Can This Rally Last? Options Traders Say Yes

Jun 26, 2019

Lead Stories

Can This Rally Last? Options Traders Say Yes
Gunjan Banerji – WSJ (SUBSCRIPTION)
As U.S. stocks trade near highs, some options traders are poised for greater gains.
Options activity shows investors have turned to bullish bets that pay out if U.S. stocks ascend, with some focused on contracts that would likely profit if the Group of 20 summit later this week through Saturday shows signs of a trade truce between the U.S. and China.

Capitalab Launches SGX Nikkei 225 Options Compression Services
Capitalab, a division of BGC Brokers LP, an entity within the BGC Partners, Inc. (NASDAQ: BGCP) group of companies, today announced in collaboration with Singapore Exchange (SGX) the launch of its SGX Nikkei 225 options compression service, a multilateral, model agnostic and risk constrained first-of-its-kind for Equity Derivatives.

**** here.

U.S. Rates Volatility Gears Up for Ageing Business Cycle to Turn
Tanvir Sandhu – Bloomberg (SUBSCRIPTION)
A surge in U.S. rates volatility may have legs as traders stare at the prospect of a full easing cycle by the Federal Reserve.
With the life expectancy of the ageing business cycle uncertain, bets on short-term volatility in the rates swaps market would benefit if recessionary forces take hold to drive the Fed on a path to steep rate cuts. However, if policy makers can convince the market to remain patient after one cut and the macro-economic backdrop supports that case, then strategies betting on a pull back in volatility would perform well.

In World’s Longest Trading Day, Everyone Waits for the Close
Justina Lee – Bloomberg (SUBSCRIPTION)
At 8 1/2 hours, Europe has the world’s longest trading day. But only after it ends do markets come alive.
In the five minutes after trading finishes at 4:30 p.m. in London, auctions across the continent set the closing prices tracked by billions of dollars. Over the past three years, the percentage of total trading volume executed in this manner has swelled to 20% from 12%, compared with about 8% in the U.S., according to Rosenblatt Securities.

OptionMetrics Celebrates 20th Anniversary as Leading Options Data Provider
OptionMetrics, an options database and analytics provider for international institutional investors and academic researchers, celebrates its 20th anniversary this month.

City rallies behind much-loved derivatives broker with months to live
Sarah Butcher – efinancialcareers
The City of London is coming out in support of a 52 year-old derivatives broker recently diagnosed with a degenerative disease.

Yuan eases to 1-week low, implied volatility for options at 6-week high
Reuters via Nasdaq
China’s yuan slipped to its lowest level in a week against the dollar on Wednesday, pressured by seasonal corporate demand for the greenback, while many traders stayed on the sidelines ahead of the summit of the Chinese and United States presidents.

Regulation & Enforcement

Data Availability Prompts Rule 606 Delay
John D’Antona – Markets Media
Discretion is often the better part of valor. And in a move put forth by the Securities and Exchange Commission and heartily accepted by Wall Street’s myriad broker-dealers, the SEC recently opted to delay implementation of the new Rule 606 regime from a May 20, 2019 compliance date to October 1, 2019. In its wisdom, the regulator responded to comments that additional clarity and guidance was required to promote the consistent implementation of the rule.

****SD: “The big concern is that we still don’t have the SEC’s FAQs. So, we still have questions that can substantially affect the outcome.” -Mark Davies of S3 in the piece. More on the FAQ issue from Baird Head of Trading Jack Miller: “…vendors and brokers are put in the position of making a ‘best guess’ and brokers in particular – who ultimately bear responsibility for compliance – would lack a regulatory mandate to demand certain data or services from vendors or downstream partners. In my view, industry readiness – and the feasibility of the new October date – depends a lot on the content of the FAQs, including guidance around areas such as the ‘look through’ provision and what should be considered valid ‘venues’ under the rule. If FINRA were to land on a more detailed interpretation of the rule the implementation date could prove challenging even with the delay given many brokers may not have all the data necessary to provide a full report.”

Banks in Britain revive preparations for no-deal Brexit: EY
Huw Jones – Reuters
Banks in Britain are showing signs of restarting preparations for a no-deal Brexit after a lull in the shift of financial services jobs and capital from Britain to the European Union in the past few months, consultants EY said on Wednesday.


dxFeed Launches the First White Label Ready Market Screener for Options
Business Wire
dxFeed, a leading provider of market data analytics and services for the global financial industry, extends dxFeed Radar, a white-label ready market screener for B2B clients, with options analytics. dxFeed Radar is an advanced market screener empowered with fundamentals, technical analysis, analytical data points and a library of advanced custom functions that scans on-demand the whole universe of US stocks, indices, ETFs and now options.


Societe Generale Announces Co-Heads of Equities and Equity Derivatives Americas
James Masserio and Salim Nemouchi are appointed Co-Heads of Equities and Equity Derivatives Americas, effective Q3 2019. As Co-Heads, they will directly oversee all equities and derivatives trading and sales activities in the Americas. They replace Hatem Mustapha, who was recently appointed Head of Global Markets for the Americas, effective Q3 2019.


Use Volatility to Your Benefit – Hodges (Radio)
Bloomberg (AUDIO)
Craig Hodges, Chairman/CEO/CIO, Hodges Capital Management, joined Rishaad Salamat and Bryan Curtis on Daybreak Asia. He explains why investors should keep watch on the underlying fundamentals and goes on to some of the most interesting stocks he sees at the moment.


Join Barron’s Live for ‘ETFs in Focus’ — Part 4
How are advisors navigating a volatile market for their clients invested in ETFs? Join Beverly Goodman, Barron’s Investing Managing Editor, and Jack Otter, Barron’s Associate Publisher, Wealth & Asset Management, at 1:00 P.M. on July 10, 2019 for ETFs in Focus: ETFs and Volatility, a live call that will explore approaches that protect against and take advantage of market volatility. Participants can submit their questions to our experts and engage in a real-time conversation.
– Beverly Goodman, Managing Editor, Investing, Barron’s
– Sterling Shea, Global Head, Wealth & Asset Management, Barron’s Group
– Jack Otter, Associate Publisher, Wealth & Asset Management Barron’s Group

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