Observations & Insight
The FIA along with SIFMA’s Asset Management Group is hosting its annual Asset Management Derivatives Forum in February at The Ritz-Carlton Laguna Niguel in Dana Point, California. It is an opportunity to meet with market participants from all sides of a trade to examine the latest developments impacting the use of derivatives by asset managers. The hotel block at the Ritz-Carlton runs out on Friday, January 14. You can go here to register and receive booking information. ~SR
Europe’s Energy Crunch: World’s Top Exchanges Are Benefiting
Isis Almeida and Jesper Starn – Bloomberg
Gas and power traders are flocking to exchanges as energy companies seek to protect themselves from the risk of others collapsing.
With volatility climbing to record levels, the share of European gas traded on the Intercontinental Exchange Inc., the European Energy Exchange and CME Group Inc. ballooned to about 80% at the end of last year, according to data compiled by price-reporting service ICIS. That’s up from almost 50% just a year earlier and about 40% at the end of 2019.
Nowhere near ‘new normal’ – whatever that is
Mike Dolan – Reuters
Bet all you like on how a post-COVID-19 world might shape up but the global economy remains far from any state of normality as we enter 2022.
Some of the biggest hedge fund winners of 2021 were names you’ve never heard of. Check out the under-the-radar names behind last year’s most jaw-dropping gains.
Bradley Saacks – Markets Insider
Hedge fund behemoths get the lion’s share of the attention and assets, but there are dozens of under-the-radar managers — some with long-running nuanced strategies and some just getting off the ground — that also deserve a spotlight.
It was a mostly positive year for hedge funds despite a retail-investor driven short squeeze and inflation concerns. The average manager, according to Hedge Fund Research, made around 8% through November.
Exchange-Listed Derivative Volumes Boom in 2021
Shanny Basar – Markets Media
Cboe Global Markets had record yearly options volume in 2021 while CME Group reached an all-time high average daily volume during the year.
Cboe reported that total options volume for 2021 was three billion contracts, the highest yearly volume on record, and 19% more than in the previous year.
HKEX Finalises Operational Model for Derivatives Holiday Trading
Strong market support for operational model for Derivatives Holiday Trading; Holiday trading planned for April 2022; launch to cover Easter holidays, subject to market readiness and regulatory approval; HKEX’s MSCI futures and options contracts will be the first batch of holiday trading products
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Thursday) pleased to announce it has finalised the operational model for non-Hong Kong Dollar (HKD) denominated futures and options trading and clearing services on Hong Kong public holidays (Derivatives Holiday Trading).
TradeStation Crypto Offers Bonus for New Crypto Accounts
TradeStation, an award-winning*, self-clearing online brokerage for trading stocks, ETFs, options, futures and cryptocurrencies, announced that new TradeStation Crypto customers will be awarded $10 in a supported cryptocurrency after opening a TradeStation Crypto account, which provides full access to the TradeStation Crypto web trading platform and mobile app. The new offering reinforces TradeStation’s continued commitment to delivering market access and providing innovations that allow for increased participation in the growing cryptocurrency marketplace through TradeStation Crypto.
DGCX closes 2021 with a total value traded worth of around USD 150 billion
Dubai Gold & Commodities Exchange
The Dubai Gold & Commodities Exchange (DGCX), the largest and most diversified derivatives exchange in the Middle East, today reported its full-year market statistics. During 2021, the exchange recorded a yearly AOI a sum of 1,985,584 contracts and traded 7,076,350 contracts during the year – with the total value of the contracts amounting to USD 149.676 billion. The DGCX’s best performing product in 2021 was its Indian Rupee Options (DINRO) Futures Contract, which traded up 1,233% year-on-year (Y-O-Y).
Regulation & Enforcement
Facilitator of Smart Contracts Protocol Fined $1.4 Million by CFTC for Purportedly Enabling Unregistered Events-Based Binary Options Trading Platform
Gary DeWaal – Katten
Blockratize, Inc., d/b/a Polymarket, the owner of a website through which customers access smart contracts on the Polygon blockchain to place “winner-take-all” bets on enumerated future events, settled charges brought by the Commodity Futures Trading Commission for purportedly offering binary options — a form of swaps — without being registered as one of two forms of a trading facility as required by law — either as a designated contract market or a swap execution facility. As reflected in a CFTC order announced on January 3, 2022, Polymarket agreed to pay a fine of $1.4 million to resolve the CFTC’s allegations, as well as to cease offering products that do not comply with applicable law by January 14, 2022.
Markets Are About to Face Off With the Fed. How to Play It.
Steven M. Sears – Barron’s
There is always a bull market. The trick is trying to find it.
Let the pundits wrestle with Wednesday’s sharp decline in the stock market. For serious investors, time and energy are better spent focusing on what may happen next—and positioning in advance of the move.
How to Invest in Stocks in 2022: Growth Vs. Value, Large Vs. Small Cap
Lisa Kailai Han – Business Insider
As the world heads into year three of the pandemic, it seems like the stakes are higher than ever for investors.
As equities soared to breathtaking heights on the back of easy monetary policy over the past two years, all investors had to do was let the rising tide lift them to impressive gains. The S&P 500 finished 2019 up almost 29%, despite the pandemic-induced
it managed to return over 16% in 2020, and in 2021 the economic recovery sent the index up nearly 27% — with the entire market that hot for that long, investors didn’t have to be particularly choosy when building their portfolio in order to see strong returns.
The Hottest ETF Sectors for Investors to Bet On in 2022
Lori Ioannou – WSJ
Many investors are bracing for a more-volatile stock market this year as interest rates, inflation, the pandemic, geopolitical tensions, oil and supply-chain bottlenecks continue to cause uncertainty.
But those challenges also could give rise to opportunities in exchange-traded funds focused on specific sectors, some financial pros say.
Can The S&P 500 Keep Rising In 2022? The Short Answer Is Yes
The purpose of this article is to discuss some reasons for optimism on the S&P 500, and why further gains could continue for this index. On the backdrop of very strong years behind us, it is easy to contemplate taking some profit here. After all – stocks cannot always go up. While I certainly wouldn’t find fault with locking in some profit, I see multiple reasons why stocks could keep moving higher in the near term. This means that while I am building cash, it is many through selling some fixed-income positions and raising cash by not investing fresh funds. I am resisting the urge to sell my current holdings because there are tailwinds on the horizon that could push stocks higher still, making me reluctant to trigger taxable gains at this juncture.
Hedge Fund Conferences Are Back With Speakers Like Marc Lasry and Derek Jeter
Alyson Velati – Business Insider
Hedge fund managers and investors will soon be packing their bags and heading to the Sunshine State as conference season heats up.
After two years of virtual events, webinars, and Zoom fatigue, a slew of alternative investment events are set to begin — and they will all be mostly in-person this year, despite an explosion of coronavirus cases due to the Omicron variant.