Observations & Insight
*****JJL: A blog called OptionsTradingIQ.com has a post titled “WHAT IS FRONT RUNNING?” I have been a front runner my whole life. Every time I try running backwards, I trip over something. Most people trip up when they front run too, in the markets.
Day Traders Know a Bubble When They See One, and They Want In
Vildana Hajric and Lu Wang – Bloomberg
It’s a bubble, according to a survey of retail stock investors. And they don’t want to miss it.
An E*Trade Financial survey found that roughly three-quarters of retail investors believe the market is “fully or somewhat” in a bubble, a 3 percentage-point increase from the previous quarterly poll. At the same time, bullish sentiment has increased, rising to pre-pandemic levels at 61%.
Marko Kolanovic Says Markets May Be at Long-Term Turning Point
Joanna Ossinger – Bloomberg
Global markets may have reached an inflection point with value shares set to outperform growth ones for a significant period, according to JPMorgan Chase & Co. chief global markets strategist Marko Kolanovic.
The rebound in value driven by the recovery from the pandemic, falling volatility and fiscal and monetary policy support is set to last for some time as the various factors work their way through the system, Kolanovic said in an interview. These could trigger a long-term investment shift toward being more cyclical and reflationary, he said.
Red Lights Flashing in Credit Markets as Huarong Concern Grows
Kyungji Cho and Ameya Karve – Bloomberg
Credit markets in Asia have been shaken by a selloff in one of China’s largest bad-debt managers, raising concern that other heavily leveraged borrowers may also stumble.
The Markit iTraxx Asia ex-Japan credit-default swap index of investment-grade bonds widened about 2 basis points, after recent reports of a looming restructuring at bad-debt manager China Huarong Asset Management Co., traders said. The gauge is set for a seventh day of increases, the longest streak since December 2018, and is at its highest since October last year, according to data from CMA.
Insatiable Stock Bulls Demand More of Rally Running on Euphoria
Vildana Hajric and Lu Wang – Bloomberg
It’s just a quarter of the way through 2021 and stocks have already leaped past Wall Street’s year-end forecasts. They’ve jumped 10% and priced in so much optimism that it will take two more years for earnings to catch up. Is that enough for bulls? Nope. In a market that has plowed through records once every five days, the only things expanding faster than valuations are investor expectations. At Citigroup, an indicator that compares levels of panic to euphoria in the market has been pinned on elation all year, while a Bank of America model weighing optimism among sell-side analysts sits at a 10-year high. To be sure, animal spirits have calmed at the market’s loopiest edge, with penny-stock volume down and the meme craze receding. But robust appetite persists in its tamer — and still speculative — districts.
Exchanges and Clearing
Initial Listing of the USD Malaysian Crude Palm Oil Day 15th Bullet Futures
USD Malaysian Crude Palm Oil Day 10th Financial Options Contracts
Effective Sunday, May 2, 2021, for trade date Monday, May 3, 2021, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list the USD Malaysian Crude Palm Oil Day15th Bullet Futures and USD Malaysian Crude Palm Oil Day 10th Financial Options contracts (the “Contracts”) for trading on the CME Globex electronic platform (“CME Globex”) and for submission for clearing via CME ClearPort.
MIAX Exchange Group – Options & Equities Markets – Reg SCI / SIFMA BCP Testing on Saturday, October 23, 2021
The MIAX Exchange Group will be participating in the 2021 SIFMA BCP Testing on Saturday, October 23, 2021. All members that are required to test with MIAX Options, MIAX Pearl Options, MIAX Emerald Options and/or MIAX Pearl Equities Exchanges in accordance with Regulation Systems Compliance and Integrity (Regulation SCI) have been notified. However, all members are encouraged to test.
Cboe reshuffles EuroCCP senior team post-acquisition
Hayley McDowell – The Trade
Exchange operator Cboe Global Markets has made several changes to the senior management team at EuroCCP following its acquisition of the pan-European equity clearinghouse. The changes to the senior team aim to position the firm as it transitions into a multi-asset clearinghouse. EuroCCP will incorporate equity derivatives into its existing cash equities and ETF businesses to support the launch of Cboe Europe Derivatives. Under the changes, chief risk officer at EuroCCP since 2008, Arnoud Siegmann, has been appointed chief operating officer. Jonathan Tran, who joined EuroCCP in 2018 from LCH, will take over from Siegmann as chief risk officer having worked previously as deputy chief risk officer.
MIAX Options Exchange – Indicative Price Messages For Proprietary Products
MIAX Options will calculate the indicative marking prices (“indicative prices”) for index options on proprietary products at 4:00 PM ET each trading day. The purpose of the indicative prices is to allow alignment of final prices for MIAX traded products with the settlement of related instruments traded on other exchanges. Indicative prices will be sent to the Option Price Reporting Authority (“OPRA”) after 4:15 PM ET on normal trading days and are an indication of price only and apply only to options of single listed exchange proprietary products.
Fundamentals of Futures & Options (also applicable to Series 3 Exam)
For more than 30 years, IFM has consistently provided learners with a solid foundation and understanding of futures and options markets and trading including terminology, risk management, pricing, and basic trade strategies. This instructor-led virtual course includes lectures from an engaging instructor with real-world expertise and supported by class discussion, practice exercises and educational materials. The course fee includes two must-read industry books – Futures and Options and the Guide to U.S. Futures Regulation.
Date May 10, 2021 12:00 p.m. – May 14, 2021 2:00 p.m.
Location: Virtual Live. 2-hour sessions over 5 days.
Instructor: Marti Tirinnanzi
Class size registration is limited to approximately 20 participants to promote student participation and interaction.
Q1 2021 ETD Volume
May 5, 2021; 10:00 a.m. to 11 a.m. ET
The webinar will highlight the main trends in trading activity in Q1 2021 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings. The webinar also will feature two guest speakers from UBS discussing the rise of retail participation in the U.S. ETD markets.
A New Virtual Experience
The Options Industry Conference is Going Virtual in 2021. Join OCC and the options exchanges for the 39th annual Options Industry Conference, April 28-29, 2021. While the conference will be held virtually for the first time in its history, the focus will continue to be the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
Volatility Concepts for Option Investors
Date: Wednesday, April 14, 2021
Time: 03:30 PM Central Daylight Time
Duration: 1 hour
Ed Modla – Principal, Investor Education – OCC
For any options strategy, understanding the potential impact of volatility matters. That’s why it’s essential for options investors to understand the concept of volatility. On April 14th, join The Options Industry Council for a free, live webinar led by Ed Modla, a former market maker and current OIC instructor, as he explains the basic concepts of volatility.
The Covered Call Options Strategy
Date: Wednesday, May 12, 2021
Time: 3:30 p.m. CT
Duration: 1 hour
Mark Benzaquen – Principal, Investor Education – Options Clearing Corporation (OCC)
For options investors, the covered call is one of the core strategies for income generation, but there are many details to consider before opening a position. On May 12, join The Options Industry Council’s Mark Benzaquen, a former pit broker who now focuses on options education, for a detailed overview of the covered call.
The Reddit revolt: GameStop and the impact of social media on institutional investors; Following the explosive events surrounding GameStop in January, Annabel Smith unpacks the role of social media in this cautionary tale and its impact on institutional investors.
Annabel Smith – The Trade
The Reddit revolution in the US has drawn attention to the potential power that a growing force of retail investors can wield in stock markets when equipped by social media. Amateur investors have increasingly engaged with retail platforms in the last year, partly due to the pandemic leaving them idol at home, but also due to the newfound onslaught of information through social media and access to the market through retail brokerages and platforms such as Robinhood.