Analysis: Apple options – is the tail wagging the dog?
Angela Moon, Reuters
As the world’s most valuable publicly traded company, Apple’s share price rises and falls – mostly rises – on its fat profits and big sales of newly introduced gadgets.
That is, except for the last few hours of trading on Fridays when the options market takes charge.
http://jlne.ws/P8uIDW Nasdaq ETF order-type proposal raises questions
John McCrank and Jessica Toonkel, Reuters
Nasdaq OMX Group (NDAQ.O) has proposed a new order type for exchange-traded funds (ETFs) that may comfort investors who feel there is not enough transparency in the pricing of some securities.
But some observers and ETF providers say the proposal may be a solution in search of a problem – and might actually result in some investors’ trades not getting filled.
http://jlne.ws/P8r0Kl Hedge Fund Advisors Plan to Increase Use of ETFs
Alex Akesson, HedgeCo.Net
Guggenheim Investments, which represents $130 billion in hedge fund assets, announced the results of a survey of financial advisors who attended the Morningstar ETF Invest Conference in Chicago.
The results found that 78 percent of financial advisor respondents plan to increase their use of ETFs in retail investors’ portfolios over the next year.
http://jlne.ws/SEU9uA Japan Banks Hedge Bets Over New US Swap Rules
Kana Inagaki and Kosaku Narioka, The Wall Street Journal
Japanese banks appear to be hedging their bets in response to new U.S. rules tied to the Dodd-Frank market overhaul. Officials say they may cut back on trading financial derivatives with their U.S. counterparts while stopping short of not registering with U.S. regulators at all.
http://jlne.ws/S0MXZc Is high-frequency trading a threat to stock trading, or a boon?
Dina ElBoghdady, The Washington Post
Andy Brooks and Gus Sauter have been managing funds at two of the nation’s best-known investment firms for decades, but they can’t agree on what to make of the Wall Street phenomenon of high-frequency trading.
Brooks, head of U.S. equity trading at Baltimore-based T. Rowe Price, sees the high-speed traders as a nuisance, even a threat. Sauter, chief investment officer at the Vanguard Group, sees them as beneficial to all investors.
ExchangesCME to begin payouts to Peregrine customers
Reuters (via The Chicago Tribune)
CME Group Inc. plans next month to begin paying $2 million to former clients of Peregrine Financial Group, the failed futures brokerage looted for years by its now-jailed founder.
The payments will go to nearly 200 farmers, ranchers and cooperatives who traded on CME’s exchanges, a CME spokeswoman told Reuters on Thursday.
RegulationCFTC Said to Allow More Swaps Trading Via Phone in Final Rule
Matthew Leising, Bloomberg
The Commodity Futures Trading Commission will allow more swaps to be traded over the phone than initially indicated under proposed Dodd-Frank Act reforms, according to people familiar with the matter.
Chairman Gary Gensler outlined the changes in a meeting two days ago in New York with executives of firms that want to create regulated entities allowed to trade swaps, known as swap execution facilities, or SEFs, according to two people who attended.
http://jlne.ws/RZZE6g EU May Toughen Commodity Swaps Curbs in Financial Rules
Jim Brunsden, Bloomberg
Commodity derivative speculators may face tougher curbs under compromise plans to overhaul the European Union’s financial market rules.
Governments may seek to restrict the number of commodity- derivative contracts that traders can enter into, according to a draft version of the rules prepared by Cyprus, which holds the rotating presidency of the EU. Such a requirement would go beyond a draft law published last year by Michel Barnier, the EU’s financial services chief.
TechnologyIncreased Electronic Trading in Futures Means Major IT Upgrades Needed
Anthony Malakian, Waters Technology
As more and more buy-side firms seek to take advantage of electronic trading strategies for futures—such as routing orders through direct-market access (DMA) solutions or using algorithmic-trading options—brokers and third-party trading platform providers have had to upgrade their offerings.
A Tabb Group report finds that nearly 90 percent of all US buy-side firms are expected to route their futures trades through electronic channels in 2012.