FX options clearing a ‘big challenge’, warns NY Fed official
Joe Rennison – Risk Magazine
Central counterparties (CCPs) must prove they can settle foreign exchange options by physically delivering currencies even in stressed situations before the product can be considered for clearing under new regulation, a senior official at the Federal Reserve Bank of New York has warned.
Taper Already Worked Into Yields
Blu Putnam, Chief Economist, CME Group (via Dan Collins Report)
While the Fed has not yet announced plans to taper its asset purchases, the economy appears to be entering a new era for the Federal Reserve, and it raises some key questions about the future path of yields on Treasury securities. After feeling the need for extraordinary measures since 2010, despite steady, if not stellar economic growth and private sector job creation, the Federal Open Market Committee (FOMC) is grappling with when and how to exit its current quantitative easing (QE) program.
‘No Taper’ and the Impact on Broad Market ETFs
Zacks Equity Research
Yesterday marked an interesting chapter for the QE3 ‘taper tale’ as the Fed surprised markets by unexpectedly refraining from reducing its stimulus program. Consequently, it appears that as long as the Fed continues with its stimulus measures, Wall Street will continue to see big gains.
What the FOMC Did to Volatility
Jared Woodard – Condor Options
I’m attaching a cross asset volatility monitor that allows you to compare price and volatility changes across equity, commodity, and currency markets. After Wednesday’s post-Fed rally, several things stand out in the realm of option implied volatility.
If it ain’t broke, don’t VIX it
Timothy Edwards – Indexology
…In the past few years – characterized by alternating risk-on, risk-off dynamics – the VIX has been a remarkably effective proxy for optimism or fear across multiple international markets. Five years on there is growing evidence that investors’ formerly incontinent risk appetite is becoming more discriminating.
VIX ETF dives after Fed decides not to taper
Victor Reklaitis – MarketWatch
The largest ETF that provides exposure to the VIX dropped on Wednesday after the Federal Reserve opted not to taper its bond buys, disappointing investors betting on volatility.
Videocast: VIX calls losing value
NYSE Euronext Launches the NYSE Diversified High Income Index
Press Release (NYSE)
NYSE Euronext today announced the launch of the NYSE® Diversified High Income Index (NYDVHI), a new index designed to measure the performance of a broad, diversified basket of 138 publicly-traded securities that provide exposure to multiple asset classes, sectors and segments that historically pay high dividends on distributions.
REGULATION & ENFORCEMENT
Wall Street Defends Commodity Trades Against Regulatory Scrutiny
Silla Brush & Cheyenne Hopkins – Bloomberg
Banks including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM), facing regulatory scrutiny of their commodity trading, provide liquidity in oil, natural gas and other markets that can’t be easily replaced, according to a report commissioned by Wall Street’s main lobbying group.
**Wall Street sponsors a study that concludes Wall Street is necessary and should be left alone? Gee…never would have guessed that result (you can’t tell but I am rolling my eyes). -JB
Derivatives Regulators Risk Creating a ‘Mess,’ Wheatley Says
Ben Moshinsky – Bloomberg
Regulators in the European Union and U.S. must work together to harmonize rules requiring derivatives to be centrally cleared, or risk creating a “mess,” the U.K.’s top markets regulator said.
Fractal Position Management
Dan Passarelli – The Options Insider
…Traders must manage risk carefully, instituting tight reins on their options, spreads and portfolio. The management technique of each is essentially the same because position management is fractal.
Options switches to Arista Networks for European exchange co-location
Press Release (via Finextra)
Options, the leading private financial cloud provider for the global capital markets, has today announced the deployment of Arista Networks’ new low latency switching for the firm’s ultra-low latency co-location clients in European exchange hosting facilities operated by the London Stock Exchange (LSE), Nyse, and the Deutsche Boerse.
Capitalizing on the Fed taper news (or lack thereof)
James Ramelli – Futures Magazine
The Fed surprised the market on Wednesday when it announced that there would be no change to its $85 billion per month stimulus program. Markets were expecting a taper of the program in the neighborhood of $10-$15 billion per month and responded to the decision by moving sharply higher.
How to Invest in a Rising Market
Steven M. Sears – Barron’s
It is time now to monetize the view that equity volatility will remain subdued following the Federal Reserve’s (anti?) climatic meeting and that stocks will edge higher in Washington’s surreal light.
Jon Najarian and John Thomas: Climbing The Wall Of Worry [webinar]
Thursday, September 19, 2013 5:00 pm
Central Daylight Time (Chicago, GMT-05:00)
Join Jon Najarian and John Thomas of MadeHedgeFundTrader.com as they discuss what happens next in the global financial markets. The markets have ignored every single piece of bad news, from Syria to the Sequester, and seem poised to go higher. Do you know what to do with your personal portfolio from here? Jon and John have plenty of ideas, and they want to help you cash in on the many opportunities.