Bitcoin ETF Debut Didn’t Draw Retail Trader Interest, Vanda Says

Oct 21, 2021

Observations & Insight

Cboe’s Dave Howson Details His ‘Once in a Career’ Mission in Europe, Asia – Part 2

Cboe Global Markets’ Dave Howson took over as EVP and president, Europe and Asia Pacific in January 2020, a time marked by the challenges of Brexit and shutdowns related to the global pandemic.

In the second part of a two-part video interview, Howson talks about the timing of the September 2021 debut of Cboe Europe Derivatives, Cboe’s EU-based derivatives exchange. Customers had been requesting that Cboe start one for years, especially after its acquisition of Bats in 2017, he said, but the pieces finally aligned this year with Cboe’s purchase of EuroCCP, its clearing house in Amsterdam.

Watch the video »

Lead Stories

Bitcoin ETF Debut Didn’t Draw Retail Trader Interest, Vanda Says
Bailey Lipschultz – Bloomberg News
The hotly-anticipated debut of the first Bitcoin-linked exchange-traded fund listed in the U.S. was likely largely ignored by retail traders, according to Vanda Research.
The futures-based ProShares Bitcoin Strategy ETF, which debuted under the ticker BITO on Tuesday, drew $7.68 million in cash from individual traders, said the firm that tracks retail-trading flows in the U.S. The day-trading crowd instead preferred tech heavyweights like Apple Inc. and Alibaba Group Holding Ltd. in addition to clean energy stocks.

Fed’s Preferred Libor Replacement: SOFR Rate Drop Fuels Jitters Over Transfer
Alex Harris – Bloomberg
The drop in the Secured Overnight Financing Rate, the Federal Reserve’s preferred replacement for Libor, is raising concern about potential ructions in the final stretch of the transition.
With a little more than two months until market participants are prohibited from entering into new agreements tied to the London interbank offered rate, SOFR slipped 2 basis points this week to 0.03%. This rate volatility will likely be a focus for bankers at the next gathering of the Alternative Reference Rates Committee, the Fed-backed body that’s overseeing the transition away from Libor in the U.S., on Tuesday when it hosts a symposium.

What Happens When the World’s Key Metal Exchange Has No Metal?
Jack Farchy and Mark Burton – Bloomberg
What happens when the London Metal Exchange runs out of metal? That’s the question the exchange is urgently trying to address for its flagship copper contract, which sets the global price for one of the world’s most important commodities.

Bitcoin tops $66,000, sets record as crypto goes mainstream
Stan Choe – AP
Bitcoin stormed above $66,000 for the first time on Wednesday, riding a wave of excitement about how the financial establishment is increasingly accepting the digital currency’s rise.

Options Traders Bet Big Ether’s Turn for an ETF Is Coming Soon
Crypto options market indicates some traders have become more bullish on ether’s price next year.
Muyao Shen – Coindesk
Options traders are turning their attention to long-term bullish bets on the ether cryptocurrency because some anticipate an ether-based exchange-traded fund (ETF) product will likely follow the launch of the first bitcoin futures-based ETF in the U.S.
Data reveals a growing demand for long-dated, out-of-the-money (OTM) call options on ether – bullish bets with strike prices well above the spot market price of the cryptocurrency.

Derivative Assets Are Opening Up a New World of Investment in DeFi
Julia Magas –
Decentralized finance (DeFi) is one of the most dynamic sectors of the global economy to date and its growing with increased interest in various derivative assets.
According to analytical agency Messari, trading volumes on decentralized exchanges (DEXs) in the second quarter of 2021 have shown a 117 times increase. This is in comparison to the same period last year and 83% growth over the first quarter.


Cboe Global Markets and MSCI Inc. Expand Relationship, Extend Licensing Agreement Through 2031
Cboe, MSCI to collaborate on strategic initiatives and drive future innovation in the capital markets; Enables Cboe to offer options trading on expanded suite of MSCI global indices in the U.S.; Expanded relationship creates framework for collaboration on new products, services and solutions
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, and MSCI Inc., a leading provider of critical decision support tools and services for the global investment community, today announced they have signed a licensing agreement that extends and broadens their strategic relationship.

Cboe moves to build digital asset derivatives marketplace with ErisX acquisition
The acquisition of ErisX gives Cboe access to the digital asset spot and derivatives market, including clearing and settlement.
Annabel Smith – The Trade
Cboe Global Markets has moved to create a digital asset marketplace that reflects traditional markets with its acquisition of US-based digital asset spot market, ErisX Digital Holdings.

Crypto Exchange FTX Reaches $25 Billion Valuation
Investors in new funding round include Ontario Teachers’ Pension Plan and funds managed by BlackRock
Alexander Osipovich –
Cryptocurrency exchange FTX reached a valuation of $25 billion in a new funding round that includes heavyweights from traditional finance, such as the Ontario Teachers’ Pension Plan and funds managed by BlackRock Inc. BLK -0.15%
FTX Trading Ltd., the exchange’s parent company, said Thursday that it had raised just over $420 million in the new round. The news came three months after FTX closed a previous round at a valuation of $18 billion.

Regulation & Enforcement

Whistle-Blower Wins $200 Million in Largest-Ever CFTC Award
Matt Robinson – Bloomberg
Wall Street’s top derivatives regulator gave almost $200 million to a whistle-blower in the largest ever award for information that significantly contributed to an already open investigation.
The unnamed tipster’s information led the Commodity Futures Trading Commission to find direct evidence of wrongdoing, the regulator said in a Thursday statement. The tip also led another U.S. federal regulator and a foreign agency to bring similar allegations. The CFTC issues awards for help in its enforcement actions as well as those brought by other domestic or foreign regulators if certain conditions are met.


In a Frothy Stock Market, This Might Be Your Best Move
Steven M. Sears – Barron’s
It’s one of the market’s greatest legends. Just before the crash of 1929, the stock market was in an epic bull market. Lower Manhattan was filled with shops that let people wager on rising stock prices as if they were betting on dogs, or ponies, or boxing.

This key stock-market indicator has switched to a ‘buy’ signal
Lawrence G. McMillan – MarketWatch
The S&P 500 index broke out above its downtrend line on Oct. 14 and has been exploding to the upside ever since. It has now reached the all-time highs (4545), and the main question is whether it has enough energy left to break on out to new all-time highs.
If not, then the S&P SPX, -0.07% might be in a wide trading range between roughly 4300 on the downside and the all-time highs at 4545 (horizontal blue lines on the accompanying chart). There are several gaps on the SPX chart – all generated this week – and gaps are usually filled. That would argue for the “trading range” scenario.

How To Trade Options On The Russell 2000 When Volatility Is Low
Gavin McMaster – Investor’s Business Daily
Volatility has dropped significantly in the last week, with the VIX once again trading below 16. That is toward the lowest levels that we’ve seen in the last 12 months.
Most of the trades we’ve looked at recently like one on Apple (AAPL) will benefit when implied volatility drops or remains low.
When volatility is low, it’s a good idea to add some trades that will benefit when implied volatility rises.


The Hidden Ways the Ultrarich Pass Wealth to Their Heirs Tax-Free; An inside look at how Nike founder Phil Knight is giving a fortune to his family while avoiding billions in U.S. taxes.
Ben Steverman, Anders Melin and Devon Pendleton – Bloomberg
Sitting in the bleachers by the University of Oregon’s running track, Nike Inc. founder Philip Knight offered the sort of lofty promise many other super rich Americans have made over the past decade. The bulk of his money, he told CBS News that day in 2016, would be given away—eventually. “By the time the lives of my children and their kids run out, I will have given most of it to charity,” he said. What Knight didn’t mention was that, for years, he’d been using a range of legal techniques to ensure his heirs keep control of most of his assets and profit from them in the process, quietly transferring vast piles of money in a textbook example of how the rich avoid taxes.

***** One can only wish one had these problems.~JJL

Turnover spurts in F&O segment due to weekly options expiry
Business Standard
India VIX fell 1.51% to 18.035
The Nifty October 2021 futures were at 18,240.50, a premium of 62.4 points compared with the Nifty’s closing of 18,178.10 in the cash market.
Turnover on the National Stock Exchange’s futures & options (F&O) segment was Rs 147.84 lakh crore compared with Rs 75.08 lakh crore reported in the previous session.

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