JLN Options: Europe plans major scaling back of financial trading tax

May 30, 2013

Lead Stories

Europe plans major scaling back of financial trading tax
John O’Donnell and Ilona Wissenbach, Reuters
European countries plan to scale back a proposed financial transactions tax drastically, initially imposing a tiny charge on share deals only and taking much longer than originally intended to achieve a full roll-out.
http://jlne.ws/ZvXcO1

Letter to the Editor [From Gina McFadden, President of The Options Industry Council, to The New York Times]
Gina McFadden, OIC
I was very disappointed to read “Growth in Options Trading Helps Brokers but Not Small Investors,” (Business Day, May 24) as it was very short on facts but long on opinion.
To make his case that options do not benefit individual investors, the reporter relies primarily on some former TD Ameritrade employees who have started their own business to fix the “problem” they discuss, an outdated Dutch study (Dutch?!) and stat from SigFig that raises more questions than it answers.
http://jlne.ws/15aCRNf

Risk Aversion Puts Hedge Funds Behind S&P 500: Chart of the Day
David Wilson, Bloomberg
Hedge funds are paying a price for being too hesitant to buy stocks in the midst of a four-year bull market, according to Barry Ritholtz, FusionIQ’s chief executive officer.
http://jlne.ws/12RVJhH

You must make a friend of volatility 
Bengt Saelensminde, MoneyWeek
The monstrous rally in equity markets was called to a rather sudden halt last week with talk that certain members of the Fed were suggesting reining in the quantitative easing (QE) stimulus plan. They’re calling it ‘tapering’, or trimming down central bank money creation. And it upset the market.
http://jlne.ws/12ROnuG

CME Group, home to bets on Fed policy, scrambles to keep watch
Ann Saphir, Reuters
These days, it seems, everyone is trying to keep up with shifting market expectations for the Federal Reserve’s monetary policies. CME Group’s Fed Watch, which delivers a snapshot of those expectations based on futures tied to the Fed’s target for short-term rates, is no exception.
http://jlne.ws/12RRx1m

Risky derivatives make return for returns’ sake
Francesco Canepa, Reuters
Investors facing record low bond yields are increasingly chasing higher returns via complex derivatives, the instruments at the root of the 2008 global financial crisis, which can punch yawning holes in balance sheets if they go awry.
http://jlne.ws/12RWtDr
** Nothing to see here.  Move along. -JB

Charlie Sheen and The Myth That Won’t Go Away
Russell Rhoads, CBOE
Truth or fiction?  On this day in 2008 Charlie Sheen married socialite Brooke Mueller.  This is true.
Truth of fiction?  90% of options expire with no value.  This is FICTION.
http://jlne.ws/12RT1so

Exchanges

ISE Trades 15 Millionth Contract through Implied Order Functionality
Press Release (ISE)
The International Securities Exchange (ISE) today announced that trading of multi-legged strategy orders through its Implied Order* functionality has exceeded 15 million contracts. Since ISE launched Implied Order functionality in May 2012, it has accounted for approximately 10 percent of all non-crossing, multi-legged contract volume executed on ISE.
http://jlne.ws/12kohFy (PDF)

World Federation of Exchanges Reports on High Frequency Trading (HFT)
Press Release (World Federation of Exchanges via Yahoo Finance)
The World Federation of Exchanges (WFE) today released a review on High Frequency Trading (HFT), describing it as a technology that financial firms are embracing around the world. Besides, the study notes the many initiatives and risk management practices that exchanges have adopted to enhance the safety, stability and integrity of the markets.
http://jlne.ws/12RUuz9

Regulation

CFTC faces ‘huge challenge’ in analysing swap data, says O’Malia
Alexander Osipovich, Risk Magazine
The US Commodity Futures Trading Commission (CFTC) must drastically improve its technical capabilities in order to analyse the trading data it is now collecting in accordance with the Dodd-Frank Act, or else it will be unable to fulfil its congressional mandate to oversee over-the-counter derivatives, warned commissioner Scott O’Malia.
http://jlne.ws/12kmksK

Volcker: U.S. Should Have Fewer Financial Regulatory Agencies  
Liz Moyer, The Wall Street Journal
Former Federal Reserve Chairman Paul Volcker said the U.S. doesn’t need six financial regulatory agencies and the current system has overlaps and loopholes that play into the hands of lobbyists.
http://jlne.ws/12RSgQh

Europe Seeks CFTC Delay in Imposing Swaps Rules on Banks
Jim Brunsden, Bloomberg
The European Union is urging the U.S. to allow time for international talks before it imposes swaps rules on EU lenders, saying that the current timetable would lead to the banks facing extra costs.
http://jlne.ws/Zgs5ni
** I do not think any timetable for any new regulation (good or bad) has ever been met. -JB

Technology

Mobility Meets BYOD: Trade U.S. Equity Options on Your iPhone or iPad 
Ivy Schmerken, Advanced Trader
Eyeing U.S. options traders who need speed, iVerit is offering real-time mobile data and professional analytics to consumers of Apple mobile devices.
http://jlne.ws/12RS43r
** No love for Android users. -JB

People

Nomura Hires Jarck as Co-Head Equity Index Trading
John D’Antona Jr., Traders Magazine
Nomura Securities International hired Tom Jarck as a managing director and co-head of equity index trading.
Jarck will be primarily responsible for trading sector indices, ETFs and VIX-related products. He will work alongside Jordan Farkas, who serves as the other co-head of equity index trading.
http://jlne.ws/12RW4Rn 

Strategy

Volatility’s History Hints at Short, Shallow June Correction: MKM
Brendan Conway, Barron’s
MKM Partners derivatives strategist Jim Strugger continues to believe the market has graduated from its post-financial crisis rockiness into a more “normal” period of muted volatility.
But he sees in the recent trend a reason to believe a “short and shallow correction” can’t be very far off.
http://jlne.ws/12RVnYm 

Events

Webinar Series – Are Options for Me?
OIC
Join The Options Industry Council on Wednesday, June 5, 2013, at 3:30 p.m. CT (4:30 p.m. ET) as we launch our new educational initiative, the OIC Webinar Series. Our first program, “Are Options for Me?” is a great place to start if you’re considering learning about options, but it’s also appropriate for a quick review or even for extra knowledge so you’re properly armed when speaking with your financial advisor.
http://jlne.ws/12RTY47
** If you read this newsletter it is a safe

bet options are for you.  Please pass this info along to anyone you know who might be interested.  OIC does a lot of education to help demystify options. -JB

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