Commodity traders profit from blockbuster year of market chaos

Jan 12, 2021

Lead Stories

Commodity traders profit from blockbuster year of market chaos; Cash bonanza for staff as industry reaps rewards of volatility during the pandemic
Neil Hume – FT
Commodity traders are sharing bumper spoils with their workers as the industry emerges as one of the biggest winners from the coronavirus crisis. Trafigura’s record trading results last month provided a first glimpse of a blockbuster year for an industry dominated by a small group of mostly privately owned companies that can reap huge rewards by navigating the ups and downs of volatile commodity markets.

Bitcoin Rebounds While Leaving Everyone in Dark on True Worth
Eric Lam – Bloomberg
Digital currency stabilizes after flirting with bear market; Recent climb in dollar may be test for yearlong rally
Bitcoin rebounded after Monday’s steep plunge left investors grasping for clues about what lies ahead for the world’s largest cryptocurrency. The digital coin rose 4.9% to $35,616 as of 11:30 a.m. in London, following yesterday’s 11% slide. The latest bout of roller-coaster volatility recalls past boom and bust cycles including the 2017 bubble, and has investors debating whether this is a healthy correction or the end of the latest bull run for cryptocurrencies.

What Do Wall Street Leaders Think Is the Next Big Risk?
Sonali Basak – Bloomberg
Few predicted—and most were unprepared for—the enormous challenges that have kicked off this decade: pandemic, economic collapse, social unrest, and political divisions around the world. Yet it’s the job of a Wall Street executive to factor in all the unknowns. So Bloomberg Markets asked three of the wisest and most visionary people in the industry about their worries for the next 5 to 10 years: R. Martin Chavez, who helped build Goldman Sachs Group Inc.’s trading and technology departments before he became a senior director in 2019; Eileen Murray, a Morgan Stanley veteran who was co-chief executive officer at Bridgewater Associates LP before stepping down in March 2020; and David Siegel, co-founder and co-chairman of quant trading giant Two Sigma Investments LLC. Their comments have been edited for length and clarity.

Exchanges and Clearing

Bitcoin Options Volume on Deribit Already 25% of 2020 Total
Zack Voell – Coindesk
Deribit traders have already recorded 25% of last year’s entire bitcoin options volume.

NYSE US Exchanges to Close in Observance of Martin Luther King Jr. Day
In observance of Martin Luther King Jr. Day, the New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, NYSE National, NYSE American Options, NYSE Arca Options, and NYSE Bonds markets will be closed on Monday, January 18, 2021.

CME Group and IHS Markit to Form Leading Post-Trade Services Joint Venture for OTC Markets
CME Group
CME Group (NASDAQ: CME), the world’s leading and most diverse derivatives marketplace, and IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions, today announced that they have agreed to combine their post-trade services into a new joint venture.
The new company will include trade processing and risk mitigation operations. It will incorporate CME Group’s optimization businesses – Traiana, TriOptima, and Reset – and IHS Markit’s MarkitSERV.

Full year and December 2020 figures at Eurex
Eurex’s Partnership Program continued its success story in 2020. In the OTC Clearing segment, notional outstanding volumes grew by 29%, up from 12.9 trillion EUR in 2019 to 16.6 trillion and average daily cleared volumes grew by 16% overall – up from 103 billion EUR in 2019 to 122 billion EUR in 2020. Longer dated Interest Rate Swaps grew even more strongly with a 33% rise. These volumes were driven to a substantial degree by the Partnership Program which offers participants the chance to share in the economics of OTC IRD clearing and have a say in the governance of Eurex Clearing. Portfolio switch activity also increased significantly throughout the year, while Eurex contracts continue to show a similar spread with no material basis compared to LCH.

Moscow Exchange To Start Trading Options On Natural Gas And Yandex Shares
Press Release
On 13 January 2021, Moscow Exchange will begin trading futures-style options on natural gas and on Yandex N.V. ordinary shares.
The natural gas option will provide Russian market participants and their clients with additional opportunities to trade global commodity instruments. The Yandex N.V. option will help investors in the management of equity portfolios.


Former Head of Listed Derivatives at Goldman Sachs, Nomura and Citi joins Fintech PremiaLab
Markets Insider
PremiaLab, has today announced the appointment of Mr. John Macpherson as Senior Advisor as part of its expansion in Europe. Mr. Macpherson served as Managing Director at Goldman Sachs from 2004 until 2013, then Nomura and Citibank as global head of listed derivatives.


An Options Strategy for Bank of America’s Rising Stock
Steven M. Sears – Barron’s
Shares of Bank of America, which spent most of 2020 quietly slumbering, have started to show signs of life.
The shares (ticker: BAC) are up 9% so far this year and they are on the verge of moving into a new, higher trading range. The S&P 500, by comparison, is up about 1.4% over the same period.

Trump’s about to leave D.C. That’s bad news for these stocks, strategist says
Barbara Kollmeyer – MarketWatch
A modest recovery looks to be under way after Monday’s pullback, as hope springs eternal for fresh stimulus from President-elect Joe Biden’s administration. And why should the market stop doing what it has been doing for a long time now? Bounce back again and again.


Key Risk Factors for 2021: Derivatives Strategist and Portfolio Manager Insights
This 60-minute webinar examines Key Risk Factors for 2021 from the perspective of a Strategist and Portfolio Manager. Panelists include: Mandy Xu, CFA, Credit Suisse; Stacey Gilbert, Glenmede Investment Management LP; and Matt Moran, Cboe Options Institute.
air Date:wednesday, january 13, 2021
Start Time:12:00 Pm EST
Duration:60 minutes

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