JLN Options: brokersXpress not an option for Schwab

May 21, 2012

Lead Stories

brokersXpress not an option for Schwab
By Bruce Kelly, Investment News
Some 325 brokers and registered investment advisers are hustling to find new homes in the wake of The Charles Schwab Corp.’s announcement last week that it is closing down brokersXpress LLC, an independent broker-dealer for representatives and financial advisers who trade options.
“This was not a cost-cutting effort,” said Schwab spokeswoman Susan Forman. “It was more of a philosophical decision.”
The company will focus on fee-based registered investment advisers who use its custodian group, Schwab Advisor Services, rather than on brokers who charge a commission for trades, Ms. Forman said.
Hedge Funds Rebuild Euro Bear Bets on Greece
By Liz Capo McCormick and Lukanyo Mnyanda, BusinessWeek
The euro has weathered the worst financial crisis since the Great Depression, bailouts of Greece, Ireland and Portugal, and falling interest rates. Now, investors are betting like never before that a Greek exit would be too much to keep the 17-nation currency above its long-term average.
Hedge funds and other large speculators, which pared trades that would profit from a drop in the euro to the lowest levels since November, rebuilt them to a record high last week, figures released May 18 by the Washington-based Commodity Futures Trading Commission showed. The premium for options that grant the right to sell the euro has more than doubled since March.
CBOE to start listing Facebook option contracts this month
By Chad Terhune, Los Angeles Times
Facebook shares fell flat on their Nasdaq debut, but another trading venue for the stock will open later this month.
The Chicago Board Options Exchange will start listing option contracts on the Menlo Park company May 29, according to specialist firm Susquehanna Investment Group. This is sooner than normal for a company going public. The exchange typically waits a month or more before offering these options, but investor interest in the social media giant accelerated that timetable.
Nasdaq: Another Big Facebook Loser
By STEVEN M. SEARS, Barron’s
The Nasdaq Stock Market’s failure to launch Facebook’s initial public offering smoothly is the worst electronic trading failure since the May 2010 flash crash and is raising the ire of investors who feel sandbagged by the social-network’s hyped IPO…
Investors have reacted by increasing bearish options bets against Nasdaq, essentially betting Friday’s 4% stock decline will push the $22 stock below its 52-week low of $20.32.

Should You Trade Facebook Options? Not On Day One
by Richard Bloch, Seeking Alpha
…Well maybe it was next to impossible for investors to get in at the initial offering price, but Facebook was only 23 cents higher than the IPO price of $38 by day’s end.
So investors may not need to “wade into stock options” at all. But if you’re thinking of dipping your toe in the water, it’s worth taking a look at how some other IPO options began their trading lives.


Semi-Annual Changes to the NASDAQ OMX CRD Global Sustainability Index
Press Release
The NASDAQ OMX Group, Inc. NDAQ +2.91% and CRD Analytics announced today the results of the semi-annual re-ranking of the NASDAQ OMX CRD Global Sustainability Index , which will become effective prior to market open on Monday, May 21, 2012.
The following two securities will be added to the Index: Bank of America Corporation BAC -2.42% and TELUS Corporation TU +0.27% .
The NASDAQ OMX CRD Global Sustainability Index is an equally weighted equity index that serves as a benchmark for stocks of companies that are taking a leadership role in sustainability performance reporting
and are traded on a major US stock exchange.

Options on FuturesBy Dan Murtaugh, Bloomberg
Crude-oil options volatility fell as the underlying futures rebounded after hitting a six-month low last week as the Seaway pipeline began carrying cheap oil to the Gulf of Mexico.
Implied volatility for at-the-money options expiring in July, a measure of expected price swings in futures and a gauge of options prices, was 27.6 percent at 12:50 p.m. on the New York Mercantile Exchange, down from 29.6 percent May 18.
Crude oil for June delivery rose 79 cents, or 0.9 percent, to $92.27 a barrel on the Nymex at 12:55 p.m.http://jlne.ws/JzFiBb


SIFMA Looks at Segregation of Market Maker Desks
by Peter Chapman, Traders Magazine
Should a firm’s options market makers be allowed to work together with its stock market makers?
Options exchange rules explicitly bar the sharing of information between a brokerage firm’s options and stock market-making units, but some executives question whether the rules are outdated.
Recently, the options committee of the Securities Industry and Financial Markets Association took up the issue. “In some cases, the information barriers that separate equities and options market makers are appropriate,” Jim Boyle, head of the SIFMA options committee and a UBS executive, told the crowd at this year’s Options Industry Conference. “But in other cases, these two businesses are actually complementary and operate as one. We’re going to take a look at that.” 

Senator Suggests CFTC Chief Should Be Fired
By Damian Paletta, The Wall Street Journal
Sen. Jon Tester, the Montana Democrat, has raised the prospect that Commodity Futures Trading Commission Chairman Gary Gensler should be fired over his handling of the recent scandal and October bankruptcy at MF Global Holdings Ltd.
CFTC played a large role in regulating MF Global, which had a broker dealer division. Investigators are now probing whether the company improperly transferred customer funds to a separate division to cover losses tied to bad bets on European debt.

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