Observations & Insight
JLN IDX-V REPORTING DAY 3
FIA IDX-V: Global economy far from equilibrium, CME economist says
By Suzanne Cosgrove – John Lothian News
The overall economic narrative of the recent pandemic is one of sharp job losses and a “cascading network collapse,” said Blu Putnam, CME Group managing director and chief economist. “We are far from equilibrium,” he added, referencing a chart that showed a freefall in U.S. employment during the first half of 2020.
To read the rest of this report, go here.
Commodity Focus Closes IDX-V
By Thom Thompson – John Lothian News
The last session of this year’s IDX-V was titled “Commodities in Focus,” the only panel of the third day, which itself was titled “Commodities and the unexpected consequences of COVID-19.”
Joanna Williams, Of Counsel at the U.K. law firm Simmons and Simmons, moderated the panel. The participants were all European and the focus remained on conditions in European commodity markets, except for a brief excursion to Cushing, Oklahoma, the proud home of negative oil futures prices, for a thankfully brief mention of the April oil price crash.
To read the rest of this report, go here.
Clients Bullish on Stocks and Gold as Stimulus Reigns, OCBC Says
Joanna Ossinger – Bloomberg
Bullish options trades on U.S. stocks, gold and silver have become popular as investors parse potential outcomes in the recovery from Covid-19, according to OCBC Securities. Institutional clients in particular have been making bets via options on a rise in the price of assets that would benefit in a world awash in cash, according to Keeve Tan, OCBC Securities’ head of futures and FX.
Robinhood’s Day Trading Surge Will End Badly For Investors Money Managers Warn
Donna Fuscaldo – Forbes
Richard Smith thought he was onto something during the dotcom boom of the late 1990s. Arm with a PhD in mathematics he began trading tech stocks as the likes of eBay and Amazon were just taking off. Up 300% in 18 months, Smith was feeling pretty smart. But then the crash came and his gains came tumbling down. In two months, everything he built up over the last year-and-a-half was gone.
$1 billion in Bitcoin options expire tomorrow. Here’s what that means
Colin Harper – Decrypt
A billion dollar batch of Bitcoin options is set to expire tomorrow—and that means a $1 billion question mark on where the price of Bitcoin is headed next, depending on whether traders decide to take their options or walk.
Stocks close higher as opposing forces pull on the market — what investors should watch now
Lizzy Gurdus – CNBC
Opposing forces hit stocks on Thursday. The major averages closed sharply higher after a late-day surge, capping off a mixed trading session that grappled with rising coronavirus case counts in reopened states such as Texas, which said it would pause its efforts to try to stem the spread. U.S. stocks initially rose after banking regulators said they would ease some restrictions put in place after the 2007-2009 financial crisis, sparking an upward move in bank stocks that continued in the afternoon bounce.
Regulation & Enforcement
CFTC withdraws Reg AT, advances supplemental electronic trading proposal
Kyle Glenn – FIA.org
The U.S. Commodity Futures Trading Commission advanced a proposed rulemaking, “Electronic Trading Risk Principles,” by a 4-1 vote on June 25. The proposal, which was based on extensive discussions with FIA members and other market participants, calls on exchanges to comply with three principles for protecting markets from disruptions and anomalies caused by electronic trading. The Commission also voted 3-2 to formally withdraw a controversial 2015 proposed rule and supplemental proposal, known as Regulation Automated Trading (Reg AT). That rulemaking sought to achieve similar goals but took a more prescriptive approach.
NYSE ARCA, INC. LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. 2017053131503
From March 13, 2017 through March 17, 2017, Nomura Securities International, Inc. violated Rule 17a-3(a)(6)(i) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and NYSE Arca Options Rule 6.68 (Record of Orders) by failing to accurately record the order receipt and order transmission times of manual options orders it had routed to NYSE Arca and various other national securities exchanges for execution.
NYSE AMERICAN LLC LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. 2017053131502
From March 13, 2017 through March 17, 2017, Nomura Securities International, Inc. violated Rule 17a-3(a)(6)(i) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and NYSE American Rule 956NY (Record of Orders) by failing to accurately record the order receipt and order transmission times of manual options orders it had routed to NYSE American and various other national securities exchanges for execution.
MARKET REGULATION ADVISORY NOTICE
Effective on trade date Monday, July 13, 2020, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA2003-5 from May 15, 2020.
Phenomenon: On This Score, Robinhood Now Exceeds E*Trade, Others
Paul Rowady – Alphacution blog
The holidays, with all of its gift-giving elves, came early this year with new data; data that I have been crunching non-stop for the past week – and will likely continue to crunch in the week ahead. The exercise has yielded one “I-shit-you-not” revelation after another after another, almost as if such a trove could not exist in the public domain lying around for free.
After Stocks’ Huge Quarter, It’s Time to Hedge the Market
Randall W. Forsyth – Barron’s
The bigger the drop, the bigger the pop, according to one market maxim. With the stock market rebounding from its first-quarter pandemic plunge with one of its best quarters in decades, that saying seems true. But, as another adage holds, the easy money has been made (although it sure hasn’t seemed easy). Through Thursday, the S&P 500 index had recovered 38% from its March 23 lows, while the Nasdaq Composite was up 46% and set a record this past week, and the Russell 2000 index of small-cap stocks had jumped 43%.
(Podcast) Option Block 912: Happy Lobstering