JLN Options: CBOE Market-Regulation Head Departs During SEC Inquiry

Mar 20, 2012

Lead Stories

CBOE Market-Regulation Head Departs During SEC Inquiry
By Jacob Bunge Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–The head of the Chicago Board Options Exchange’s market-regulation department has left the company, the second compliance official to depart the CBOE during a regulatory investigation into its market-oversight functions. Linda Gerdes was dismissed this month from her post at the CBOE after five years leading its market-regulation department and about 23 years at the exchange. Previously, she designed technology systems to help the CBOE catch manipulative trading activities and worked with Securities & Exchange Commission officials on market surveillance. Monday, Gerdes confirmed her dismissal from CBOE but declined to provide further comment. Representatives for CBOE and the SEC declined to comment.
Chicago parent company CBOE Holdings Inc. (CBOE) in late February disclosed a Securities & Exchange Commission probe into the exchange company’s supervision of trading firms. Last week, the company said Patrick Fay, its head of member and regulatory services, had resigned.
http://jlne.ws/GAZjpF

New Study Evaluates BXM and Other Indexes: Returns, Standard Deviations and Risk-Adjusted Returns Since Mid-1986Press Release
CHICAGO, March 20, 2012 /PRNewswire/ — A new study, “The CBOE S&P 500 BuyWrite Index (BXM) – A Review of Performance,” was released last week by investment-advisory firm Hewitt EnnisKnupp.
The study, commissioned by Chicago Board Options Exchange (CBOE), compares the performance of “traditional” indexes and CBOE S&P 500 BuyWrite Index (BXM(SM)) since mid-1986.
http://jlne.ws/GB8Idu

Bracing For BATS IPO This Week (BATS, NYX, NDAQ, CBOE)247WallSt.com
Posted: March 20, 2012
A new exchange is coming to the world of public stock and financial market exchanges this week. The initial public offering for BATS Global Markets is going to be highly watched because it is an alternative exchange to NYSE Euronext, Inc. (NYSE: NYX) and to The NASDAQ OMX Group, Inc. (NASDAQ: NDAQ). Barron’s reported this last weekend that it was to be a promising deal and traders seem warm to the name so far. The exchange also competes with CBOE Holdings, Inc. (NASDAQ: CBOE) in the world of options trading.
http://jlne.ws/GBGQnY

Technology

OptionsCity Software Releases Next Generation of Electronic Trading Software
CHICAGO, March 20, 2012 /PRNewswire via COMTEX/ — OptionsCity Software today announced the release of Freeway 1.1 and Metro 3.1, the next generations of its end-to-end electronic trading solutions. High performance and progressive functionality are benchmarks of both releases. Freeway 1.1 is the supercharged version of the multi-asset algorithmic trading platform released last September by OptionsCity. Major performance tuning was completed with Freeway 1.1, breaking the 100 micro-second barrier for round-trip execution. This was achieved by a combination of low level system adjustments and reconfiguration of the code base to take maximum advantage of system resources.
http://jlne.ws/GBBm1a

Options IT Names Former HSBC Director as Buy-Side Sales Director for North America NEW YORK, Mar 20, 2012 (BUSINESS WIRE) — Options IT, provider of the Options PIPE Private Financial Cloud services platform for the exchange, banking, trading and investment communities, today announced that industry veteran Callum Runcie has been appointed as the firm’s Buy-Side Sales Director for North America.
Prior to joining Options IT, Mr. Runcie was Sales Director for the Alternatives Business at HSBC Securities Services. In that role he was responsible for sales and client relationships with the firm’s hedge fund clients. Before joining HSBC, he held senior-level sales roles at both Sophis and Sungard. Prior to joining Sungard in 2005, Mr. Runcie spent more than four years as a trader at Starmark Trading Ltd.
In his new role, Mr. Runcie will oversee North American sales of Options PIPE Private Financial Cloud services to buy-side clients.
http://jlne.ws/GELZfT

Strategy

Options Can Sqeeze Yield From Apple Ahead Of Dividend WSJ.com
–Apple announces dividend and stock buyback plan
–Apple’s options prices trading at four-month high
–Strategists suggest selling rich Apple options to collect immediate yield
By Chris Dieterich and Kaitlyn Kiernan OF DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Apple Inc. (APPL) unveiled plans to return cash to investors Monday, and while shareholders won’t see the dividend payments for months, options traders can wring yield from Apple’s rich prices now. Apple’s breathtaking stock run-up combined with relatively rich Apple options prices has prompted options strategists to recommend one of the market’s most widely implemented strategies: selling “covered calls.”
The strategy is set up when shareholders sell call options with a “strike” price that is higher than where the stock is trading, allowing to the trader to pocket a premium from the options sale.
http://jlne.ws/GCPJ6H
A Cheap Way to Play Rotation Into Stocks
By STEVEN M. SEARS, Barrons.com
Use calls on a popular S&P500 ETF to position for a possible further rise in U.S. equities.
One of the stock market’s most significant developments is taking place in the bond market. The 10-year Treasury yield is actually rising — from 2% to 2.37% in recent sessions — suggesting investors are finally abandoning the bond market’s safety for the higher risk and returns of the stock market.
http://jlne.ws/GCSgOb

VIX: Don’t be Deceived By Jared Woodard, The Street
Don’t be deceived by a low spot CBOE Volatility Index (VIX) value. In the last few weeks, I’ve seen a lot of traders on the web and on Twitter (and in sell-side research notes) making these sorts of claims about the sub-20 VIX:
1. A low VIX means it’s a cheap time to hedge your stocks.
2. A low VIX means investors are complacent / the market is likely to correct soon.
Neither of these are true.
http://jlne.ws/GE8NgA

Options Education

ChineseInvestors.COM Announces the Launch of a New Chinese Language Based Binary Options Website MarketWatch
ARCADIA, Calif., March 20, 2012 /PRNewswire via COMTEX/ — ChineseInvestors.COM (OTCBB ‘CIIX’) announced it will be launching a new binary option based website, www.chinesefn.com.cn/ , under an expanded franchise agreement with OptionWorld (KrisWorld Development Limited of Hong Kong) as announced on February 21st of this year. The website will focus on providing Chinese speaking individuals with an interest in learning more about the ever expanding binary option marketplace with a resource that can assist them to better understand the basics of binary option trading.
http://jlne.ws/GB95DC

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