LEAD STORIES
CBOE Futures Exchange Hit With Data Glitch 
Kaitlyn Kiernan and Jacob Bunge – The Wall Street Journal
CBOE Holdings Inc., operator of the largest U.S. options exchange by trading volume, alerted traders to problems with some market-data services early Tuesday, according to notices on the exchange operator’s website.
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**I commented yesterday that such stories were becoming so common they almost aren’t news anymore, but it was meant to be a joke. -JB Exclusive – Nasdaq, NYSE at odds on outage cause as SEC seeks facts
John McCrank and Angela Moon – Reuters
U.S. regulators have asked Nasdaq OMX Group and NYSE Euronext to come up with a timeline of Thursday’s three-hour trading disruption, but the rival exchange operators have been unable to agree on the details, according to several sources familiar with the situation on Monday.
http://jlne.ws/19XdZOR More pain ahead for battered emerging currencies, options show
Anirban Nag and Sujata Rao – Reuters
Emerging market currencies such as the Indian rupee and the Turkish lira have plunged to record lows against the dollar and trends in the derivatives market indicate little respite ahead.
http://jlne.ws/19Xf7Ss Goldman losses from options glitch in tens of millions -source
Doris Frankel and Lauren Tara LaCapra – Reuters
Goldman Sachs Group Inc (GS.N) lost tens of millions of dollars after a computer glitch led to a flood of erroneous options trades last week, a source close to the matter said on Monday.
http://jlne.ws/19Xdu7n
**Chump change for them (which is not to say they do not care…I bet they do). -JB Nasdaq trading halt exposes communication gaps when crisis hits
Herbert Lash – Reuters
The three-hour trading halt last week in Nasdaq stocks has raised questions about the exchange’s communications effort and whether procedures need to be established to keep the investing public informed when mishaps occur.
http://jlne.ws/19XcO1W
**I’ve got some Dixie cups and some string I can lend them (that probably dates me more than I would like to admit). -JB Videocast: No panic in the VIX pits
optionMONSTER
http://jlne.ws/19XfUTx FIA study suggests algos and HFT do not affect price volatility
Automated Trader
The Futures Industry Association released a study which it said suggested algorithms and high-frequency trading did not appear to affect price volatility at a structural level.
http://jlne.ws/19XfKvi Two charged with stealing source code from NY trading firm
Joseph Ax – Reuters
Two men have been charged by New York prosecutors with stealing secret computer code from a high-frequency trading firm in an effort to start their own business.
http://jlne.ws/19Xdbtf EXCHANGES
TMX Group launches Canadian implied volatility and Greeks analytics feed
Press Release (TMX)
TMX Group today announced the launch of a new analytics feed for options traded on Montréal Exchange Inc. (MX), a wholly-owned subsidiary of TMX Group Limited and Canada’s derivatives exchange. TMX Datalinx, the information services division of TMX Group, will make the new feed available to the options trading community through the TMX Atrium global network and other content distributors.
http://jlne.ws/19XeYP2 Is BATS-Direct Edge the next owner of the NYSE?
Bob Pisani – CNBC
The BATS/Direct Edge merger may seem like a merger between two sleepy stock exchanges, but in one fell swoop the combined entity has become a potentially bigger story: it is one of the only logical buyers for the cash equity business of NYSE Euronext.
http://jlne.ws/19XbUT1 Merger of Bats Global Markets, Direct Edge Holdings could challenge Wall Street mainstays
Mark Davis – The Kansas City Star
Bats Global Markets Inc., already the third-largest U.S. stock exchange, is merging with the No. 4 player in the industry, Direct Edge Holdings LLC of Jersey City, N.J.
Combined, these electronic stock markets would be second in size only to the NYSE as the computerized trading world has supplanted the old familiar trading floors full of yelling market specialists and traders.
http://jlne.ws/19XdoNf ISE Gemini is the Fastest New Exchange to Surpass Two Percent Market Share
Press Release (ISE)
The International Securities Exchange (ISE) announced that ISE Gemini surpassed two percent market share yesterday in equity options, the fastest exchange to reach that milestone since ISE introduced electronic trading to the options market in 2000. ISE Gemini also successfully concluded its product listing plan on an accelerated basis, less than a month after launching on August 5.
http://jlne.ws/19XdCUm REGULATION & ENFORCEMENT
U.S. SEC to meet heads of exchanges Sept. 12 over Nasdaq glitch
Douwe Miedema – Reuters
The Securities and Exchange Commission will meet with heads of exchanges on Sept. 12 to discuss last week’s trading glitch with Nasdaq-listed stocks, the top U.S. securities regulator said on Tuesday.
http://jlne.ws/19XbFaz Post-trade outage drives pre-trade regulation
The Trade USA
For the first time in the modern era, issues related to the post-trade formation and dissemination of a consolidated quote brought trading in Nasdaq-listed stocks and equity options based on those stocks to a halt for approximately three hours on 22 August.
http://jlne.ws/19Xbs7c OTC Derivatives Rules’ Benefits Outweigh Costs, Basel Group Says
Jim Brunsden – Bloomberg
Tougher rules for trading in over-the-counter derivatives will deliver economic benefits that outweigh the costs they impose on banks, a study found.
http://jlne.ws/17hdcEw Leap Wireless options trades spark investigation
Kevin McCoy – USA Today
Options trades in telecom firm Leap Wireless International are under investigation after a prominent market maker complained about “suspicious” activity shortly before last month’s announcement of a takeover deal.
http://jlne.ws/19XgtNc OPTIONS EDUCATION
CITI: The VIX Is Wildly Misunderstood And Misinterpreted
Sam Ro – Business Insider
Over time, the VIX has become known as the “fear index” or “fear gauge.” When the VIX is high, fear is thought to be high. And when it’s low, complacency is thought to be high.
Traditionally, fear and complacency are contrarian indicators, which help traders and investors predict short-term moves in the market.
Unfortunately, the the empirical evidence on this is anything but clear.
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