LEAD STORIES

CBOE Holdings Halts Trading at Two of Its Exchanges 
Kaitlyn Kiernan and Jacob Bunge – The Wall Street Journal
Stock and options exchanges run by CBOE Holdings Inc. (CBOE) morning suffered technology problems Friday morning that led the exchange operator to halt trading on two of its marketplaces.
C2, the electronic options market run by the Chicago Board Options Exchange parent, and the CBOE Stock Exchange were affected by the issues, according to electronic notices sent by customers.
http://jlne.ws/1dbuBjF
**It’s Friday the 13th.  We should’ve seen this coming.  -JB

Market Disruption Seen Sign of Times After Nasdaq Mishap
Lu Wang – Bloomberg
Disruptions such as last month’s three-hour shutdown by the Nasdaq Stock Market will never be completely preventable and U.S. regulators shouldn’t make perfection their goal, according to a Bloomberg Global Poll.
http://jlne.ws/1dbuUuQ
**Nothing is ever perfect but that does not mean you shouldn’t strive for perfection.  Being willing to accept some amount of breakdowns is a poor policy. Of course they will happen but you should never be ok with that. -JB

SEC Orders Exchanges to Collaborate on Bolstering Markets
Joshua Gallu & Sam Mamudi – Bloomberg
U.S. securities regulators told stock exchanges to collaborate on making markets more resilient, an attempt to prevent another disruption like Nasdaq OMX Group Inc.’s three-hour halt last month.
http://jlne.ws/1dbx51B

How to Fix the Stock Market’s Tech Problem
Steve Rosenbush – The Wall Street Journal
For all intents and purposes, the highly fragmented U.S. stock market has only one central point of failure. But it’s a big one.
The centralized data feeds—such as the one that failed last month, halting trading in thousands of stocks for nearly half a session—need better protocols and a greater ability to discern the context of message traffic among exchanges, according to one market expert.
http://jlne.ws/1eMiICA

NYC Reps Interested in Rate Volatility; VXTN up 83% Since April
Matt Moran – CBOE
This week CBOE representatives had several meetings in New York City with representatives of several large financial services firms. Firm representatives told CBOE that many of their clients have expressed increased interest in interest rate volatility over the past few months.  CBOE now offers two volatility indexes related to interest rate volatility.
http://jlne.ws/1eMmiwA

Videocast: Cheap bet on VIX spike
optionMONSTER
http://jlne.ws/1eMmqfn

Derivatives Would Face Transaction Fees Under Obama Proposal
Silla Brush – Bloomberg
Derivatives would face new transaction fees to pay for the U.S. Commodity Futures Trading Commission budget under a proposal President Barack Obama’s administration submitted to Congress.
http://jlne.ws/14LYTJS

Embattled J.P. Morgan Bulks Up Oversight 
Monica Langley and Dan Fitzpatrick – The Wall Street Journal
J.P. Morgan Chase & Co., facing a host Nasdaq OMX, of regulatory and legal woes, plans to spend an additional $4 billion and commit 5,000 extra employees this year to clean up its risk and compliance problems, according to people close to the bank.
http://jlne.ws/1eMg6EP

EXCHANGES

CME Europe delay suggests tighter scrutiny of new venues
The Trade
Last week’s launch delay for impending listed derivatives exchange CME Europe comes months after similar delays to a derivatives venue operated by Nasdaq OMX and is evidence of greater regulatory oversight of new venues, rather than potential flaws, a market structure expert has warned.
http://jlne.ws/1dbxSPW

Nasdaq CEO Greifeld Maintains Board Support
Jacob Bunge – The Wall Street Journal
Nasdaq OMX Group Inc.’s board of directors still backs Chief Executive Robert Greifeld, despite the most recent technology problem afflicting the exchange group, according to people with knowledge of the board’s thinking.
http://jlne.ws/1eMj2RR

FT: CME Group Spends More Money on Lobbying than Rivals
The Options Insider
According to Federal lobbying records, CME has spent a greater amount of money for Washington lobbying so far this year and has visited the Commodities Futures Trading Commission (CFTC) more in the last six years than its rivals.
http://jlne.ws/1eMk54g

Nasdaq OMX awaits regulatory approval for FX clearing
Miriam Siers – FX-Week
The exchange’s Nordic central counterparty has connected to MarkitServ and is awaiting the green light from regulators to clear G-10 and EM non-deliverable forwards and options.
http://jlne.ws/1eMkyDz

REGULATION & ENFORCEMENT

The CFTC Is Beating the SEC on Speed-Trading Rules
Matthew Philips – BloombergBusinessweek
After the Flash Crash on May 6, 2010, the government’s primary market regulators, the Securities and Exchange Commission and the Commodity Futures Trading Commission, acted together and issued a joint report (pdf) dissecting how computer-driven trading caused stocks on the Dow Jones to plunge 9 percent in 20 minutes, temporarily vaporizing almost $1 trillion in market value.
http://jlne.ws/1eMlCaB

OPTIONS EDUCATION

Correlation Devastation
Adam Warner – Schaeffer’s Investment Research
Correlation is a hugely important concept as it pertains to options. Index option volatility has two drivers: the volatility of each individual name, and the degree to which the names themselves correlate. The greater they correlate, the greater the volatility.
http://jlne.ws/1eMlpUD

EVENTS

“All-Stars of Options Trading” Conference Hits Chicago
Jim Bittman – CBOE
I am excited to be presenting at the “All-Stars of Options Trading” conference on October 3 – 5 in Chicago at The Hyatt Regency McCormick Place and Chicago Board Options Exchange.  Other noteworthy presenters at this event include Larry McMillan, Dan Gramza, Tom Sosnoff, JJ Kinahan, Dan Sheridan and many more.
http://jlne.ws/1dbvatR
**They have an intermediate and an advanced track.  JB

Pin It on Pinterest

Share This Story