A Reddit trader claims to have raked in a $4.3 million gain by betting on Tesla’s skyrocketing stock
Ben Winck – Markets Insider
A Reddit member with the username WSBgod claims to have made millions of dollars in unrealized gains from options linked to Tesla stock. A $126,000 investment was worth $4.3 million at the time of the user’s Tuesday screenshot and carried a value of roughly $4 million by the session’s close. A separate $46,491 stake in longer-dated Tesla calls was worth nearly $1.4 million, according to a separate screenshot. If WSBgod didn’t sell the positions on Tuesday, the trader stands to lose a large portion of their profits from Tesla’s Wednesday tumble.
Former OKEx Exec to Raise $40M for Crypto Derivative Exchange
David Pan – Coindesk
Retail investors will soon have access to crypto trading options that were traditionally only available to institutional clients. Andy Cheung, former chief operating officer at OKEx, plans to launch a crypto derivative exchange called ACDX by the end of Q2 2020. The Seychelles-based exchange aims to offer futures, options, callable bull/bear contracts, warrant contracts and fixed coupon notes. “One of our main goals for the exchange is to provide retail investors with … structured products that are more commonly used by accredited crypto investors and wealth managers,” Cheung told CoinDesk, noting the products could also give wealth managers more tools to better meet their clients’ investment objectives.
Barclays Succumbs, Flips Options to GTS
“Sometimes it is the people no one imagines anything of who do the things that no one can imagine.” – Alan Turing One by one, those willing to stand and make markets in options are – uh – taking a knee. Back in December (2019), Barclays became the latest in a long string of players – big and nots-so-big – to punt their options trading business to a willing buyer before any more value evaporated. So, we thought to take a closer look at what patterns or signals might exist, if any, to detect moves like this. Here’s the setup: It turns out that in a Feed post entitled, “Goldman Sachs and the Long Arc of Hull Trading,” we have some useful benchmarking to draw from to frame Barclays’ ultimate decision.
Euro near two-month lows on German data, options
Saikat Chatterjee – Reuters
The euro struggled to stay above a two-month low on Thursday after data showed German industrial orders unexpectedly plunged in December, suggesting the euro zone economy would remain sluggish in the opening months of 2020. Contracts German goods fell 2.1% in December from November, the biggest drop since February. A Reuters poll had forecast a 0.6% rise. Weak data and some large option structures kept investor sentiment subdued. The euro found some support just below $1.10.
China Risks Exporting Market Volatility Like Never Before
Jeanny Yu and Livia Yap – Bloomberg
China’s expanding links to the global financial system means it’s harder than ever for the nation to keep its own troubles from spilling over to the rest of the world.
A deadly virus outbreak has shattered optimism in the world’s second-largest stock market, creating the biggest price swings in four years. Authorities stepped in to stem the panic, banning some brokerages from net selling equities and injecting a net 550 billion yuan ($79 billion) of liquidity in two days as markets reopened after an extended halt.
Exchanges and Clearing
Cboe Global Markets Reports January 2020 Trading Volume
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today reported January monthly trading volume.
Intercontinental Exchange Reports Fourth Quarter & Full Year 2019 14th consecutive year of record full-year revenues
BusinessWire (press release)
Jeffrey C. Sprecher, ICE Chairman & Chief Executive Officer, said, “We are pleased to report our 14th consecutive year of record revenues. Leveraging our leading technology and market expertise, we expanded our suite of risk management solutions, adding new products and services across an array of asset classes and geographies. And, as we shift to 2020, our relentless focus on innovation and delivering efficiencies for our customers should again provide the foundation for continued growth and stockholder value creation.”
Transfer of Eight (8) NYMEX Metals Futures and Option Contracts to COMEX – Additional Information
Further to SER 8507 dated December 30, 2019, and pending all CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX”) and Commodity Exchange, Inc. (“COMEX”) (collectively, the “Exchanges”) intend to transfer the listing of eight (8) metals futures and option contracts (the “Contracts”) set forth in the table below from NYMEX to COMEX effective Sunday, March 29, 2020 for trade date Monday, March 30, 2020.
CME Group Inc. Names Slate of Director Nominees
CME Group Inc. today announced its slate of candidates for its board of directors for election at the company’s annual meeting to be held Wednesday, May 6, 2020. The board of directors recommends the Class A and Class B shareholders voting together elect the following individuals to the board:
Regulation & Enforcement
Derivatives are a precious commodity in UK-EU trade
Philip Stafford – Financial Times
A regulatory spat over Europe’s commodity derivatives market offers a vivid example of the dilemma the City of London faces in the trade talks between the UK and the EU.
Mifid II regulations, which came into force in early 2018, required the UK to implement new rules around the commodity trades that can be made off-exchange. The aim, as with most of the regime, was to increase transparency.
CME Group Announces Bryan Durkin to Step Down as President
CME Group today announced that Bryan T. Durkin will step down as President in May of this year. At that time, Durkin will begin serving as a special advisor to the company, reporting to CME Group Chairman and Chief Executive Officer Terry Duffy. Additionally, yesterday, the CME Group board of directors recommended that Durkin be slated for election to the company’s board at its May 2020 Annual Meeting of Shareholders.
Tesla Stock Has Had a Wild Run. How to Take Profits With Options.
Steven M. Sears – Barron’s
The Wuhan coronavirus is the classic black-swan event that almost no one anticipated and that everyone must confront. The stock market initially reacted badly, but now the virus has seemingly killed the black swan.
Still, investors must confront the widespread belief that the U.S. stock market is unstoppable and seemingly immune to black swans. Maybe it’s because interest rates are so low and investors feel not buying stocks is riskier than buying stocks. Or maybe it’s because President Donald Trump increasingly is seen as the stock market’s guardian.
Where Have All The Futures Traders Gone? Ask the Hedge Funds
Katherine Greifeld and Cameron Crise – Bloomberg
The slow death of hedge funds is taking down a once-popular derivatives contract with it.
That’s one of the theories for why aggregate positions in S&P 500 futures have fallen steadily as a percentage of the index’s market cap since the financial crisis. The decline mirrors a fall in e-mini S&P 500 contracts reported by leveraged accounts, according to the Commodity Futures Trading Commission. The category — leveraged money — is often used as shorthand for hedge funds and short-term traders.