CME Reaches OI record of 140.5 million contracts; Sanders plan would tax derivatives trades

May 23, 2019

Lead Stories

CME Group Reaches New Open Interest Record of 140.5 Million Contracts; Interest Rate Futures and Options Open Interest Surpasses 100 Million
CME Group, the world’s leading and most diverse derivatives marketplace, announced total open interest (OI) reached a record 140,537,653 contracts on May 21, 2019. Since the end of 2018, overall OI has grown 22%.

Bernie Sanders Plan Would Tax Stock, Bond, Derivatives Trades
Laura Litvan – Bloomberg (SUBSCRIPTION)
Democratic presidential candidate Bernie Sanders introduced legislation that would impose a tax on trades of all stocks, bonds and derivatives in the U.S., a move he says would help curb Wall Street speculation and help finance his campaign promise to provide tuition-free college and cut student debt.

****SD: The only other 2020 Democratic candidate on board is Sen. Kirsten Gillibrand.

`Whack-a-Mole’ Stock Market Is Now Getting Hit From All Sides
Sarah Ponczek and Elena Popina – Bloomberg (SUBSCRIPTION)
Equities under pressure from trade, Fed and growth flare-ups; The VIX has spent part of the last 13 days above the 15 line

****SD: I’d be more concerned if the comparison was to one of those “throw a baseball to knock over three cans” games. One can is always glued to the table.

How Derivatives Market Is Stacked Ahead Of 2019 Election Results
Navneet Saluja Dsouza – BloombergQuint
The recent rally in Indian equities has not been supported by the derivatives market, according to data available on National Stock Exchange of India. NSE’s benchmark Nifty 50 index is up 580 points, or 5 percent, since the rally began on May 16. But the move is based on muted derivative average turnover in the last four sessions ahead of the crucial Lok Sabha election results.

****SD: Options expiration on the day of an election. Nice.

Euro Currency Volatility: EU Elections Highlight EUR Crosses
Rich Dvorak – FXWeek
The EU will hold parliamentary elections starting this Thursday through Sunday. According to the Financial Times latest poll, the European People’s Party coupled with the Progressive Alliance of Socialists and Democrats look set to lose their combined majority.

****SD: Included as a reminder of the fact that in addition to all the other geopolitical news, European elections are here, too.

Exchanges and Clearing

Proposal to allow dollar strike price intervals in QQQ and IWM options.
…The purpose of the proposed rule change is to amend the Exchange’s rules to allow $1 or greater strike price intervals for options listed on the PowerShares QQQ Trust (“QQQ”) and the iShares Russell 2000 Index Fund (“IWM”), consistent with recent changes proposed by Cboe Exchange, Inc. (“CBOE”) and approved by the Commission.

****[{SD]]: Strike listing processes are still an issue in the industry. There aren’t .25 cent strike intervals on AMD so why are there $2.50 strike intervals on AMZN?

Institutional Traders Mark Record Volumes on Derivative Exchanges – Volume 3 Issue 15 – Diar
Bitcoin derivatives are working out to become crypto’s “new thing” for 2019 as trading on CME, the now only regulated futures venue, has hit all-time-high two months running. BitMEX is also enjoying much of the same due to recent volatility, while Deribit options may have found a more institution-based audience.

****SD: The link is to the full report. The above derivatives portion is the second section. The report references a cool website, skew., which has a ton of free crypto options data.

Pre-trade business “lags behind” – DB1 chief
Louisa Chender – Global Investor Group (SUBSCRIPTION)
DB1 chief said the pre-trade business is lagging behind as the group sets sight on the buy side for growth

Intercontinental Exchange Announces Results From 2019 Annual Meeting of Stockholders
Intercontinental Exchange, Inc. today announced the results of the company’s 2019 Annual Meeting of Stockholders, which was held Friday, May 17 in Atlanta. A replay of the meeting is available at
Each of the eleven director nominees received a majority of votes cast “for” their election. Each director was elected to a one-year term.


The global head of machine learning left NatWest Markets for Citadel
There’s been a big exit from NatWest Markets in London: William McGhee has left the building.
McGhee was Natwest’s global head of machine learning and etrading quantitative analytics. Sources said he’s off to Citadel.

Regulation & Enforcement

ASIC warns traders to ‘lift their game’
James Eyers – Australian Financial Review
The corporate regulator has warned fixed income and foreign exchange traders to “lift their game”, revealing it has installed supervisors in 16 investment banks and stockbroking firms as part of its intensified market supervision in the wake of the Hayne royal commission.


Pico Wins “Best Low-Latency Data/Technology Provider” at 2019 Inside Market Data/Inside Reference Data Awards
Pico, a leading infrastructure, connectivity, data and cloud technology services provider to the global capital markets, has been named “Best Low-Latency Data/Technology Provider” at the 2019 Inside Market Data/Inside Reference Data Awards.


How to Profit From a Tesla Stock Tailspin
Steven M. Sears – Barron’s
It once seemed that Elon Musk would ultimately triumph against Tesla’s many critics. But the electric-car maker CEO’s behavior has become so erratic that it can no longer be dismissed as someone under gargantuan pressure lashing out at his tormentors or releasing tension.

Tracking Breakeven Ranges When Volatility Pops
Sage Anderson – tastytrade blog
After a fairly muted start to trading in 2019 (in terms of volatility), movement in the markets has finally picked up during the first couple weeks of May. This culminated in a fairly extensive selloff on May 13th, which saw the Dow Jones and S&P 500 each drop roughly 2.5%.


China prepares to open up bond futures market to domestic banks
Don Weinland – Financial Times (SUBSCRIPTION)
Chinese regulators are preparing to open up trading of bond futures to domestic commercial banks, as the government seeks to increase hedging tools and lure more foreign investors into the country’s $13tn bond market.

****SD: Thinking of Chinese futures Dalian commodities exchange tells investors to trade rationally after iron ore, coke prices jump.

Nasdaq Chief Testifies in ETF Theft Lawsuit
Asjylyn Loder – WSJ (SUBSCRIPTION)
Nasdaq Inc. Chief Executive Adena Friedman testified Thursday morning in the exchange’s lawsuit against a former business partner that Nasdaq contends stole more than $1 billion in exchange-traded funds.
Nasdaq’s civil suit, filed in October 2017 in the U.S. District Court for the Southern District of New York, alleges that ETF Managers Group LLC improperly kept millions of dollars in management fees generated by funds including a popular cybersecurity ETF best known by its ticker HACK.

****SD: When Nasdaq acquired the ISE, it also acquired this deal with ETF Managers Group.

How Hog Markets Are Coping with the Threat of African Swine Fever
Jim Sullivan – CME Group OpenMarkets
According to the Chinese Zodiac, 2019 is the Year of the Pig. Whether or not you believe in the Zodiac, this year has certainly lived up to its name.

****SD: Lean hog futures and options volumes are up along with the price.

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