Currency Markets Warn of Turbulence Ahead
Jill Ward and Anil Varma – Bloomberg
U.S. dollar is likely to be an outsized driver of risk: LGIM; Correlation between currency, stock volatility is negative
The U.S. dollar is driving a wedge between volatility expectations for global currencies and stocks. The greenback’s plunge last month jolted currencies so profoundly that a gauge of expected swings in the market is no longer moving in tandem with a similar measure for U.S. equities. So much so that the 40-day correlation between the JPMorgan Global FX Volatility Index and the VIX Index of U.S. stock swings fell below zero this month to the lowest since 2009.
Detached from reality? Why U.S. stocks just hit a new high
David Randall and Saqib Iqbal Ahmed – Reuters
Has Wall Street missed the news that we are in a pandemic?
The U.S. economy remains battered by the coronavirus outbreak and Congress is deadlocked on another stimulus bill – yet the U.S. stock market just hit a new record intraday high.
While it may seem like investors have failed to factor in any of the bad news weighing on most U.S. households, there are several key reasons why the stock market has recovered and could continue to rally higher.
What Happens to the Markets If There’s a Vaccine? A return to normal—when it comes—ought to be a boon for investors, but strategists see risks around the corner.
Claire Ballentine, Katherine Greifeld, Gregor Stuart Hunter, Eric Lam – Bloomberg
Trying to game out anything in the 2020 financial market can be a humbling experience. Massive fiscal and monetary stimulus has been doing battle with a historic recession and a pandemic. Would you have expected a crash? You got one in February and March. And then came a rally right on its heels, bringing stocks back near record highs. So nothing is obvious. Still, on the list of events with the potential to reorder sentiment on a dime, one prospective catalyst is on almost every forecaster’s mind: the discovery of a vaccine for the Covid-19 coronavirus. If and when one comes, it ought to be a massive boost for investors, right? Wall Street pros answer with an emphatic “Maybe.” Here are three scenarios gleaned from money managers and strategists:
Exchanges and Clearing
Last Man Standing Falls: Minneapolis Grain Exchange Sold
Mary Kennedy – Progressive Farmer
The last independent grain exchange in the U.S., the Minneapolis Grain Exchange, was acquired by Miami International Holdings, according to a news release on Aug. 14. (DTN photo on left by Mary Kennedy; photo on right courtesy of MGEX) Miami International Holdings (MIH), the parent holding company of the MIAX Exchange Group, and the Minneapolis Grain Exchange (MGEX), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announced on Aug. 14 in a new release that they have entered into a definitive agreement and plan of merger.
MIAX Exchange Group – Options Markets – Corporate Action Alert: Power Integrations, Inc. (POWI)
MIAX Exchange Group
Power Integrations, Inc. (POWI) has announced a 2 for 1 stock split. Associated strike price adjustments will become effective on Wednesday, August 19, 2020. POWI options will continue to trade without interruption on the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange. All GTC orders resting on the MIAX order books in POWI will be canceled at the close of business on Tuesday, August 18, 2020. Additional details about the Power Integrations, Inc. (POWI) stock split are provided in the attached OCC Memo.
Miax Options Exchange Spikes Special Settlement Auction Settlement Reference Price Opening Width And Valid And Priority Quote Width Tables Used In The August 19, 2020 SPIKES Special Settlement Auction
Due to sustained market volatility, MIAX Options will continue to use the Settlement Reference Price Opening Width and Valid and Priority Quote Width tables detailed in MIAX Options Regulatory Circular 2020-11 for opening the SPY September 18, 2020 options used in the August 19, 2020 SPIKES Special Settlement Auction.
Regulation & Enforcement
NOTICE OF DISCIPLINARY ACTION # NYMEX 19-1149-BC
Effective Date 17 August 2020
NYMEX RULE: RULE 432. GENERAL OFFENSES (IN PART)
It shall be an offense:
G. To prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.
Afraid of Election Chaos Hitting the Stock Market? There’s an Options Trade for That.
Steven M. Sears – Barron’s
All of America’s hopes and fears will soon be on display as the Democrats and Republicans hold their virtual conventions during the next two weeks.
The Democrats started Monday, and end Thursday, during which time we should hear from Joe Biden and Kamala Harris, the presidential and vice-presidential nominees, respectively, about everything that is wrong with the nation, and everything that they can make right.
Business Insider’s best investing stories of the week ended August 18
Joe Ciolli – Business Insider
What were you doing when you were 20 years old?
Chances are that, regardless of how accomplished you were at that age, you weren’t running a 20,000-member online community on pace for $300,000 in annual revenue.
That puts Vishu Namburi and Ishaan Sandhir in elite territory. Still undergraduates at Indiana University’s Kelley School of Business, the duo are responsible for creating Eagle Investors, a wildly popular Discord server designed to help fellow Gen Z day-traders perfect their craft.
An investor whose fund returned 4,144% in the first quarter explains why tail-risk strategies are too dangerous for the average trader — and calls continued Fed stimulus ‘very, very destructive’
Emily Graffeo – Markets Insider
The prospect of a 4,144% return is tempting. But Mark Spitznagel, the chief of the fund that generated it, urged retail investors not to try similar strategies at home.
The Universa Investments chief told CNBC on Monday that tail-risk hedging is generally a “costly and a bad strategy.”
Option Block 927: Options…Options…Options…ThunderTraders, Ho!
Option Block – Options Insider Network
Commentary – Progress on diversity issues demands ‘honest, intentional, and sometimes uncomfortable conversations’
Keisha Bell – FIA.org
George Floyd was a breaking point for many black and brown people who had become accustomed to compartmentalizing their lives following the deaths of Ahmaud Arbery, Breonna Taylor, Trayvon Martin, Tamir Rice, and countless others. In order to manage the impacts we suffer from systemic racism and the violence affecting our communities, we have gotten used to maintaining a sturdy wall between our work lives, home lives and life experiences.