JLN Options: EU Seeks Broad Transaction Tax to Curb Rules ‘Patchwork’

Feb 15, 2013

Lead Stories

EU Seeks Broad Transaction Tax to Curb Rules ‘Patchwork’
Rebecca Christie, Bloomberg
The European Union proposed a tax on financial transactions that could be collected worldwide as soon as the start of next year by the 11 EU nations that have so far signed up to participate.
The proposal, which marks a new stage in the EU’s efforts to raise revenue from the financial industry, came under immediate fire.

S.E.C. Looks at Trades a Day Before Heinz Deal
Ben Protess, Dealbook
Regulators are scrutinizing unusual trading surrounding the planned $23 billion takeover of the food company H. J. Heinz, raising questions about potential illegal activity in one of the biggest deals in recent memory, a person briefed on the matter said.

Equity Volatility Plunges To 17 Year Low
Zero Hedge
It is perhaps no surprise that VIX has dropped to new six year lows today as the volatility of the underlying equity market has now been repressed to its lowest point is 17 years. Not since 1996 has short-term realized volatility been this low.

Wall Street Setting Itself Up For Next Derivatives Crisis, Market Participants Warn
Eleazar David Melendez, Huffington Post
A crucial change in the way financial derivatives are packaged and sold on Wall Street is enabling traders to bypass new regulations aimed at limiting reckless speculation, enhancing the prospect of another derivatives crisis, warn some market participants.

Currency Fear Gauges Go Flat
Matthew Walter, The Wall Street Journal
Currency investors may be finally ready to accept that the world economy isn’t going to implode, even in the long run.

Icahn Ups Stakes in Ackman Feud With Herbalife Holding
Duane D. Stanford & Miles Weiss, Bloomberg
It turns out billionaire investor Carl Icahn really is bullish on Herbalife Ltd., a position that shows he’s serious about squeezing rival hedge-fund manager Bill Ackman.

Revisiting the Good, the Bad, and the Ugly of VIX Trading
The VIX has provided us with some great trading profits over the past six months, but volatility linked exchange-traded products remain a risky venture. We prefer using VIX options to hedge rather than hit-and-miss ETPs.

Why High Frequency Trading is Not a Problem
Eric Falkenstein, Wall Street Pit
Many people are concerned about the fact that some people can trade more frequently than they can due to having a large infrastructure of high speed computers and connections to various exchanges.  It all seems like regular people can get ripped off, and so some kind of governor is need via transaction taxes, or some limiter on the trade frequency.


ISE Receives “Most Innovative Exchange Technology – Options” Award at Wall Street Letter 2013 Institutional Trading Awards
Press Release (ISE)
The International Securities Exchange (ISE) announced today that it received the “Most Innovative Exchange Technology – Options” award at the Wall Street Letter 2013 Institutional Trading Awards. Winners were determined by a panel of independent judges who evaluated the company’s level of innovation as it related to exchange technology. ISE’s 2012 technological enhancements included significant upgrades to PrecISE Trade® and OptimiseTM, the introduction of Implied Order Functionality, several key enhancements to improve risk management, and much more.
http://jlne.ws/11L7hrd (PDF)


Regulators Urged to Focus on Dodd-Frank Before Too-Big-to-Fail
Cheyenne Hopkins, Bloomberg
U.S. regulators should focus on finishing work on the 2010 Dodd-Frank Act before considering whether the law does enough to end too-big-to-fail, Senate Banking Committee Chairman Tim Johnson said at a hearing today.

Regulator Probes Dark Pools  
Scott Patterson, The Wall Street Journal
Regulators are diving deep into “dark pools.”
The Financial Industry Regulatory Authority in late 2012 sent examination letters to about 15 dark-pool operators seeking information such as how the trading systems handle customer orders, what they disclose to clients and whether affiliates of the pool operators have access to client trading information. In dark pools, investors post buy-and-sell orders away from the public market

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