Cboe Plans Micro Options on S&P 500 to Entice Day Traders

Oct 27, 2021

Lead Stories

Cboe Plans Micro Options on S&P 500 to Entice Day Traders
Joanna Ossinger – Bloomberg
Cboe Global Markets Inc. plans to launch a micro-sized S&P 500 options contract next year – dubbed ‘nanos’ – aimed squarely at the day-trading army.
The contracts will be a fraction of the size of existing S&P 500 options, allowing speculators to make bets with less money. CBOE said in a statement that it wants to make options “accessible for the everyday retail trader” and the smaller contract size will be suitable for beginners.

****JB: Also see Markets Insider story, Cboe is launching small-sized S&P 500 options to pull in retail traders.

Collateral Damage From The Billionaire Tax: Your Option Trades
William Baldwin – Forbes
Do you ever write calls against your stocks in order to generate premium income? Do you buy puts to protect your gains? Enjoy options while you can. These time-honored strategies may be doomed.
Trouble comes via U.S. Senator Ron Wyden, a liberal Democrat from Oregon who presides over the Senate Finance Committee. His plan to tax billionaires on their paper gains is now under intense debate. Less visible: his parallel scheme to go after investors who use derivatives, like stock options.

How to hedge — with care — against a market correction
David Stevenson – Financial Times
How can you hedge your investments against downside stock market risk — and possibly even make a profit — if the market tanks?
By “tank”, I mean a proper correction of 10 to 30 per cent. It’s worth thinking about, because I believe this scenario is growing more possible, even probable, by the day.

Inflation Angst Is a Key Reason to Own Equities, Barclays Says
Michael Msika – Bloomberg
Worries about soaring inflation are prompting investors to dump fixed-income assets in favor of stocks, according to Barclays Plc strategists.
Angst about rising prices is reinforcing “TINA,” or there is no alternative, as a key reason to own equities, the strategists, led by Emmanuel Cau, wrote in a note. Equity inflows for October are broadly stable with last month’s, at $59 billion, while the amount attracted by fixed-income funds has dropped to $18 billion, the lowest since March, according to Barclays.

Libor Transition Vexes Collateralized Loan Obligations Market
Julia-Ambra Verlaine – WSJ
The global $1 trillion market for collateralized loan obligations is lagging behind in the transition away from the London interbank offered rate.
While some companies, lenders and markets have moved swiftly to adopt a replacement for the scandal-marred interest-rate benchmark, low-rated borrowers have been slower to adapt. That is causing headaches for managers of collateralized loan obligations—pools of low-rated corporate loans bundled together into securities.

Robinhood’s Crypto Business Is the Tail That Wags the Doge
Telis Demos – WSJ
The headline numbers for Robinhood Markets ‘s third quarter and its near-term outlook won’t help the stock. Still, it isn’t all bad news.
Robinhood had a net decline in cumulative funded accounts from the second quarter to the third, from 22.5 million to 22.4 million. That is a big change from recent trends of explosive growth, when millions of accounts were on net added per quarter. New funded accounts were still about 670,000 in the third quarter, but about 870,000 accounts were “churned”—or left without funds for a while. A churned account isn’t necessarily a permanently lost one. About 110,000 accounts were “resurrected” from that status in the third quarter. But for now, evidently some users don’t mind being dormant.


Introducing Nanos by Cboe, Smaller and Simpler Options Designed for Retail Traders
Cboe Global Markets, Inc.
Designed to make options trading more accessible for the retail trader;- Lower-price, simple tool for exploring options trading strategies; Cash-settled (no delivery of physical shares) and European-style (no early exercise); Launching Nanos S&P 500 in first-quarter 2022, expanding S&P 500 Index options suite
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced plans to launch Nanos by Cboe, a first of its kind options contract designed to simplify options trading. Nanos by Cboe help make options trading accessible for the everyday retail trader, allowing them to start small, learn as they go and grow their trading confidence.

***** Cboe goes small to go big. The Small Exchange and FairX concept keeps getting competition and affirmation.~JJL

CME Group Inc. Reports Third-Quarter 2021 Financial Results
CME Group
CME Group Inc. (NASDAQ: CME) today reported financial results for the third quarter of 2021.
The company reported revenue of $1.1 billion and operating income of $614 million for the third quarter of 2021. Net income was $927 million and diluted earnings per share were $2.58. On an adjusted basis, net income was $574 million and diluted earnings per share were $1.60. Financial results presented on an adjusted basis for the third quarter of 2021 and 2020 exclude certain items, which are detailed in the reconciliation of non-GAAP results.
“We saw robust volume growth in Q3 as clients continued to manage a variety of risks during these times of ongoing economic uncertainty,” said CME Group Chairman and Chief Executive Officer Terry Duffy. “Average daily volume grew 14% year over year during the quarter, led by double-digit growth in interest rates, energy and options products, as well as strong non-U.S. volumes, which increased 13% to 5 million contracts per day.”

Cboe Global Markets Declares Fourth-Quarter 2021 Dividend
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced its Board of Directors has declared a quarterly cash dividend of $0.48 per share of common stock for the fourth quarter of 2021. The fourth-quarter 2021 dividend is payable on December 15, 2021, to stockholders of record as of November 30, 2021.

Robinhood Earnings Miss Targets on Crypto Trading Plunge, HOOD Stock Falls
Annie Massa – Bloomberg
Robinhood Markets Inc. tumbled in early trading Wednesday after reporting third-quarter revenue that fell short of Wall Street estimates as cryptocurrency transactions plunged from the preceding period.
Shares of the brokerage slumped 12% to $34.80 at 9:46 a.m. in New York, below the $38 initial public offering price in late July.

Regulation & Enforcement

U.S. regulators barely corralling feverish bitcoin mania
Jamie McGeever – Reuters
Insatiable demand for bitcoin is forcing U.S. regulators to walk an increasingly fine line between opening up the booming market to investors, and shielding them from what is still a highly speculative, volatile and risky asset.
By authorizing the first-ever bitcoin futures exchange-traded funds last week, while doubling down on its resistance to cash-based ETFs, the Securities and Exchange Commission may be getting the balance just about right.

Ex-Hedge Fund Trader Swindled Millions After 2019 Ban, SEC Says
Chris Dolmetsch – Bloomberg
A former trader at shuttered hedge fund Marinus Capital Advisors was accused by the SEC of swindling millions from investors despite being barred from the industry in 2019.


Introducing Barchart for Excel – Barchart Launches Excel Service to Unlock the Power of Barchart.com
Barchart, a leading provider of market data and trading technology to active traders and investors, announces the launch of Barchart for Excel. Barchart for Excel is a Microsoft Excel add-in that allows users to access extensive sets of price, technical, and fundamental market data across stocks, options, futures, currencies and crypto inside the flexible and powerful environment of Microsoft Excel. In addition, Barchart.com website users can seamlessly access their saved data such as Watchlists, Portfolios and Custom Views inside of Excel. Barchart’s popular Lists, such as Today’s Top Stocks, Unusual Options Activity and Most Active Futures are also available within Excel.

E*TRADE Introduces E*TRADE Equity Edge Online Developer Platform to Manage Participant Transactions, says Fortune Business Insights™; Companies Profiled in Online Trading Platform Market: TD Ameritrade, E-Trade, Fmr LLC., Ally Financial Inc., Tradeweb Markets LLC., Power Exchange India Limited, eToro – Your Social Investment Network, Interactive Brokers LLC, TradeStation, Octagon Strategy Limited, Robinhood and others
The global online trading platform market is set to gain impetus from the rising integration of artificial intelligence (AI) with electronic trading platform solutions. Chatbots help users to receive market estimations, data about the trader’s notifications, account reports, real-time estimates, and generic FAQs. In February 2021, for instance, HSBC unveiled a pricing chatbot that utilizes AI to provide instant analytics and pricing for foreign exchange (FX) options to clients.This information is given by Fortune Business Insights™in a report, titled, “Online Trading Platform Market, 2021-2028.” As per the report, the market stood at USD 8.28 billion in 2020. It is projected to grow from USD 8.59 billion in 2021 to USD 12.16 billion in 2028 at a CAGR of 5.1% during the forecast period.


Stocks Rise As Turnaround Tuesday Finally Shows Up
Michael Kramer – Investing.com
It was a wild turnaround Tuesday, with the S&P 500 opening sharply higher to finish the day up just 18 bps. The index managed to trade up to 4,598 and then turned lower, briefly turning negative in the morning session. The Invesco S&P 500 Equal Weight ETF (NYSE:RSP) was actually down 20 bps.


Deutsche Bank Seeks to Boost Hiring as War for Talent Rages
Steven Arons – Bloomberg
Deutsche Bank AG Chief Financial Officer James von Moltke said the investment bank is pressing ahead with hiring in areas including mergers and acquisitions and rates in the U.S. to grow its business.

Stock buybacks surge to likely record highs, but a tax from Congress poses a threat
Bob Pisani – CNBC
After all but vanishing last year, stock buybacks are surging in 2021 and will likely hit a record in the third quarter.
The surge in buybacks comes at a delicate moment for corporate America. Senators Sherrod Brown, D-Ohio, and Ron Wyden, D-Ore., have unveiled legislation to tax buybacks at a 2% rate. It’s part of the current negotiations to raise money to pay for President Joe Biden’s spending programs. If enacted, the tax is expected to raise $100 billion over 10 years.

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