Derivatives industry experts discuss lessons learned from COVID-19 crisis; EU banks expect further margin reprieve for equity options

Jun 25, 2020

Observations & Insight


FIA IDX-V: ‘No Victory Laps,’ But Systems Clear Amid Pandemic-Infused Volatility
By Suzanne Cosgrove – John Lothian News

The global pandemic provided European markets with their first major test since the implementation of financial reforms that followed the 2008-2009 financial crisis, a challenge they met despite “stress on all of the markets, all of the time,” said Daniel Maguire, CEO of LCH Group and group director, post trade division, of LSEG.

To read the rest of this report, go here.

Brent Crude: Global Benchmark
By Thom Thompson – John Lothian News

The closing session of IDX-V Day 2 offered ICE pumping its own oil in the form of an infomercial (“sponsored session”) about ICE Brent crude futures. The two-person session had Chris Edmonds, ICE Global Head of Clearing and Risk, as master of ceremonies, and ICE Head of Oil Market Research Mike Wittner as the sole other speaker.

To read the rest of this commentary, go here.

Lessons Learned in Real Time
By John Lothian

At the end of the IDX-V session on the lessons learned Wednesday, just after Chris Smith from LME mentioned the importance of infrastructure for working from home, my internet failed.

FIA’s Don Byron, who moderated the panel, had mentioned how when the movie Frozen II came out, the telecom companies mentioned it had slowed down the internet globally, as well as the last mile.

To read the rest of this report, go here.

Lead Stories

Derivatives industry experts discuss lessons learned from COVID-19 crisis
MarketVoice Staff –
On June 24, FIA hosted more than two hours of virtual presentations exploring how recent volatility has impacted the trading and post-trade processing of cleared derivatives, and how the industry has continued to function in a world in lockdown. The panel discussions took place as part of the second day of FIA’s IDX-V conference.

EU banks expect further margin reprieve for equity options
Samuel Wilkes – (Subscription required)
Banks are expecting EU regulators to further extend exemptions for equity options and intra-group trades from non-cleared margin rules on over-the-counter derivatives. “I have heard positive noises in that direction,” says a regulatory expert at a European investment bank. “[I’m] watching this space carefully, but there does seem to be receptivity to fixing this issue.”

Bitcoin Options Open Interest Hits Peak Hours Before Giant $1B Expiry
William Suberg – Cointelegraph
CME Group sees a new all-time high for combined Bitcoin derivatives open interest, with options driving the momentum. Bitcoin (BTC) options continue to see record open interest this week with a $1 billion expiration just one day away. According to data from on-chain analytics tool Glassnode and others, demand for options continues to underscore the uncertain market mood.

Exchanges and Clearing

CME Globex Notices: June 22, 2020
CME Group

Regulation & Enforcement

A proposal to amend Options 3, Section 3 to conform the rule to Section 3.1 of the Plan for the Purpose of Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of Standardized Options.

Amendments to the Minimum Block Threshold Levels Requirements of all CME Dairy Inter- and Intra-Commodity Futures Spreads and Options Spreads and Certain CBOT Grain Inter-Commodity Spreads
CME Group
Effective Sunday, July 12, 2020 for trade date Monday, July 13, 2020, and pending all relevant regulatory CFTC review periods, Chicago Mercantile Exchange Inc. (“CME”) and The Board of Trade of the City of Chicago, Inc. (“CBOT”) (collectively, the “Exchanges”) will revise standards for meeting the block trade minimum threshold in all intra- and inter-commodity futures spreads, futures combinations, options spreads, and options combinations in CME Dairy products and select CBOT grain inter-commodity futures spreads and options spreads in the tables below (the “Rule Amendments”).

CME Group
NON-MEMBER: Exante Limited

Options Trader Alert #2020 – 18 Nasdaq ISE Updated Pricing Effective July 1, 2020
Effective Wednesday, July 1, 2020, pending filing with the SEC, Nasdaq ISE (ISE) amends its pricing as described below:


Tech Stocks May Be Getting Ready for a Serious Pullback. What Investors Should Do.
Steven M. Sears – Barron’s
Weakness is provocative. The stock market’s sharp decline on Wednesday should be viewed as a welcome development by every long-term investor who has been sitting on the sidelines watching equities rally ever higher. Many blue-chip stocks, including those in the hot technology sector, are now suddenly a bit more reasonably priced.


(Podcast) OIR Interviews: Getting Geeky with Options Education
Options Insider Radio Network

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