Exchange operator Cboe tops profit view, grows footprint
John Mccrank and Niket Nishant – Reuters
Cboe Global Markets Inc on Friday reported second-quarter earnings above Wall Street expectations, helped by both transactional and non-transactional revenues from the exchanges it operates around the globe, ahead of more overseas expansion.
‘Volatility Is Opportunity’: How The Agriculture Sector Is Responding Positively To Climate Change
Sam Corey – Markets Insider
The American west is burning.
Over 2.77 million acres that have gone up in flames so far this year, or about 800,000 more acres than had burned at the same time in 2020, Vox reported.
Heatwaves in the U.S. have spread across the American south, west and southwest, with expected temperatures to reach 100 degrees in the Dakotas and Montana, and even higher in Arkansas, Missouri and Oklahoma.
Investors Lose $1 Trillion in China’s Wild Week of Market Shocks
It began with a record crash in Chinese stocks on Wall Street and only got crazier from there.
The nearly $1 trillion selloff ignited by Beijing’s shock ban on profits at tutoring companies has triggered a new round of soul searching about the investment case for Chinese assets in the Xi Jinping era.
Chinese Stocks’ Crash Offers a Harsh Tutorial
Reshma Kapadia – Barron’s
It took a while, but early last week investors recognized the increased risk embedded in Chinese stocks, after they tumbled in reaction to regulators’ latest focus: after-school tutoring companies. The losses slowed later in the week as Beijing tried to calm markets. But, as we’ve warned (“Some China Stocks Could Vanish From the U.S. What to Know,” July 16), the risks will remain elevated until more clarity on China’s regulatory push emerges.
Chinese ructions test the buy-the-dip reflex of investors
Katie Martin – Financial Times
Whatever the shock to markets, equity investors have a strong impulse: buy the dip. The latest ructions relating to China’s apparently poorly anticipated crackdown on foreign-listed shares could test this reflex.
The buy-the-dip muscle memory is strong. One after the other, potential hits this year have proven to be passing hiccups. An explosion of retail trading fervour at the start of 2021 provided lively entertainment and posed some tough questions around the everyday punter’s access to public markets. However, it left the rest of the investor community largely unscathed.
Bitcoin Drops After $1.6B Monthly Options Expiry
The “max pain point” for the July expiry was $35,000.
Omkar Godbole – Coindesk
Bitcoin faced selling pressure on Friday after Deribit, the world’s largest crypto options exchange by volume and open interest, settled monthly options contracts worth $1.6 billion.
The cryptocurrency slipped from $39,800 to $38,500 after 08:00 UTC (4 a.m. ET), the designated settlement time on Deribit. A total of 41,000 contracts expired, of which 22,000 were calls options, and the rest were put options, according to Deribit data.
Cboe Global Markets Issues Notification on Spot Volatility Indices
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced that the company recently discovered instances where the spot Cboe Volatility Index (VIX Index) calculation differs from the calculation described in the VIX White Paper, which details the formula used for deriving values related to the VIX.
The spot VIX Index is disseminated in 15 second intervals and is not a tradable product. In certain instances, an index level was not produced at the applicable interval, resulting in the dissemination of the prior index value. Cboe is investigating the degree of impact and the number of instances with respect to which the redissemination occurred. Based on the company’s initial assessment, Cboe believes that, in the vast majority of cases, the current VIX Index calculation yielded the same result as provided in the VIX White Paper.
Cboe Global Markets Reports Results for Second Quarter 2021
Cboe Global Markets
Second Quarter 2021 Highlights*
Diluted EPS for the Quarter of $0.98, Down 5 percent
Adjusted Diluted EPS¹ for the Quarter of $1.38, Up 5 percent
Net revenue for the Quarter of $351 million, Up 18 percent
Returned $79 million to shareholders through share repurchases and dividends
The company increases its 2021 organic growth target for recurring non-transaction revenue to 12 to 13 percent, from its previous guidance range of 10 to 11 percent²
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the second quarter of 2021.
“In the second quarter we achieved strong year-over-year revenue growth driven by robust trading in our proprietary index products and demand for our data and access solutions products. With the closing of our acquisition of Chi-X Asia Pacific on July 1, we further solidified our strategic vision of building one of the world’s largest global derivatives and securities networks. With the addition of Chi-X to the Cboe network, we are eager to leverage our strong ecosystem of proprietary index products and data and access solutions to reach an expanding global network of customers,” said Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer.
ICE Reports Record Futures Open Interest of 48 Million Contracts; Record liquidity across diverse asset classes
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced record total futures open interest of more than 48 million contracts on July 27, 2021. Open interest across ICE’s global environmental complex hit a record 2.86 million contracts across futures and options on July 27, up 21% year-over-year (“y/y”), reflecting the importance of these markets in pricing climate risk. As part of this, the North American environmental complex hit record open interest of 1.13 million contracts on July 27 across futures and options. The number of participants trading ICE’s global environmental markets increased by almost 30% over the past year.
NYSE Pillar Options Migration: Upcoming Weekend Testing Opportunity on August 7, 2021, Arca Options Pillar Prod Shadow
On Saturday, August 7, 2021, NYSE Arca Options (the “Exchange”) will offer the second weekend Pillar Options Production testing opportunity in preparation for its migration in November 2021, pending effectiveness of rule filings. Participants wishing to participate in the August 7th test must register with firstname.lastname@example.org by Thursday, August 5, 2021; registrations received after this date will be processed on a best-efforts basis. A test script will be provided upon registration.
Regulation & Enforcement
U.S. House advances bills to address Archegos, GameStop turmoil
Pete Schroeder and Svea Herbst-Bayliss – Reuters
Wealthy families that set up investment funds known as “family offices” to manage their personal wealth would face stricter oversight from U.S. regulators under a bill advanced by a U.S. congressional panel late on Thursday.
The bill was among 11 that lawmakers hope will address failings highlighted by March’s meltdown of family office Archegos Capital which led to billions of dollars in losses for some banks and January’s GameStop saga.
Jon Najarian Sees Unusual Options Activity In Rio Tinto And Workhorse
Craig Jones – Markets Insider
On CNBC’s “Fast Money Halftime Report,” Jon Najarian said anything in the mining sector is ripping on Thursday and Rio Tinto (NYSE:RIO) is not an exception. He noticed a purchase of 10,000 contracts of the January $96.57 calls in Rio Tinto in the first half of the trading session.
Readers Find Some Weird Winners
Most of the time, I find flaws in offbeat investments with high distributions. But sometimes oddities have their day of glory.
Jeffrey R. Kosnett – Kiplinger
Bond rates are plunging, banks pay next to nothing, and stocks are so rich that the S&P 500 Index yields a paltry 1.4%.
My mailbox is thus brimming with queries about offbeat, high-distribution investments. Many are leveraged funds, rely on options and futures trading, or extend high-rate loans to less-creditworthy borrowers. Some augment regular income payments with periodic returns of capital.
Why stock market investing today is like flying in the 1950s
Akin to travelling by plane mid-century, investors today are experiencing long periods of intense boredom separated by short periods of sheer terror. And the ride is likely to persist
Richard Harris – South China Morning Post
Most stock markets indices don’t want to go down. For a Hong Kong dollar investor, Mumbai is up 111 per cent since the Covid-19 low, the S&P 500 is up 103 per cent, Europe 89 per cent, and Tokyo 73 per cent.
But, as they say in football, it has been a game of two halves. The Shanghai and Hong Kong stock markets have seen a relatively derisory rise of 45 and 22 per cent respectively, making them among the few markets not to exceed their pre-Covid-19 highs.
Robinhood Working on Feature to Let Users Invest Spare Change
Mark Gurman and Annie Massa – Bloomberg
Robinhood Markets Inc. is exploring new features that would let customers invest spare change and better protect against volatility in cryptocurrency trading, according to code hidden inside a test version of the company’s iPhone app.
U.S. Crypto Traders Evade Offshore Exchange Bans
Alexander Osipovich – WSJ
Americans are circumventing bans intended to stop U.S. customers from accessing overseas cryptocurrency exchanges, new research suggests.
A report released Friday found that hundreds of Americans are trading risky crypto derivatives on offshore exchanges such as FTX and Binance. The report sheds light on an open secret in the industry: U.S. crypto enthusiasts can easily bypass measures that seek to block them from offshore exchanges.
Binance Blocks Derivatives Trading in 3 European Countries, More to Follow
Popular cryptocurrency exchange Binance has announced that it is halting support for cryptocurrency futures and options trading in three European nations – Germany, the Netherlands, and Italy.
Binance noted in a blog post today that the move is part of an effort to evaluate its products and offerings to better serve its clients globally.