20-Year-Old Robinhood Customer Dies By Suicide After Seeing A $730,000 Negative Balance
Sergei Klebnikov and Antoine Gara – Forbes
The note found on his computer by his parents on June 12, 2020, asked a simple question. “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” The tragic message was written by Alexander E. Kearns, a 20-year-old student at the University of Nebraska, home from college and living with his parents in Naperville, Illinois. Earlier that day, Kearns took his own life.
****JB: From the article, “As the Covid-19 stock market swung wildly, Kearns had begun experimenting, trading options. His final note, filled with anger toward Robinhood, says that he had ‘no clue’ what he was doing.”
Robinhood reviews options trading offering following suicide by customer
John McCrank and Anna Irrera – Reuters
Robinhood Markets Inc said on Thursday it was reviewing its options trading offering following news that one of its customers took his own life after believing he had lost more than $730,000 using the free trading app.
VIX Won’t Go Below 20 Until There’s a Covid Vaccine, Cantor Says
Joanna Ossinger – Bloomberg
U.S. equity volatility won’t likely return to normal levels until there’s a vaccine for Covid-19, according to Cantor Fitzgerald LP.
The Cboe Volatility Index has more than halved since its mid-March closing peak of just below 83 to trade around the 33 level Thursday. That’s still almost 15 points above its lifetime average of 19, and it may not retreat much further anytime soon, strategist Eric Johnston said in a June 18 note.
Quadruple Witching Hits Stock Market, Sparking Bursts of Trading
Lu Wang – Bloomberg
Traders struggling to keep up with gyrations in U.S. stocks just got jolted by a surge of trading volume.
Transactions in stocks spiked amid a quarterly event known as quadruple witching, when options and futures on indexes and equities expire. During the first 15 minutes of trading, volume on the S&P 500 was about 70% higher than the average for that time of day over the past 30 sessions.
Stocks Turn Lower Amid Worsening Pandemic Outlook: Markets Wrap
Claire Ballentine and Vildana Hajric – Bloomberg
U.S. stocks turned lower after Arizona and Florida reported their biggest increases in new Covid-19 cases since the pandemic began and Apple said it would close some stores in those states. Oil retreated after topping $40 a barrel. Stocks had gained for a second day amid reports that China plans to accelerate purchases of American farm goods to comply with the phase one trade deal boosted risk appetite. Still, with uncertainty over how quickly economies can emerge from lockdowns, and a welter of options set to expire in a quarterly event known as quadruple witching, investors are facing bouts of volatility.
Exchanges and Clearing
Robinhood confirms Thursday trading outage in stocks, cryptocurrencies
Graham Rapier – Business Insider
The company said it was investigating problems with trading stocks, cryptocurrencies, and options contracts, as well as bank transfers. Within an hour, the problems were resolved.
Regulation & Enforcement
Deutsche Bank Settles Swap Reporting Outage, Spoofing Violations
Dylan Tokar – WSJ
Deutsche Bank will pay $9 million to settle claims stemming from an outage in 2016 of its swaps reporting platform, the U.S.’s derivatives market regulator said Thursday.
The fine by the Commodity Futures Trading Commission appears to close the book on longstanding issues related to information the bank is required to provide regulators about its swaps reporting business.
Options Regulatory Alert #2020 – 22 PHLX, NOM, BX, ISE, GEMX and MRX – Squarterly Quote Spread Parameter Relief through September 18, 2020
Effective June 22, 2020, the updated market maker quarterly quote width requirements on Nasdaq PHLX (PHLX), The Nasdaq Options Market (NOM), Nasdaq BX (BX Options), Nasdaq ISE (ISE), Nasdaq GEMX (GEMX) and Nasdaq MRX (MRX) will be effective through September 18, 2020. The exchanges may, in their discretion, amend these requirements by providing notice to members.
Options Regulatory Alert #2020 – 23 PHLX, ISE and GEMX – Bid/Ask Differentials for NDX Option Class through September 18, 2020
Effective June 22, 2020, the below market maker quote width requirements for options overlying NDX on Nasdaq PHLX (PHLX), Nasdaq ISE (ISE) and Nasdaq GEMX (GEMX) will be effective through September 19, 2020. The exchanges may, in their discretion, amend the bid/ask differentials by providing notice to members.
“Cybersecurity Doesn’t Have to Cost an Arm and a Leg”
Jules Weinstein – Tastytrade
Alex Nette and Michael Cardman wanted to start a cybersecurity company that was approachable and reasonable, as an alternative to a one-size-fits all model. In 2018, they wound up creating Hive Systems, by pulling out the highest risk factors from the cybersecurity industry and offering customized solutions. This helps guide organizations towards a more secure future. But they didn’t just stop at making it affordable, through their social progress arm, Hive Helps, they also offer pro-bono consulting services to qualified non-profit organizations and communities with limited resources.
(Podcast) Option Block 910: The Tragic Importance Of Options Education
Options Insider Podcast