, All S&P Sectors Climb
JeeYeon Park, CNBC
Stocks extended their gains Tuesday, with all key S&P sectors trading higher, but investors remained cautious amid the ongoing uncertainty in the euro zone…
The S&P 500 and the Nasdaq also rallied. The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped below 23.
All key S&P sectors turned higher, led by financials and materials.
http://jlne.ws/MAJcGk

Hedge-Fund Assets To Double? Hold On A Sec
Brendan Conway, Barron’s
The eye-grabbing headline on a press release in my inbox this morning: “Hedge Fund Industry Assets To More than Double in 5 Years: Citi Prime Finance Survey.” You may also have seen it written up in the Wall Street Journal.
http://jlne.ws/Lixt0x

OptionsMonster Volatility Sonar Report with Jamie Tyrrell of Group1 Trading:

OptionsMonster USDA Report with Eric Wilkinson:

Exchanges

CME Group Announces Record First-Day Trading Volume in Short-Dated New Crop Options
Press Release
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that Short-Dated New Crop Options set a record on Monday, June 4, trading 2,105 Short-Dated New Crop Corn options contracts on its first day. This represents the greatest volume of day-one trading for any of CME Group’s agricultural commodities products, and surpasses the previous record of 1,840 contracts set by Soybean Calendar Spread Options (CSO) on June 1, 2009. Short-Dated New Crop Options contracts are listed with and subject to the rules of CBOT.
http://jlne.ws/Lk2gbJ

Daily Option Preliminary Settlement Price Reports To Be Eliminated [ICE Futures U.S.]
Press Release (Full Text here)
After the close of business for trade date Tuesday, July 2, 2012 the Exchange will cease publishing preliminary option settlement reports in Report Center each day.
Daily option settlement premiums will continue to be published on the ticker.
http://jlne.ws/KqwZJm (PDF)

The National Stock Exchange Appoints William Karsh as Special Advisor
Press Release (via email)
National Stock Exchange, Inc. (NSX), wholly-owned by the CBOE Stock Exchange, LLC (CBSX), announced today the appointment of William Karsh as Special Advisor.
Karsh’s expertise in electronic trading and market structures, plus his extensive industry experience, will help spearhead the exchange’s strategic growth initiatives.
Prior to joining NSX, Karsh served as CEO and COO of Direct Edge Stock Exchange, Inc., where he introduced the dual exchange model and Enhanced Liquidity Program. He has held other senior executive positions at Knight Trading Group, UNX Inc., Trading Services Group, Inc., Sun America and the National Discount Brokers Group.

Regulation

US SEC issues derivatives regulation roadmap
Sarah N. Lynch, Reuters
The U.S. Securities and Exchange Commission released a “roadmap” on Monday that shows the order in which it expects new rules for the over-the-counter derivatives market to take effect.
The rules, which are required by the 2010 Dodd-Frank Wall Street reform law, are aimed at bringing greater transparency to the $708 trillion over-the-counter market.
http://jlne.ws/Lu44C9

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