Dash Buyout; LJM-Wells Fargo lawsuit; Options-based funds study

Mar 7, 2018

Observations & Insight

Bits for Weekly VIX/SPX Expiration Day
Spencer Doar – JLN

The Onion had a good title for Gary Cohn’s resignation – Gary Cohn Resigns In Protest Of Trump’s Bigoted Comments Towards Aluminum. If you’re wondering when this trade war could kick off – who isn’t? – Axios is reporting that Trump wants to announce tariffs tomorrow and the White House said “this week.”

Cboe released an update of its white paper on options-based funds. The 105 options-based funds focused on in the study have AUM of $38.1 billion. Some $8.5 billion of that total comes from the Gateway Fund. Did you know Gateway is eight years older – inception date December 1977 – than the same-named computer company?

Cryptocurrencies are commodities! (At least according to a federal judge.)

The producers of “The Wolf of Wall Street” have to pay $60 million to the U.S. government to resolve the 1MDB civil suit. I’d much rather watch a movie about the shady makings of “Wolf” than watch “Wolf.”

It’s never too late to switch careers (at least if you have the cash on hand). Marketwatch has a story about a guy who managed $40 billion for BlackRock and left to run 2,300 acres of farmland.

Tomorrow is International Women’s Day! Have a good one everybody.


Goldman Sachs has quietly been making some big equity derivatives hires
Sarah Butcher – efinancialcareers
When Lloyd Blankfein laid out Goldman’s hiring priorities for 2018 last month, he said a lot about strats but not so much about equity derivatives. That’s strange, because equity derivatives are where Goldman’s been making some of its most significant investments in recent months.
Goldman insiders say the bank is making a push into the equity derivatives space, as witnessed by an array of hires, mostly at executive director level, on both sides of the Atlantic. Few have been publicized

****SD: The biggest new hire is also named Spencer. So, Goldman has that going for it.

Lead Stories

Flexpoint Ford Backs Management Buy-Out Of Dash Financial Technologies
Dash Financial Technologies, provider of one of the industry’s most advanced multi-asset trading technology and execution services platforms, today announced that its co-founders, Peter Maragos and David Karat, have partnered with private equity investment firm Flexpoint Ford to acquire the Dash business from private equity firm GTCR in a management-led buyout.

****SD: Way to go, co-founders!

LJM sued by its broker Wells Fargo over missed payments
Jonathan Stempel and Trevor Hunnicutt – Reuters
A Chicago fund manager that is closing after big losses in last month’s U.S. stock market plunge was sued on Tuesday for $16.4 million by its clearing broker Wells Fargo Securities for having allegedly missed required margin payments.

****SD: “Phone calls to LJM have not been returned.”

New White Paper On Analysis Of Options-Based Funds And Benchmark Indexes
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced the publication of a new study, “Performance Analysis of Option-Based Equity Mutual Funds, CEFs and ETFs: An Update.” The new white paper modernizes the original findings of 2014 study of SEC- registered option-based funds, which focus on broad-based U.S. equities.

****SD: Matt Moran’s Cboe blog on the study here. Reuters on the study here

Some U.S. macro hedge funds thrive with renewed volatility
Kate Duguid – Reuters
While February’s stock market sell-off and renewed volatility battered macro hedge funds, some escaped unscathed: Quest Partners’ flagship fund returned 18.9 percent in the year through mid-February for clients that include the pension fund for the New York police and fire departments.
“The majority of our clients are trying to add to their positions with us,” said Nigol Koulajian, founder and chief investment officer at Quest, which has $1.5 billion in assets under management.
Not all macro hedge funds can say the same.

Why volatility may be a bigger threat than rates
Russ Koesterich, BlackRock – Nasdaq
Investors are growing anxious. Most of the angst is focused on interest rates and the Federal Reserve (Fed). However, although that fear is not irrational, it may be exaggerated , as I discussed a few weeks back. All else equal, stocks can withstand modestly higher rates. The obvious rejoinder is that all else is never equal.

There’s a Currency War Coming, Too, So Brace for the BOJ
Shuli Ren – Bloomberg
As if a brewing trade war wasn’t enough to worry about, investors also need to be alert to the threat of a major currency conflict.

Exchanges and Clearing

MIAX Options And MIAX PEARL – Daylight Saving Time
Please be advised the MIAX Exchanges are scheduled to begin Daylight Saving at 2:00 AM on Sunday, March 11, 2018.

****SD: Wait, so we lose an hour, right as it’s time to wake up early for a flight to FIA Boca? Geez. If it weren’t for circulars like this, I don’t know if I’d remember certain holidays or time changes.

Singapore Exchange and New Zealand’s Exchange sign MOU
Singapore Exchange (SGX) and New Zealand’s Exchange (NZX) have signed a Memorandum of Understanding (MOU) to expand co-operation in Asia-Pacific markets.

****SD: Dairy derivatives coming to an exchange near you?

Regulation & Enforcement

RBI plan to tweak limits in currency derivatives hits Sebi hurdle
Anirudh Laskar – LiveMint
The Reserve Bank of India’s (RBI) latest proposal to enhance clients’ position limit to $100 million in exchange-traded currency derivatives has hit a regulatory wall at the Securities and Exchange Board of India or Sebi.

U.S. regulator urges registration of cryptocurrency exchanges
Pete Schroeder – Reuters
The U.S. Securities and Exchange Commission said on Wednesday that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules.


With Kensho Acquisition S&P Global Makes Largest A.I. Deal In History
Steven Bertoni and Antoine Gara – Forbes
Daniel Nadler, the CEO and founder of artificial intelligence start-up Kensho, kicks off a pair of Ugg boots and sits cross legged on a chair in his boardroom on the 46th floor of New York’s One World Trade Center as a powerful nor’easter rages outside.

****SD: Why lead with Uggs, bad weather and the World Trade Center? Three bad memories in the first sentence.


More on Cheating
Highly Evolved Vol
One comment on “Sometimes Cheating is OK” was particularly long and insightful. I thought it needed a complete post for my reply. The anonymous commenter’s words are in blue.

This champion poker player says a ‘premortem’ can make you a better investor
Annie Duke – MarketWatch
People are pretty good at identifying goals, whether in investment portfolios, careers or relationships. When we fall short, it is frequently because of trouble keeping our decisions along the way aligned with our original goals.

****SD: You card fans out there may recall Annie Duke’s brother Howard Lederer also is a poker pro.

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Options Newsletters

Pin It on Pinterest

Share This Story