LEAD STORIES

CBOE bars regulatory staff from receiving stock-based pay
Ann Saphir and Tom Polansek – Reuters
The Chicago Board Options Exchange, which paid a $6 million fine in June for failing to properly oversee its own marketplace, has barred regulatory staff from receiving compensation tied to the company’s soaring stock price.
http://jlne.ws/19Qve3q

The Summer Doldrums Take Hold
Tyler Craig – InvestorPlace
Now that earnings season has passed and the oppressive heat of August is in full force, talk of the summer doldrums has descended upon Wall Street.
Some will tell you summer is where volume and volatility go to die.
Some would be right.
http://jlne.ws/15SfXNP

Option trader bets on jump in volatility ahead of September Fed meeting
Michael Fowlkes
Volatility has been low so far this year as the S&P; 500 has repeatedly set new records. At least one option trader seems to think things are about to change and made a big bet to that effect yesterday.
http://jlne.ws/16xR4Ua

Hedge funds make a comeback buoyed by US market… HFR indices reflect a positive July…
HedgeWeek
The possibility that hedge funds are making a comeback has been explored in the media recently, suggesting that investors are once again hungry for the huge returns these funds offered a decade ago, as their companies return to profitability.
http://jlne.ws/16xNppt

Is 2013 Headed for a 1987 Crash?
Minyanville (via NASDAQ)
One common theme I keep hearing is that 2013 looks a lot like 1987 and is due for a 1987 style crash. Well, I don’t agree — and here’s why.
http://jlne.ws/16xOnSz
**Options are (in their opinion) the difference here. -JB

More strategists join the growing ‘1700 Club’
Adam Shell – USA Today
Gaining membership to Wall Street’s “1700 Club” takes more than having a big bank account and good references. What it takes is a year-end target on the S&P; 500 north of 1700.
http://jlne.ws/149J2hl

Outages at BATS and Direct Edge: Are Technical Mishaps the New Normal? 
Ivy Schmerken – Wall Street & Technology
While systems issues at BATS and Direct Edge briefly interrupted trading, it shows that electronic exchanges can quickly shift orders to rival exchanges.
http://jlne.ws/16C5jZY

Computer Trading in Bonds Won’t Match Stock Level, McKinsey Says
Matthew Leising – Bloomberg
The corporate bond market is unsuitable for full electronic trading, according to a study by McKinsey & Co. and Greenwich Associates, even as Goldman Sachs Group Inc. (GS) and BlackRock Inc. (BLK) expand their own systems.
http://jlne.ws/16C5k00

EXCHANGES

NYSE Euronext’s Duncan Niederauer on Botched IPOs, Lost Trading Volume
Matthew Philips – BloombergBusinessweek
You’re being bought by IntercontinentalExchange (ICE). How does a 13-year-old futures exchange make a play for a 220-year-old American institution?
http://jlne.ws/19QuI5w

ICE-NYSE unexpected merger success 
Jane Searle – The Deal Pipeline
The NYSE Euronext merger with IntercontinentalExchange Inc., popularly known as ICE, is progressing faster than expected, convincing skeptics on the merits of a marriage for the staid NYSE as its traditional business erodes and its shares remain below precrisis levels.
http://jlne.ws/15SgWxt

As Yield Curves Move, CME Group Sees Trading Volumes Rise
Zacks (via Forbes)
Looking for another way to play rising interest rates besides buying banks? How about the world’s largest futures exchange which handles over $3 trillion worth of interest rate derivatives contracts every day.
http://jlne.ws/19QrrDg

REGULATION

DERIVATIVES: Regulators force CME surveillance improvement
IFR
The regulator was concerned about the low number of investigations CME launched regarding transactions known as “exchange for related positions” in which over-the-counter swaps or physical positions in an underlying are exchanged for listed futures or options.
http://jlne.ws/15ShP9a

OPTIONS EDUCATION

Dispelling The Myths On Binary Options
Nick Mastrandrea – Trader Planet
At first glance you may have the urge to run as binary options in general aren’t known to have a stellar reputation. Unfortunately there’s been quite a bit of misconception and misinformation concerning binaries.
http://jlne.ws/19Qtmrq

How investors can use implied volatility to gauge mkt mood
Siddharth Bhamre – Moneycontrol.com
Going by the broader market perspective, the definition of high IV and low IV changes depending upon the market scenario.
http://jlne.ws/19QuYkZ

STRATEGY

How To Reduce Your Risk With Leveraged ETFs Using Options
Justin Kuepper – ETF Database
Leveraged ETFs have become very popular among active traders looking to increase their exposure to a given index without buying on margin. While the SEC has warned of their risk on multiple occasions, many traders continue to utilize these ETFs without taking into account all of the associated risks.
http://jlne.ws/19Qqxqo

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