Commentary & Insight
Jack Schwager on Market Wizards and How the CTA Space is Changing
Jack Schwager is a well-known name in the financial market community today, as author of trading classics such as: Market Wizards in 1989, The New Market Wizards in 1992 and Stock Market Wizards in 2001. He’s added to the series in May 2012, with Hedge Fund Market Wizards, and more recently released book Market Sense and Nonsense, where he explores investment models and the theories of how markets work.
He spoke with JLN editor-in-chief Jim Kharouf about hedge fund managers and how the CTA space has changed, what’s happened to managed futures since its breakout year in 2008 and his opinion of just how much growth is left for CTA sector.
Schwager, who is currently a co-portfolio manager at ADM Investor Services, helps manage ADM’s Diversified Strategies Fund, a portfolio of futures and FX managed accounts. The fund combines both system and discretionary managers that use technical and fundamental strategies.
Exclusive: ICE to win EU approval for $8.2 billion NYSE bid – sources
Foo Yun Chee, Reuters
IntercontinentalExchange (ICE) is set to win unconditional EU approval for its $8.2 billion bid for NYSE Euronext, sources said on Monday, in a deal that would strengthen its presence in the lucrative derivatives trading business.
How CBOE’s new boss differs from the old boss
By Lynne Marek – Crain’s
Edward Tilly, who took over as CEO of CBOE Holdings Inc. last month, has had a vastly different career path than his predecessor, Bill Brodsky. While few expect him to make major changes in the company’s direction, there could be day-to-day differences, particularly in how he handles the newly sensitive topic of regulation.
** Ed Tilly is no Bill Brodsky or John Lothian for that matter. But he is one very good CEO and a terrific communicator. -JL
Interactive Brokers’ Magic Moment
Steven M. Sears, Barron’s
The fate of the online broker’s market-making unit Timber Hill will be decided soon. Bet on CEO Thomas Petterffy making a profitable move.
End of Easing Spurs S&P 500 Gains of 16% as Economy Grows
Whitney Kisling, Bloomberg
More than $500 billion wiped off the value of U.S. stocks is providing opportunities for investors who remember that equities tend to rise when the Federal Reserve begins reducing efforts to stimulate the economy.
Hedge Fund Flows a Shade Weaker
Brendan Conway, Barron’s
Hedge-fund investors took their collective foot off the gas in April, according to the latest data from BarclayHedge and TrimTabs Investment Research.
Derivatives clearing kicks off without a hitch
Mike Kentz, Reuters
The second phase of the Dodd-Frank clearing mandate launched this week without any major hitches, something of a surprise amid market-wide concerns that buyside firms would not be ready in time.
The VIX and the Pre-FOMC + Post-FOMC Trades
Vix and More
Back in December 2008, in VIX Trends Around FOMC Announcement Days, I posted a chart of the average movements in the VIX in the ten trading day leading up to and following “Fed Days,” otherwise known as days in which the Federal Open Market Committee (FOMC) makes its policy statement announcement.
VIX Is Finally Interesting Again
Anyone who has been following VIX and VIX-related ETFs over the past year knows that these instruments have been decimated.
Nasdaq targets fixed income growth
Two years ago, cross-border mega mergers between exchanges were all the rage. Following the failure of most proposed deals in the face of competition concerns and thinly veiled protectionism, cash rich exchanges with an appetite for acquisitive growth have altered course. In today’s market, an exchange deal is more likely to be strategic, targeting a new service or asset class rather than economies of scale or global reach.
** I would swap fixed income growth for variable income growth. -JL
CFE Modifies Pricing For S&P 500 Variance Futures Contract
Press Release (CBOE)
CBOE Futures Exchange, LLC (CFE) on Monday, June 24 will revise the pricing method for its S&P 500 Variance (VA) futures contract, which began trading on CFE in December 2012. The change involves the timing of when CFE converts volatility points to futures prices so that the prices of VA futures are more directly comparable to prices in the over-the-counter (OTC) variance swap market.
IntercontinentalExchange Sets Daily Record for Combined Agriculture and Financial Product Set; New Daily Record for ICE Russell 1000 Growth Index
Press Release (ICE)
IntercontinentalExchange, a leading operator of global markets and clearing houses, today reported a record daily volume in agriculture and financial contracts traded on ICE Futures U.S. of 889,193 contracts on June 13. The previous daily volume record was 851,852 on June 12, 2012.
CFTC Charges North Carolina Resident James A. Shepherd and James A. Shepherd, Inc. with Commodity Pool Fraud
Defendants charged with fraudulently soliciting approximately $10 million from approximately 176 investors and misappropriating and commingling at least $4.45 million of the pool’s funds
Rigged-Benchmark Probes Proliferate From Singapore to UK
Matthew Leising, Bloomberg
The probe of Libor manipulation is proving to be the tip of the iceberg as inquiries into assets from derivatives to foreign exchange show that if there’s a chance to rig benchmark rates in world markets, someone is usually willing to try.
TABB Says Sell-Side IT Spending in Risk Management will Rise in 2013 But Sees Need for Risk Discovery Tools
Press Release (via Yahoo Finance)
As sell-side firms continue cutting their IT spend in 2013, TABB Group says risk management is one of only two categories where spending is estimated to actually increase from 2012 levels, the other being pricing and reference data.
** Relevant: In case you missed it be sure to watch our video with Julie Dixon of Titan Regulation discussing compliance with the rule that places risk management controls on any broker-dealer that offers direct trading access. -JB
The Fed Trade
Steven M. Sears, Barron’s
This options trade will be profitable if Ben Bernanke can calm the markets on Wednesday.
Minis: Dos and Don’ts
Steve Claussen, OptionsHouse
While minis are listed with the same strike prices as the standard options, another way of thinking about the deliverable of 10 shares instead of 100 is the 10 share mini contracts are essentially the option exchanges splitting the stock shares 10:1.
When Should You Trade Weekly Options?
Joshua Belanger, MoneyShow.com
One of the biggest changes in recent years has been the advent and growth of weekly options on the major option exchanges, and option trader Joshua Belanger of OptionSizzle.com details four great ways to use these versatile instruments.