Britain’s IG Group to Buy U.S. Options Firm Tastytrade For $1 Billion; U.S. Options Setup May Signal Risks for Stocks, Tallbacken Says

Jan 21, 2021

$26,351/$300,000 (8.8%)

Observations & Insight

Why Do You Hire a Super Salesman to Run Trading Technologies?
Tim Geannopulos replaces Rick Lane as Chairman and CEO of TT
John Lothian – John Lothian News

Rick Lane is out at Trading Technologies as CEO and chairman, but still with the company in a non-titled supporting role for the time being, at a time when the company is rumored to be in the midst of a sale.

Tim Geannopulos, the former global head of sales at Trading Technologies and a major TT shareholder, is in as the new CEO and chairman, returning to the company after a stint as a consultant and start-up investor and fintech executive.

So why is this change occurring at a time when the company is reportedly for sale? There is not an easy answer, but my question in the title gives part of the answer, I think.

To read the rest of this commentary, go here.

Lead Stories

Britain’s IG Group to Buy U.S. Options Firm Tastytrade For $1 Billion
Alexander Osipovich – WSJ
IG Group Holdings PLC, a U.K.-based operator of online trading platforms, has agreed to buy U.S. brokerage and financial-media firm Tastytrade Inc. for $1 billion in a bid to capitalize on the boom in options trading by small investors.
The deal, which the companies unveiled Thursday, would substantially increase IG’s presence in the U.S. market. The company is best known for offering derivatives products that let individual investors overseas bet on whether stocks, foreign-exchange rates, gold or cryptocurrencies will rise or fall.
/on.wsj.com/3o5U5by

*****JB: More stories on this topic: Financial Times IG expands in US with $1bn tastytrade acquisition, Bloomberg IG’s $1 Billion Bet on Tastytrade Seen as Pricey; Shares Fall and Reuters Britain’s IG to buy tastytrade for $1 billion in U.S. foray.

U.S. Options Setup May Signal Risks for Stocks, Tallbacken Says
Joanna Ossinger – Bloomberg
A lack of demand for bearish options on the U.S. stock market signals potentially troubling investor complacency amid a record-breaking equity rally, according to Tallbacken Capital Advisors LLC.
Total open interest in put options on the S&P 500 index is around a four-year low, according to data compiled by Bloomberg. Options premiums are also “expensive,” possibly contributing to a further drop in open interest, Tallbacken Chief Executive Officer Michael Purves wrote in a note.
/bloom.bg/3c653fb

Bitcoin Option Traders Hedge Against Downside Risk as Price Dips to Near $32K
Omkar Godbole – Coindesk
Amid another price downturn Thursday, bitcoin options traders appear to be becoming less bullish on the immediate prospects for the cryptocurrency. The one-week put-call skew, which measures the spread between prices of short-term puts and calls, has risen to a five-week high of 14%. The skew had bottomed out near an extremely bullish -33% just a week ago, according to data source Skew.
bit.ly/363iqZs

Derivatives Trading Fled Europe for New York After Brexit
Silla Brush and Viren Vaghela – Bloomberg
The U.S. won the first round of attracting derivatives trading after Brexit disrupted European markets, according to IHS Markit.
Euro-denominated interest rate trading rose on U.S. swap execution facilities in the first two weeks of January to 23% market share, from 11% in December, the IHS data published Thursday showed. European platforms’ share declined to 35% from 42% in the same period.
/bloom.bg/3p0AKtP

Global futures and options trading reaches record level in 2020
FIA.org
Washington, DC—FIA today released yearly statistics that show the total number of futures and options traded on exchanges worldwide reached a record level of 46.77 billion contracts in 2020, up 35.6% from 2019. Total futures trading rose 32.7% to 25.55 billion. Total options trading rose 39.3% to 21.22 billion. Open interest, which measures the number of outstanding contracts at a point in time, also reached a record high, reaching 987.3 million contracts at year-end, up 9.7% from December 2019.
bit.ly/3qEnKuj

Exchanges and Clearing

HKEX to Launch Mini USD/CNH Futures
HKEX
Mini USD/CNH Futures to launch in the first half of 2021, with contract size of US$20,000;Developed in response to market demand from smaller corporates and individuals, allowing for more precise risk management;Complements existing HKEX RMB currency products, such as USD/CNH Futures and USD/CNH Options
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce the launch of a cash-settled Mini USD/CNH (US dollar/Offshore Renminbi, or RMB) Futures contract — a smaller-sized contract to complement the popular USD/CNH derivatives products, further diversifying HKEX’s suite of currency derivatives to support the risk-management needs of global investors.
/bit.ly/3pbnX88

Nasdaq Saw Strong Growth In Norwegian Derivatives In 2020
Mondovisione
Nasdaq (Nasdaq: NDAQ) today announced year-end figures for its Norwegian derivatives offering. In 2020, market share in Nasdaq´s single stock options continued to lead the market, with an 88 percent share of open interest and 78 percent share of traded volumes at the end of the year. Over the last two years, the market share for single stock options has increased from 16 percent to 88 percent.
/bit.ly/2XZMpgv

Strategy

Short-seller Jim Chanos transitioned his Tesla short position into put options to limit his downside
Matthew Fox – Markets Insider
Famed short-seller Jim Chanos of Kynikos Associates remains short Tesla, but via put options rather than directly short-selling the stock.
In an interview with CNBC on Wednesday, Chanos said of his firm’s Tesla position, “We transformed our stock position into a put position.”
/bit.ly/39QimNP

Education

Fundamentals of Futures & Options Virtual Course
IFM.org
For more than 30 years, IFM has consistently provided learners with a solid foundation and understanding of futures and options markets and trading including terminology, risk management, pricing, and basic trade strategies.
This instructor-led virtual course includes lecture from an engaging instructor with real-world expertise and supported by class discussion, practice exercises and educational materials. The course fee includes two must-read industry books – Futures and Options and the Guide to U.S. Futures Regulation.
Presenter: Marti Tirinnanzi, Board of Director of ICE Mortgage Services
Time: January 25-29, 12:00 – 2:00 p.m. ET; 2 hours per day for five consecutive days
bit.ly/39PurD7

Events

2020 Annual Trends in Futures and Options Trading
FIA.org
Description: This webinar will highlight the main trends in trading activity in 2020 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings.
Presenter: Will Acworth, Senior Vice President of Publications, Data & Research, FIA
Time: Jan 27, 2021 10:30 AM in Eastern Time (US and Canada)
/bit.ly/35iLcoJ

The SEC’s new derivatives rule: practical implications for funds
FIA.org
The SEC recently adopted Rule 18f-4 under the 1940 Act, which will establish a comprehensive framework for the use of derivatives transactions by registered funds. The rule will replace SEC guidance and staff no-action letters that together have governed the use of derivatives by registered funds for over 40 years with an expansive regulatory framework. Funds will not need to come into compliance with the rule until the summer of 2022, but most fund families will need to devote significant time and resources to prepare for the new regulatory framework in advance of the compliance date.
Presenters: Kenneth Holston, Partner, K&L Gates; Stephen Humenik, Partner, K&L Gates; Michael McGrath, Partner, K&L Gates; Fatima Sulaiman, Partner, K&L Gates
Time: Thursday, 25 February 2021 | 10:00 a.m. – 11:00 a.m. EST
bit.ly/2Nq8YZT

Miscellaneous

(Podcast) OPR 348: Time for an SPX Super Fly
Options Playbook – Options Insider Network
bit.ly/2LWcb2K

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