Lead Stories

CME independent traders boycott pit-traded options
By Howard Packowitz, MarketWatch
CHICAGO -(MarketWatch)- Independent traders staged a walkout Friday of CME Group Inc. options on Eurodollar futures, protesting a large, privately negotiated trade a day earlier that they claimed was unfair. The action by the floor traders, who are also known as locals, threatened to deplete volumes in one of CME’s most-actively traded interest rate products, although there were signs the protest might be calming down as the morning went on. The protest followed a massive block options trade performed in Eurodollar futures Thursday. Block trades are privately negotiated transactions performed off the trading floor, but cleared by the exchange, and reported minutes later on the CME website.
http://jlne.ws/HADYrK

Large Options Trade Sparks Strike Among Some CME Traders
FOXBusiness, Jeff Flock
A group of traders working in one the busiest options pits at the Chicago Mercantile Exchange walked out in protest what they called unfair handling of a large trade. The trade, which was cleared in the CME’s Eurodollar Options market, was processed electronically instead of through so-called open outcry in the pit. The traders demanded the trade be voided because they said it did not result in the best price for the buyer. The CME Group (CME: 286.03, -1.46, -0.51%) chose not to invalidate the transaction, saying the size of the trade necessitated that it be carried out in that way.
http://jlne.ws/I9dShO

CBOE HOLDINGS ANNOUNCES APPOINTMENT OF ALEXANDRA ALBRIGHT AS CHIEF COMPLIANCE OFFICER
CHICAGO, April 13, 2012 – CBOE Holdings, Inc. (NASDAQ: CBOE) today announced that Alexandra M. Albright has been named to the newly created role of Chief Compliance Officer (CCO) for its affiliated exchanges — the Chicago Board Options Exchange (CBOE), C2 Options Exchange (C2), CBOE Futures Exchange (CFE) and CBOE Stock Exchange (CBSX). Albright, who will assume the CCO position on April 23, will report to President and COO Edward T. Tilly and to the regulatory oversight committees of the exchanges.
Albright’s broad responsibilities include establishing, implementing and maintaining policies and procedures that apply to the affiliated exchanges’ self-regulatory organization obligations, and ensuring that exchange operations comply with both the exchanges’ rules and policies and with SEC and CFTC regulations and laws. Her other responsibilities include educating exchange employees about compliance-related issues.
http://jlne.ws/IECnm2

Option traders bullish on banks as earnings loom
Doris Frankel, Reuters
Option traders appear to be stepping up bullish positions in an exchange-traded fund tied to a basket of financial stocks just ahead of a slew of earnings from big U.S. banks. Shares of the Financial Select Sector SPDR exchange-traded fund XLF (XLF.P) which tracks financial-related companies from the Standard & Poor’s 500 index .SPX rose 1.9 percent to $15.49 on Thursday.
The rise in the fund was accompanied by a burst of activity in its calls, contracts often used to bet on share gains, in a change of sentiment from the previous session. It comes a day before bellwethers JPMorgan Chase & Co (JPM.N) and Wells Fargo (WFC.N) kick off bank earnings Friday morning.
http://jlne.ws/ILo2Ig

Exchanges

Barclays Launches First Locally Listed Exchange Traded Notes on Toronto Stock Exchange
TORONTO, Apr 13, 2012 (Press Release) — Barclays Bank PLC (“Barclays”) announced that today is the first day of trading for three iPath® Exchange Traded Notes (ETNs) on the Toronto Stock Exchange. The iPath® ETNs are the first ETNs to be listed locally on an exchange in Canada.
The ETNs were created to provide investors with access to USD-denominated indices in a CAD-hedged and locally issued format. The following are the new iPath ETNs and their exchange tickers:
1. iPath® S&P 500 VIX Short-Term FuturesTM CAD Hedged ETN (VIX)
2. iPath® S&P 500 Dynamic VIX CAD Hedged ETN (DVX)
3. iPath® Pure Beta Crude Oil CAD Hedged ETN (PBO)
The volatility linked ETNs, VIX and DVX, are linked to the S&P 500 VIX Short-Term Futures TM IndexTR and the S&P 500® Dynamic VIX Futures™ Total Return Index, respectively. VIX offers exposure to shorter-term futures on the CBOE Volatility Index and DVX offers exposure to a dynamic strategy that aims to reduce the effects of contango during normal or low volatility regimes. These products can be used to manage or hedge risk and express a directional view on volatility.
http://jlne.ws/IA8l7M

INSTITUTIONS

Rosenblatt Hires Options Team
James Armstrong, Traders Magazine Online News
Rosenblatt Securities has branched out into options, hiring a four-person team that offers sales, trading and strategies for options. The new options group is led by former FBN Securities honcho Gary Wishnow. A veteran with roughly 12-years of experience, Wishnow was most recently head of options sales and trading at FBN. Earlier in his career, he was vice president of institutional sales and trading at Louis Capital Markets, a market maker at Knight Financial Products and a broker at ICAP. Wishnow will now be managing director for derivatives sales and trading at Rosenblatt, where he will report to Joe Gawronski, the firm’s president and chief operating officer.
Gawronski said that he has been trying for years at Rosenblatt to get a team dedicated to options, an asset class whose volume continues to experience double-digit growth from year to year.
http://jlne.ws/HGDPoZ

(Story follows up on press release from April 10)


STRATEGY

More Cautious Signals From Volatility Options
By Brendan Conway, Barrons.com
As we’ve documented on this blog periodically, volatility-trading products are not for the novice. But you don’t need to trade them to benefit from watching what others are doing. Like understanding the cautious signal in the biggest such product’s equity options of late.
Susquehanna Financial derivatives strategists note a Friday batch of put selling by traders in the iPath S&P 500 VIX Short-Term Futures ETN (VXX) in their afternoon market roundup.
http://jlne.ws/HJ9sxK

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