Deutsche Bank Sees Vol Curve ‘Out of Line’ With Election Risk; ETF joins world’s biggest gold owners as investors flock in

Aug 5, 2020

Lead Stories

Deutsche Bank Sees Vol Curve ‘Out of Line’ With Election Risk
Lu Wang – Bloomberg
In a pandemic-ravaged world where plenty of people worry it will take weeks or months to call a winner in the presidential election because of mail-in ballots, options traders are a picture of peace.
Rather than betting on markets staying turbulent after the Nov. 3 vote, traders are positioned for a steep post-election drop in the Cboe Volatility Index, or VIX. The pattern is “far out of line” with what happened in the last two elections, according to Binky Chadha, chief global strategist at Deutsche Bank.
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ETF joins world’s biggest gold owners as investors flock in
Robin Wigglesworth – Financial Times
An exchange traded fund has become one of the world’s biggest owners of gold, surpassing even the central banks of Japan and India, as investors have scrambled to buy the precious metal and pushed it to record highs.
SPDR Gold Shares, an ETF that owns physical bullion rather than just financial derivatives, has hoovered up gold this year as investors seeking price gains or a haven asset channel more money into the fund.
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Kodak Loan Disclosure and Stock Surge Under SEC Investigation
Dave Michaels and Theo Francis – WSJ
The Securities and Exchange Commission is investigating the circumstances around Eastman Kodak Co. ‘s announcement of a $765 million government loan to make drugs at its U.S. factories, according to people familiar with the matter. News of the loan last week caused Kodak’s shares to rise as high as $60, before falling to about $15 on Monday due to a dilution in the shares. Amid the heightened volatility, trading volume has surged. The price spike briefly produced a potential windfall for company executives who owned stock-option grants, some of which were granted on July 27, the day before the loan was officially announced.
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CME Settles Lawsuit With Regulator Over Leaks by Former Employees
Alexander Osipovich – WSJ
Futures-exchange operator CME Group Inc. has agreed to pay a fine of up to $4 million to settle a long-running lawsuit with its regulator over accusations that former exchange employees leaked confidential trading information. The Commodity Futures Trading Commission brought the case in 2013 against a CME unit, the New York Mercantile Exchange, and two former employees of the unit, known as Nymex. The CFTC accused the former employees of disclosing private information on client activities to a commodities broker in return for meals and entertainment. The regulator later added the broker as a target of its civil lawsuit.
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Exchanges and Clearing

Trading Floor Access Reminders for Reopening of Eurodollar Options Pit August 10, 2020
CME Clearing
CME Group has published access reminders for the trading floor community ahead of the reopening of our Eurodollar Options Pit on www.cmegroup.com/info. This document can be accessed by clicking here.
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Exchange traded products derivatives
Eurex Exchange
Since the European ETF market has grown substantially, Eurex Exchange has established the broadest choice of ETF Derivatives in Europe.
Futures and options on the most successful ETFs of the providers iShares and db-xtrackers are tradable at Eurex Exchange.
The Equity offering consists on European underlying indexes like ETFs on EURO STOXX 50 Index, DAX, SMI, STOXX Europe 600 or MSCI Europe but also on iShares ETFs on S&P500 as well as on FTSE 100.
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Shorter market hours bid hits wall as Euronext rejects proposal
Hayley McDowell – The Trade
Pan-European exchange operator Euronext has said it has no intentions to modify the hours of its markets following an industry consultation on the proposal to reduce the trading day. The development will come as a blow to many market participants who have made the case that shorter market hours will boost intraday liquidity, drive diversity in the industry, and improve the wellbeing and mental health of traders.
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Regulation & Enforcement

CME Settles Lawsuit With Regulator Over Leaks by Former Employees
Alexander Osipovich – WSJ
Futures-exchange operator CME Group Inc. has agreed to pay a fine of up to $4 million to settle a long-running lawsuit with its regulator over accusations that former exchange employees leaked confidential trading information.
/jlne.ws/3khNV7y

Technology

CCP12 PRIMER ON CREDIT STRESS TESTING August 2020
CCP12
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Events

Resilience and adaptability: The key to meeting the new challenges for ETD markets in Asia-Pacific
FIA.org
12 August 2020 • 9:30 AM – 11:00 AM SGT • Webinar
2020 has been an unprecedented year in the history of the exchange traded derivatives industry. With organizations facing unique and wide ranging challenges during the global pandemic and its impact on global markets, we seek to gather the insights from regional CCPs and other industry leaders to discuss what worked well, what could be improved, and what is needed to ensure the safety and security of markets in the future.
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Miscellaneous

It’s The Volatility, Stupid
Burkekoonce – The Street
As Americans of a certain age might remember, Bill Clinton’s presidential campaign had a tendency at first to wander off message. To keep the candidate and the campaign focused, Clinton’s strategist James Carville installed a whiteboard in the middle of the campaign’s headquarters that simply read, “It’s the economy, stupid.” Carville was able to keep the campaign focused on the economy, which had faltered under the incumbent, George H.W. Bush, and Clinton pulled off the upset.
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