Oil Options Traders Buy Into Talk of Crude Topping $100 a Barrel
Alex Longley – Bloomberg
Oil trading executives spoke, and the options market liked what it heard.
The total number of options traded on Brent crude surged on Monday to about 274,000 contracts, the highest ever, data showed. The flurry was driven by record call trading — including bets on $100 a barrel or more — as the global benchmark reached an almost four-year high and major oil trading houses publicly predicted the return of triple digit crude for the first time since 2014.
****JB: MarketWatch article on the same subject
Corporate Canada takes side bet with FX hedges as NAFTA risk intensifies
Fergal Smith – Reuters
As the month-end deadline for North American trade talks nears, Canadian executives who hedge foreign exchange risk have been changing their strategies so their companies can profit from any possible swings in the Canadian dollar.
Companies ranging from manufacturing, agriculture to retail are choosing to hedge their foreign exchange risk with options, which have become cheaper than normal to buy, rather than enter into contracts that lock in a future currency rate, currency dealers said.
Marijuana ETF’s Premium Mishap
Cinthia Murphy – Nasdaq
Another week, and another cautionary tale about investing in marijuana stocks through an ETF.
Investors who own the popular ETFMG Alternative Harvest Fund (MJ) saw the ETF’s creation/redemption mechanism fundamentally break in the past week, leading to notable premiums in the ETF’s price relative to its net asset value.
Why the IL&FS default is spooking India
Nupur Anand – Quartz
India’s financial markets are in the throes of a bear hug. And the core of the crisis that has shaved off Rs8.48 lakh crore ($116.33 billion) in investor wealth in the last ten days is Mumbai-based Infrastructure Leasing & Financial Services (IL&FS).
IL&FS is an over 30-year-old infrastructure lending giant that claims to have helped develop and finance projects worth $25 billion in Asia’s fastest-growing economy.
Exchanges and Clearing
CME Group Announces Copper Options Daily Trading Volume Record
CME Group, the world’s leading and most diverse derivatives marketplace, today announced its COMEX Copper options reached an all-time daily volume record of 8,089 contracts (91,727 metric tons) traded on Friday, September 21. Friday’s volume is nearly double the previous record of 4,255 contracts (48,250 metric tons), set on July 5, 2018.
Cboe Global Markets Announces Date of Third-Quarter 2018 Earnings Release and Conference Call
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today said it will announce its financial results for the third quarter of 2018 before the market opens on Friday, November 2, 2018. A conference call with remarks by the company’s senior management will begin at 7:30 a.m. Central Time (CT), 8:30 a.m. Eastern Time (ET).
Regulation & Enforcement
Derivatives and debt markets face race to end links with Libor
Katie Martin and Philip Stafford – Financial Times
UK financial authorities had a clear message for banks and insurers last week: We are not kidding about the death of Libor, and you must be ready.
About $170tn of derivative contracts depend on the benchmark rate and traders at one investment bank in Canary Wharf are well aware that Libor’s days may be numbered. The 2021 switch-off “is really big,” said one.
Wall Street Regulator Facing Cash Crunch Offers Staff Buyouts
Benjamin Bain and Robert Schmidt – Bloomberg
The main U.S. regulator of complex derivatives that helped fuel the 2008 financial crisis is offering some of its employees buyouts after lawmakers refused years of agency requests to increase funding.
Facing a cash crunch, the Commodity Futures Trading Commission began telling workers last month that it would give eligible employees as much as $25,000 to leave, according to an email sent to staff. The regulator also said it would allow early retirement, in some cases, while allowing employees to keep their full benefits.
KGI Securities Contracts with Trading Technologies to Distribute the TT Platform
KGI Securities (Singapore) Pte Lte, a leading brokerage in Asia, and Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, today announced KGI Securities has contracted with Trading Technologies to distribute the TT trading platform. In doing so, KGI Securities’ global customer base now has access to TT’s comprehensive suite of industry-leading trading tools, including MD Trader, Autospreader, ADL, Spread Matrix, and charting and analytics functionality, for superior execution.
CME Group Launches Free Tool to Help Market Users Gauge Futures Market Liquidity Across Time Zones
A powerful new tool to measure futures market liquidity is now available to CME Group market users around the globe. The CME Liquidity Tool allows traders to measure current and historical liquidity of CME Group futures products across asset classes, free of charge. Armed with around-the-clock liquidity data, clients can capitalize on new trading opportunities in increasingly deep and liquid CME Group futures markets across time zones around the globe.
Executive Board Member Mehtap Dinc leaves Eurex
As announced on 31 August 2018, Eurex enhances its asset class focus by combining the sales and product design functions for equity index and for fixed income derivatives, respectively. The new structure builds on Eurex’ integrated value proposition and links into the set-up of many clients’ trading operations. Bundling exchange-traded and OTC products under individual asset class leadership enables Eurex to further strengthen its holistic product and service offering.
LSEG Names Marshall Bailey as Chairman of its Clearing House LCH Group
Celeste Skinner – Finance Magnates
The London Stock Exchange Group (LSEG) announced this Tuesday that Marshall Bailey has been appointed as the chairman of its clearing house LCH Group (LCHG). He has also joined LSEG’s Board as an Independent non-Executive Director along with Ruth Wandhöfer.
Do Big Deals Signal Big Gains Or Big Trouble Ahead?
Martin Tillier – Nasdaq
Is it just me, or does it feel just a little bit like 1998 this morning, or maybe 2006? The stock market is buoyant based largely on strong data, but so far valuations are not looking too stretched when taken on average. There is a slight suspicion that we are shrugging off potential problems and that there will be a price to pay, but there are other signs that we have a long way to go before that time comes.
All that has an eerily familiar feel to those of us who have been around a while.
The real echoes of the past however, came when I woke up this morning to news of two big M&A deals.