JLN Options: CME Group Expands Agricultural Options Offering with Three New KCBT Wheat Options Contracts

Jun 4, 2013

Commentary & Insight Tom Lloyd Campbell’s Tom Lloyd Talks Managed Futures Mutual Funds and JOBS Act
MarketsWiki.tv Tom Lloyd is general counsel at Campbell & Co., a Baltimore, MD-based provider of absolute return investment management, specializing in systematic managed futures and equity market-neutral strategies. Lloyd, a former managing director for Deutsche Bank Alex Brown, joined Campbell in 2005 to head the legal and compliance functions of the firm and its subsidiaries. In addition, Lloyd oversees Campbell’s fund administration function and, in November 2012, he was named to the firm’s board of directors. Lloyd spoke with John Lothian News Editor-at-Large Doug Ashburn about the emergence of managed futures mutual funds as an additional investment choice in the alternatives space, and explained some of the logistics behind setting up such a fund and carrying out the accounting, reporting and marketing functions. He closes with a discussion of the JOBS Act and how possible changes to general solicitation and advertising could affect Campbell’s marketing strategy. Watch the video »

Lead Stories

CME Group Expands Agricultural Options Offering with Three New KCBT Wheat Options Contracts
Press Release (CME Group via 4-Traders)
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it has expanded its agricultural options offering through the introduction of three new options on the recently-acquired KCBT hard red winter (HRW) Wheat futures contracts. KCBT Weekly Wheat Options, KCBT-CBOT Wheat Spread Options and MGEX-KCBT Wheat Spread Options will be available for trading on July 1, pending CFTC review.
http://jlne.ws/18LSLz8 Is volatility dead? Hardly
Paresh Upadhyaya and Michael Temple, InvestmentNews
Certain pundits suggest we have entered a new volatility regime – that volatility has been tamed by the massive amount of liquidity injected into worldwide capital markets by very accommodative central banks. We take a different view. While volatility has been declining across many asset classes, it is creeping into several that may have escaped some investors’ attention.
http://jlne.ws/18LPzDw Stock Exchanges Seek Curbs on Dark Pools to Fight Exodus
Dave Michaels, Bloomberg
Three large U.S. stock exchanges are lobbying for new limits on dark pools and other competitors, arguing that too much trading has become hidden on private venues that create more cost and volatility in public markets.
http://jlne.ws/18LOED7
**So it would seem regulation is bad…except when it isn’t. -JB ‘Tireless Rally’ Showing Signs of Fatigue
Michael Santoli, Yahoo Finance
The late May market stumble cost the stock indexes just over 3% from May 21 to Monday’s morning low – about the same degree of damage done by the two earlier setbacks this year, in February and April. Those ended up being sudden but fleeting stutter-steps in the S&P 500’s unrelenting run to successive new all-time highs.
http://jlne.ws/18LTSig GM Rejoining S&P 500 Is More Than A Symbolic Victory
Abram Brown, Forbes
General Motors , five years removed from its government bailout, will return to the S&P 500 on Thursday, an important mark for the car maker as it tries to distance itself from the financial crisis. GM will also receive a spot on the S&P 100.
http://jlne.ws/18LU1lT Derivatives players prepare for Libor shake-up
Richard Partington, Financial News
Players in the derivatives market are preparing to forge a raft of individual agreements this week to head off disputes over valuation, contracts and settlement as a suite of Libor benchmarks disappear.
http://jlne.ws/13jxTwZ Attack of the Hedge Fund Clones
Lewis Braham, BloombergBusinessweek
In the investment world there are two kinds of people — those who want to beat the market, and those who want to be the market. Hedge fund managers are the former, while index fund managers are the latter. But what happens when an indexer wants to track the hedge fund market?
http://jlne.ws/11h5CnK The Barron’s 400 ETF Launches
Brendan Conway, Barron’s
Nearly six years old and developed by investment-research firm MarketGrader in consultation with Barron’s editors and Dow Jones Indexes, the B400 is a stock picker’s index, one that seek out stocks exhibiting many of the qualities Barron’swriters and editors examine when evaluating companies.
http://jlne.ws/18LQnZc From ‘Bernanke put’ to ‘RBI put’
T.B. Kapali, The Hindu Business Line
Globally, a “free put option for financial markets investors” is a perception and a concept made famous, first by Alan Greenspan and in more recent times by Ben Bernanke.
But, it seems that free put options for investors are available not only in Greenspan’s and Bernanke’s world. Emerging market economies such as India also seem to be quite generous to them.
Indeed, India also appears ready to (continue to) provide investors free put options, if the RBI’s recent statement on foreign exchange (FX) market intervention is any indication.
http://jlne.ws/18LT90y

Exchanges

ISE Reports Business Activity for May 2013
Press Release (ISE)
The International Securities Exchange (ISE) today reported an average daily volume of 2.7 million
contracts in May 2013. This represents a decrease of 5.2% compared to May 2012. Total options volume
for the month was 58.3 million contracts. ISE was the second largest U.S. equity options exchange in
May with a market share of 17.2%*.
http://jlne.ws/13DqffT (PDF) CME Group Volume Averaged 14.7 Million Contracts per Day in May 2013, Up 11 Percent from May 2012, Marking Highest Month since August 2011  
Press Release (CME Group via The Wall Street Journal)
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that May 2013 volume averaged 14.7 million contracts per day, up 11 percent compared with May 2012, and up 27 percent sequentially. Total volume for May 2013 was more than 324 million contracts, of which 88 percent was traded electronically.
http://jlne.ws/18LTksB ICE Reports May Daily Futures Volume; $915 Billion in CDS Cleared by Buyside, $41 Trillion in Total CDS Cleared to Date
Press Release (ICE)
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today reported futures volume for May 2013. ICE’s average daily volume (ADV) for futures and options was 3,317,512 contracts, a decrease of 5% from the prior May. Total volume in May 2013 was 73 milli on contra cts.
http://jlne.ws/18LRmZt TMX Group Consolidated Trading Statistics – May 2013
Press Release (TMX via The Wall Street Journal)
Trading volume on Toronto Stock Exchange in May 2013 increased 1% compared to April 2013 and increased about 1% year-over-year. Volume on TSX Venture Exchange decreased 9% from April 2013 and decreased 17% compared to May 2012. TMX Select trading volume experienced a decrease of 4% from the previous month, but increased 19% compared to the same month last year. Alpha trading volume for May 2013 decreased 38% compared to the previous month and was down 49% compared to the same month a year earlier.
http://jlne.ws/18LSa0q

Regulation

Credit Traders Said to Win SEC Relief in Portfolio Margin Rules
Silla Brush and Dave Michaels, BloombergBusinessweek
Hedge funds and asset managers will win partial relief from Dodd-Frank Act collateral requirements for credit-default swaps under a policy shift to be announced this week, according to two people briefed on the matter.
http://jlne.ws/18LP8sW Investigation Continues At Troubled Hedge Fund
Jim Zarroli, NPR
A federal insider trading probe focused on the hedge fund SAC Capital is causing investors to take action. Investors have pulled an estimated $3.5 billion from the fund in anticipation of additional developments.
http://jlne.ws/18LR7NO

Technology

Trading Technologies Launches Connectivity to Eris Exchange
Press Release (TT)
Trading Technologies International, Inc. (TT), a global provider of high-performance trading software for derivatives professionals, and Eris Exchange, a U.S.-based futures exchange offering swap futures as a capital-efficient alternative to traditional OTC interest rate swaps, today announced that TT has released its connection to the Eris SwapBook™ electronic trading platform.
http://jlne.ws/18LRzvv

Strategy

Investors Buying Insurance Against Stocks  
Steven M. Sears, Barron’s
The options market turns suddenly bearish as investors load up on puts to hedge their portfolios. Here’s how to play defense.
http://jlne.ws/11j2He0

Events

CBOE Holdings To Participate In Sandler O’Neill Global Exchange and Brokerage Conference On June 7
Press Release (CBOE)
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that Edward T. Tilly, Chief Executive Officer, will participate in the Sandler O’Neill Global Exchange and Brokerage Conference in New York City on Friday, June 7, 2013 at 11:30 a.m. Eastern Time.
The presentation, to be broadcast live over the Internet, can be accessed at www.cboe.com under Investor Relations, Events and Presentations.  Approximately 24 hours after the live presentation, an audio Webcast will be available for replay at the same address.
http://jlne.ws/17l8l6R

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