Forex broker TFS-ICAP fined £3.4m for misleading clients; Funds, index traders carrying big longs in CBOT corn and soybeans

Nov 23, 2020

$16,111/$300,000 (5.4%)
Elizabeth Gisch

Lead Stories

Forex broker TFS-ICAP fined GBP3.4m for misleading clients
Matthew Vincent – FT
A foreign exchange derivatives broker has been fined GBP3.4m by the UK financial regulator for giving clients misleading information over a period of seven years to encourage them to trade. On Monday, the Financial Conduct Authority imposed the penalty on TFS-ICAP — a brokerage formed in 2000 through the merger of the over-the-counter forex options divisions of TFS Group and ICAP plc — for a practice known as “printing trades”. Printing involves a broker telling clients that a trade has been executed at a particular price or order size when no such trade has in fact taken place — to encourage clients to place their own trades, generating income for the broker.

Funds, index traders carrying big longs in CBOT corn and soybeans
Karen Braun – Reuters
Speculators have maintained heavily bullish bets in Chicago-traded corn and soybeans for at least a month now as the supply picture grew significantly tighter than anyone expected. But other market participants have also been very active lately, adding to the overall optimism.

Another bullish factor for the S&P 500: strong seasonal trends come with Thanksgiving turkey
Lawrence G. McMillan – MarketWatch
The broad stock market, as measured by the S&P 500 index, finally reached a new all-time closing high last week, at 3,626 on Tuesday. It was unable to challenge the all-time intraday high at 3,644, where the index traded on the huge upside opening gap on Nov. 9 (on the positive Pfizer COVID-19 vaccine news). But a strong positive seasonality begins with the trading day after Thanksgiving and lasts in the beginning of the new year, so — while it doesn’t happen every year (remember 2018?) — it is another bullish “wind” blowing the market along.

As Western Union Ends US-Cuba Transfers, Cubans Eye Bitcoin Options
Jeff Benson – Decrypt
Western Union is ending money transfers from the US to Cuba.
It said it was doing so due to US sanctions.
With traditional remittance venues cut off, Cubans could turn to Bitcoin.
After this weekend, Americans will no longer be able to transfer money to Cuba via Western Union.
The money transfer service, which dominates the remittance industry with a market cap of nearly $9 billion, says it is pulling services due to US sanctions against Cuba’s communist government.

Exchanges and Clearing

Amendments to the Termination of Trading Rule of Four (4) European Natural Gas Option Contracts
CME Group
Effective Tuesday, December 8, 2020, for trade date Wednesday, December 9, 2020, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “the Exchange”) will amend the Termination of Trading rule of four (4) European natural gas option contracts (the “Contracts”) in the table below to align the Contracts’ last trade date (“LTD”) with current over the counter market practices.

The London Metal Exchange: Options discussion paper
The London Metal Exchange (LME) issued a market-wide discussion paper on plans to simplify and standardise some areas of its options market structure in order to support the development of its electronic options market.

MIAX PEARL Equities Completes Rollout of All NMS Symbols
Miami International Holdings
Miami International Holdings, Inc. (MIH), the parent holding company of MIAX, MIAX PEARL and MIAX Emerald securities exchanges (collectively, the MIAX Exchange Group), today announced that MIAX PEARL Equities completed its rollout of all NMS symbols on November 20, 2020. MIAX PEARL Equities launched live trading on September 29, 2020, with the symbol NTGR, and took a phased approach to adding additional symbols since that time.

MIAX Exchange Group – Options Markets – Telefonica Brasil S.A. (VIV) Non-Tradeable effective for 11/23/2020
MIAX Options
The entire option class of Telefonica Brasil S.A.(VIV) has been made non-tradeable on the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchanges effective for today, Monday, November 23, 2020. All GTC orders resting on the MIAX order books in VIV will be canceled.

Effective November 23, 2020 through November 27, 2020, MIAX Options and MIAX Emerald 2X Opening and Intraday Valid and Priority Quote Spread Relief in All Symbols
MIAX Options
Issue Symbol: All Symbols
Multiplier: 2X
Reason: In maintenance of a fair and orderly market.
Time: Opening and Intraday
Subject Summary: Please be advised, effective November 23, 2020 through November 27, 2020, the MIAX Regulation Department has granted 2 times opening and intraday quote parameter relief for all symbols on MIAX Options and MIAX Emerald.

MIAX Exchange Group – Options Markets – Corporate Action Alert: Tempur Sealy International, Inc. (TPX)
MIAX Options
Tempur Sealy International, Inc. (TPX) has announced a 4 for 1 stock split. Associated strike price adjustments will become effective on Tuesday, November 24, 2020. TPX options will continue to trade without interruption on the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange. All GTC orders resting on the MIAX order books in TPX will be canceled at the close of business on Monday, November 23, 2020. Additional details about the Tempur Sealy International, Inc. (TPX) stock split are provided in the attached OCC Memo.

Expansion of the Listing Schedule of Monthly Options on Euro/US Dollar and Japanese Yen/US Dollar Futures Contracts
CME Group
Effective Sunday, January 10, 2021, for trade date Monday, January 11, 2021, and pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will expand the listing schedule of monthly options on the Euro/US Dollar (“EUR/USD”) futures contract and the Japanese Yen/US Dollar (“JPY/USD”) futures contract (the “Contracts”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission for clearing via CME ClearPort as noted in the table below.

Regulation & Enforcement

FCA fines TFS-ICAP GBP3.44 million for market misconduct
The Financial Conduct Authority (FCA) has fined TFS-ICAP Ltd, an FX options broker, GBP3.44m for communicating misleading information to clients.


Options Building Blocks: Why Should Investors Consider Covered Calls and Cash-Secured Puts?
Alex Coffey – The Ticker Tape
Nothing is certain in the financial markets. If we’ve learned anything in 2020, it’s that earnings, interest rate decisions, political events, pandemics, and other events can all lead to market volatility. And when markets are volatile, investors might be concerned about large swings in their portfolios. Fortunately, there are options strategies that can help reduce a portfolio’s volatility—and do more.
If you don’t have much experience trading options, two strategies that could help generate additional income, achieve a higher probability of success, and reduce volatility of returns are:
Selling covered calls
Selling cash-secured puts
In many ways, these two strategies are similar in terms of their risk/reward profile. Both limit potential upside in exchange for a higher probability of success by lowering break-even price points. But there are also some key distinctions.


Asia Derivatives Conference
Join us virtually in December!
1 December 2020 – 3 December 2020 • 9:00 AM – 3:00 PM SGT Daily
Our annual Asia Derivatives Conference provides unique opportunities for the cleared derivatives community to build an understanding of how global forces and regional trends and issues are shaping Asia-Pacific markets. Register now and join us virtually, 1-3 December, to gain insights into what’s on the horizon for the Asia-Pacific region.


(Podcast) Volatility Views 424: A Heavy Weight On Volatility
Options Insider Podcast

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