JLN Options: Bats Exchange claims its first listings

Jan 17, 2012

Lead Stories

Bats Exchange claims its first listings
Eight exchange-traded funds from iShares will be the first publicly traded listings on the Lenexa-based Bats Exchange. Bats Global Markets operates the exchange and other markets where shares of public companies, options and other securities trade. The listings are the first in Bats’ competition with the New York Stock Exchange and Nasdaq to be the home market for publicly traded securities.

The Efficiency of the VIX Futures Market: A Panel Data Approach
The Journal of Alternative Investments
The empirical findings support the hypothesis that VIX futures are good predictors of spot VIX values. The tests show that the VIX futures with a forecast horizon up to 23 days do not incorporate a significant risk premium and, thus, can be considered as unbiased and efficient estimators of the relevant spot VIX levels.
UPDATE: EU’s Almunia: Competition Between Exchanges Needed
By Matina Stevis and Jacob Bunge Of DOW JONES NEWSWIRES
BRUSSELS (Dow Jones)–The head of the European Union’s competition watchdog said Tuesday evening that competition among financial exchanges is necessary as the E.U. prepares to deliver a decision on the proposed merger of Europe’s two biggest market operators. European Union competition chief Joaquin Almunia noted the E.U. had raised concerns around the planned merger of NYSE Euronext (NYX) and Deutsche Boerse AG (DB1.XE, DBOEF) and would be adopting a decision on the case “soon.”
“By now all of you are aware that the European Commission has raised preliminary concerns in the announced merger between two large exchanges in the E.U., and it has launched an in-depth investigation that is still ongoing,” said Almunia.

U.S. Stock Options With Biggest Changes in Implied Volatility
By Bloomberg News – Jan 17, 2012 10:30 AM CT
The following are the U.S. stock options that had the biggest percentage changes in implied volatility from the previous trading day as of 11:30 a.m. in New York. This {OSCH } search was limited to options that are more than 10 days from expiration, have trading volume of at least 200 contracts and have strike prices within 5 percent of the underlying security’s price

Stock ETFs Rally as S&P 500 Tests 1,300
ETF Trends
January 17th at 7:34am by Paul Weisbruch, Street One Financial
Stock exchange traded funds were set for a higher open Tuesday following the holiday weekend with S&P 500 futures testing the key 1,300 level before the opening bell. Equities marched steadily higher last week, even reversing early weakness last Friday to finish near the high end of their ranges while shrugging off bearish news out of Europe. We saw the SPX close at 1,289.09 on Friday, and it traded as high as 1,296.82 the previous session before giving back some gains.
…Volatility related ETNs were extremely active last week as we saw VelocityShares Daily 2X VIX Short Term ETN (NYSEArca: TVIX) trade a multiple of its average daily volume both last Thursday and Friday, and iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) and VelocityShares Daily Inverse VIX Short-Term ETN (NYSEArca: XIV) volumes were also healthy.


ConvergEx Group Launches ConnEx
Outsourced FIX Services Offer Scalable, Cutting-Edge and Cost-Efficient Infrastructure and Technology
NEW YORK, Jan. 17, 2012 /PRNewswire via COMTEX/ — ConvergEx Group, a leading technology company, today announced that it has launched ConnEx, a new business that provides a complete line of FIX connectivity infrastructure solutions. ConnEx offers the latest technology available and a dedicated team of professionals to customize solutions with highly-flexible FIX gateways and top-quality FIX protocol implementation. These services are designed to help customers more efficiently manage their daily operations and to save significantly on capital expenditures.


Six Sanity Checks For A Seemingly Virtuous VIX
ZeroHedge Submitted by Tyler Durden on 01/17/2012
As short-term volatility leaks lower and lower and more and more talking heads use this ‘risk-index’ as reason to be longer and longer stocks, we thought it might be useful to get some context on recent movements in volatility-related factors. Whether its seasonality, volatility term structure, or the high-yield credit market, VIX looks low (underpricing short-term risk). Perhaps it is a plethora of new-year-new-book covered call euphoria or just belief in the LTRO firewall fixing tail-risk (or US decoupling shifting us to moderation), short-term options are sending some different messages to the risk-is-on-like-donkey-kong ‘broadcast’ that the contemporaneous (and in no way leading) VIX is being mis-understood as indicating. We present six perspectives that should be considered before more nickels are picked up in front of the micro (earnings) and macro (you name it) steamroller.

Options Education

New Resources for a New Year 
By STEVEN M. SEARS, Barrons.com
Some books and Websites that encourage investors to think and act more sensibly in dealing with the market’s volatility and risk.
In these halcyon days of the new year, when much is made of little facts, such as the stock market trading at its highest level in many months, it is important to think more deeply than Wall Street’s sound bites. Volatility and risk are still the issues that investors must address and try to master. If the 2012 stock market resembles that of 2011, the next 50 or so weeks will be a roller coaster that ends at about the same level it began. Already, some investors are actively buying puts on the Standard & Poor’s 500 to protect against a sharp stock decline before March expiration.

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