Deutsche Bank faces $1.1 billion bill to exit derivatives; Exchange operator Cboe profit beats on options and futures trade

Aug 2, 2019

Observations & Insight

Options Exchange Marketshare for July 2019 (via the OCC)
(Click for larger image)


Cboe confirms it will move HQ
Lynne Marek – Crain’s Chicago Business
Chicago options exchange company Cboe Global Markets has put its South Loop headquarters building up for sale and plans to move by next year.
Chief Financial Officer Brian Schell told analysts on a conference call this morning that the company expects to move by the middle of next year, specifically between the second and third quarters.

****SD: “Schell said Cboe is making the headquarters move after its workforce shrunk following its acquisition in 2016 of Kansas City-based Bats.”

Lead Stories

Deutsche Bank faces $1.1 billion bill to exit derivatives
Matt Scuffham – Reuters
Deutsche Bank has set aside over 1 billion euros ($1.1 billion) to cover the cost of offloading derivatives in its ‘bad bank,’ or capital release unit, three sources at the bank told Reuters.

Exchange operator Cboe profit beats on options and futures trade
Cboe Global Markets Inc beat analysts’ estimates for quarterly profit on Friday, as strength in the exchange operator’s options and futures business offset a softer trading environment in other areas.

Mark Gorton Steps Down From Helm of HFT Firm Tower Research
Max Abelson and Matthew Leising – Bloomberg (SUBSCRIPTION)
Albert An, who joined in 2016, succeeds him as chief executive; Tower is one of the oldest high-frequency firms in the U.S.
Mark Gorton is stepping down from the helm of Tower Research Capital, the high-frequency trading giant he founded two decades ago.

Wells Fargo Says VIX, S&P Volatility Spikes May Be Overdone
Joanna Ossinger, Bloomberg via Yahoo Finance
The tariff news-induced volatility has outdone that for equities and may be due to reverse, according to Wells Fargo & Co.
The Cboe Volatility Index, or VIX, rose as high as 19.46 intraday after U.S. President Donald Trump announced a new round of tariff hikes on Chinese imports, abruptly escalating the trade war between the two countries. It was at 18.01, up from Thursday’s close, as of 8:33 a.m. in New York. The S&P 500 posted a modest 0.9% drop on Thursday to put it only about 2.4% below the July 26 record high.

Exchanges and Clearing

London Stock Exchange Boss Marks First Year on the Job With $14.5 Billion Refinitiv Deal
In the job a year to the day, London Stock Exchange Group PLC Chief Executive David Schwimmer has wasted little time putting his stamp on the European exchange operator.

Cboe Global Markets Reports Results for Second Quarter 2019
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the second quarter of 2019.

CME Group Averaged 16.6 Million Contracts Per Day in July 2019, Up 23% from July 2018
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 16.6 million contracts during July 2019, up 23% from July 2018. Open interest (OI) at the end of July was 139 million contracts, up 20% from year-end 2018 and up 15% from July 2018.

Cboe Introduces New Small Retail Broker Distribution Program for U.S. Equities Market Data
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today announced it has launched a new Small Retail Broker Distribution Program which aims to broaden access to U.S. equities market data for individual investors.

Dalian Commodity Exchange Releases And Implements New “Bylaws” And “Trading Rules” On Aug. 1
Dalian Commodity Exchange (DCE) officially releases and implements the new “Bylaws of Dalian Commodity Exchange” (the “Bylaws” for short) and the new “Trading Rules of Dalian Commodity Exchange” (the “Trading Rules” for short) on August 1, 2019. With the listing of options products, the introduction of overseas traders into iron ore futures, and the over-the-counter market construction, DCE has preliminarily transformed from a single and closed commodity futures exchange to a diversified, open and comprehensive derivatives exchange and marched towards the new journey of building a first-class derivatives exchange in the world.

Regulation & Enforcement

Star No. 20170544364, Sumo Capital, LLC
Cboe Disciplinary Filing
File No. USE-2296

****SD: Sumo was censured and fined $25,000 for net capital requirement infractions.


Interactive Brokers Reports Flat DARTs on Summer Doldrums
Aziz Abdel-Qader – Finance Magnates
Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes fell slightly in July from a month earlier as traders took their summer breaks and volatility approached seasonal lows.

PanXchange paves way for hemp derivs
Louisa Chender – Global Investor Group (SUBSCRIPTION)
The physical commodities exchange has launched a trading platform for hemp products

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