’50 Cent’ Volatility Buying Crops Up After Market Flare-Up Fades
Luke Kawa – Bloomberg
The volatility buyer dubbed “50 Cent” appears to have resurfaced, buying up market hedges as calm returned in the aftermath of a flare-up in Mideast tensions.
Calls on the Cboe Volatility Index, or VIX, with a strike price of 25 that expire on Feb. 20 are the most actively traded VIX option contract as of mid-morning Wednesday, with volumes in excess of 75,000. The biggest trade — accounting for nearly all of the volume — was a purchase of 73,601 options at $0.49 apiece shortly after U.S. markets opened.
A Wild Night for Global Markets Leaves Bulls Back in Control
Justina Lee – Bloomberg
By the time most traders reached their desk on Wall Street, it was over. Iran retaliated. Oil surged. Havens jumped. Then it all just faded away.
Market watchers booted up their terminals to find investors rediscovering their taste for risk across everything from equity volatility to currency options. Their bet? The Iranian missile strikes on U.S. bases in Iraq overnight were as much escalation as we’ll get, and it paves the way for a revival of the new-year rally.
Oil at the crossroads as hedge funds build large bullish position: Kemp – Energy & Oil
John Kemp – Reuters
Even before Iranian general Qassem Soleimani was killed by a U.S. air strike on Jan. 3, ratcheting up tensions across the Middle East, hedge funds had become very bullish about oil prices.
Fund managers amassed an unusually large net long position in petroleum futures and options towards the end of last year in anticipation of the global economy picking up in 2020, but that also leaves prices vulnerable to a correction if the recovery is delayed or fails to materialise.
Exchanges and Clearing
Position Limits, Accountability Levels and Large Trader Reporting Requirements in Connection with the Initial Listing of the Options on Bitcoin Futures Contracts
In connection with the listing of the Chicago Mercantile Exchange Inc. (“CME”) Options on Bitcoin Futures contracts (the “Options”) on trade date Monday, January 13, 2020 (see SER-8473 published November 19, 2020), please note below and in Appendix C of CME Submission No. 19-415 the corresponding spot month position limits (Rule 559), accountability levels (Rule 560), aggregation allocations (Rule 559.D) and reportable levels (Rule 561) for the Options.
Position Limits and Large Trader Reporting Requirements in Connection with the Initial Listing of the Block Cheese Futures and Options on Block Cheese Futures Contracts
In connection with the listing of the Chicago Mercantile Exchange Inc. (“CME”) Block Cheese Futures and Options on Block Cheese Futures Contracts (the “Contracts”) on trade date Monday, January 13, 2020 (see SER-8502 published December 17, 2020), please note below and in Appendix C of CME Submission No. 19-433 the corresponding single month position limits (Rule 559), aggregation allocations (Rule 559.D) and reportable levels (Rule 561) for the Contracts.
CME Reference Data API Notices: API Updates
Regulation & Enforcement
Senator Whose Spouse Runs Major Exchange to Help Oversee Regulator
Paul Kiernan – WSJ
A new U.S. senator whose spouse both runs and owns a minority stake in a major exchange operator will help oversee one of the company’s main federal regulators, setting up a potential conflict of interest.
Republican leadership assigned interim Sen. Kelly Loeffler (R., Ga.), whose husband, Jeffrey Sprecher, is chairman and chief executive of Intercontinental Exchange Inc., to serve on the Senate Agriculture Committee.
FIA files response with ESMA on the review of MiFID II Position Limits
On 8 January 2020, FIA and ISDA responded jointly to ESMA’s consultation “MiFID II review report on position limits and position management and draft technical advice on weekly position reports”.
OptionMetrics updates US options database to address evolving markets
OptionMetrics, an options database and analytics provider for international institutional investors, including quant traders and hedge fund managers, as well as academic researchers, has made significant updates to its IvyDB US options database, offering even greater accuracy across a broader range of data points.
OCC Promotes Carla Dawson to Chief Human Resources Officer
OCC, the world’s largest equity derivatives clearing organization, today announced that Carla Dawson, previously First Vice President, Talent Management, has been promoted to Senior Vice President and Chief Human Resources Officer. She reports to CEO John Davidson.
Carla DawsonDawson previously was responsible for partnering with leaders across OCC to develop and implement comprehensive talent management and development strategies to support OCC’s business strategy. This included performance management, employee engagement, training and organization development, and change management.