May 6, 2013

Lead Stories BOX Offers Jumbo SPY
(Press release via email)
The BOX Options Exchange announced today it received SEC approval to offer Jumbo SPY to its customers. SPDR S&P 500 ETF (SPY) is currently the most widely recognized ETF in the U.S. and tracks one of the most popular indexes in the world, the S&P 500 Index. Jumbo SPY Options are a new options contract overlying 1,000 SPY ETF shares per contract, as compared to 100 shares per contract for standard options. BOX expects to start trading Jumbo SPY on Friday, May 10. The approval order can be found at  http://www.sec.gov/rules/sro/box/2013/34-69511.pdf US exchange shares ignited by Ice-NYSE deal
Anish Puaar, Financial News
Share prices of the five largest US exchanges have climbed almost four times faster than the S&P 500 in the first three months of this year amid speculation of more mergers and acquisitions in the exchange sector.
http://jlne.ws/10erjDj ‘Mini’ Options Right Size for Retail  
Kaitlyn Kiernan, The Wall Street Journal
In a world of supersizing, “mini” options are finding a receptive audience among individual investors.
**But apparently ‘Jumbo’ options are the right size for some people as well (see above story) — SR Missing the Forest for the VIX Trees? 
Adam Warner, Schaeffer’s Investment Research
In our VIX-centric world, we sometimes lose sight of the fact that the CBOE Market Volatility Index (INDEXCBOE:VIX) is a very narrow measure of the wide world of volatility. It is simply a proxy for the implied volatility of a hypothetical 30-day, at-the-money option on the S&P 500 Index (SPX).
http://jlne.ws/15l1me0 Although the VIX had been holding near its 50-day moving average since April 23, it made a significant drop on Friday.
Wall Street Sector Selector
The VIX finished Friday’s trading session at 12.85, closing below its 50-day moving average for the third consecutive day.  It is now significantly below its 50-day MA of 13.78.  Its Relative Strength Index declined from Thursday’s 48.59 to 45.66.  More important the MACD has now resumed its downward trajectory below the signal line, which usually signals a further decline.
http://jlne.ws/15kYUUS Stocks: Testing the record highs
Hibah Yousuf, CNN Money
Investors are wondering how much further the bull market can run after the S&P 500 and the Dow Jones industrial average closed at record highs last week.
http://jlne.ws/15l1XfK Increasing Stock Values Drive Options Trading
Paul A Ebeling Jr, Live Trading News
Increasing stock values helped drive options trade in April, market participants bought options contracts that would pay off in the event of a market decline.
http://jlne.ws/15kYqhH S&P 500 heading to 1,900 this year – Birinyi
Jonathan Ratner, Financial Post
Not only do historical trends point to further upside for U.S. stocks, but apparently so does investor sentiment.
http://jlne.ws/15l2aQ6 What’s Beyond the S&P 500’s Relentless Rally
Giovanny Moreano, CNBC
In a relentless rally, the S&P 500 is up 19.3 percent since mid-November, breaching 1,600 for the first time ever on Friday and settling at a record close of 1,614.42.
http://jlne.ws/15l2f6w Massive Volume In VIX Fund, But Contango Persists  
Richard Bloch, Seeking Alpha
I find it interesting that according to ETF Database, the S&P VIX Short-Term Futures ETN (VXX) ranks as the third most popular exchange traded product by volume, with average volume over the last three months coming in at around 53 million shares per day.
http://jlne.ws/15kYFcC 3 Years Later: Learning to Live With Flash Crashes
Jeff Cox, CNBC
Rather than being simply a one-off event that Wall Street could dismiss as an aberration, the first Flash Crash now looks like it was just the opening warning shot.
http://jlne.ws/18ObAzT A Disappointing Debut
The New York Times
Mary Jo White, the new chairwoman of the Securities and Exchange Commission, has gotten off on the wrong foot. Last week, in her first commission vote, Ms. White led the commissioners in approving a proposal that, if finalized, could leave investors and taxpayers exposed to the ravages of reckless bank trading.
http://jlne.ws/18ObQ1K Taiwanese Bank Extends License with Fenics for FX Options System 
Ivy Schmerken, Advanced Trading
Already a customer for 10 years, E.Sun Commercial Bank will extend its license of Fenics Professional in foreign exchange options to streamline procedures and gain functions such as volatility surface management.
http://jlne.ws/15kZulJ Survey: ‘Hash Crash’ Didn’t Seriously Erode Market Structure Confidence
Matt Egan, FOX Business
Even as a growing number of market participants express concern about market structure, a new survey reveals that two-thirds of market participants believe last month’s “Hash Crash” caused by The Associated Press’s hacked Twitter account had no impact on market structure confidence.
http://jlne.ws/15l1ACa AlphaMetrix Research Seminar: A Look at Volatility
On April 15, 2013, Alphametrix hosted a seminar in London that featured volatility views by several leading practitioners. Hosted by CBOE Futures Exchange managing director James Lubin, the panel focused on the different lenses of volatility, including volatility from an investor’s perspective, the macro environment of volatility, the path of volatility and trading volatility. (Free to view; registration required).


Countering HFT Exclusives, CME-Nasdaq Launch Microwave Connectivity for Market Data 
Ivy Schmerken, Advanced Trading
The new microwave network will deliver market data in less than 4.25 milliseconds between Nasdaq’s data center in Carteret, New Jersey and CME’s facility in Aurora, Ill. in under 4.25 milliseconds.


How To Rescue Your Losing ETF Position With Options
Justin Kuepper , ETF Database
Exchange-traded funds (“ETFs”) are an attractive way for investors to easily gain exposure to specific countries, sectors, industries or asset classes. Just like equities, many ETFs have options that can be bought or sold on them, enabling traders and investors to employ unique strategies to control their positions. In this article, we’ll take a look at one options strategy that can be used to quickly recover from poorly performing ETF investments.

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