FX options market reflects more confidence in Biden election win
Foreign exchange markets are growing less fearful about the outcome of next month’s U.S. presidential election, judging by the fall in longer-dated implied volatility on options, the main measure of how much risk is perceived.
Currency options investors are increasingly betting that Democratic challenger Joe Biden will conclusively defeat President Donald Trump, given his lead in prediction markets and national polls.
Eurex introduces next generation of ESG derivatives
Deutsche Börse Group
New ESG futures and options on the DAX 50 ESG and EURO STOXX 50 ESG index; The next step from the elimination process to the integrated ESG ranking
The international derivatives exchange Eurex supports the global trend towards responsible investing by further expanding its ESG segment. With futures and options on the EURO STOXX 50 ESG Index and the DAX 50 ESG Index, Eurex will add another European ESG benchmark to its offering and establish an ESG offering specifically for the German market. Trading in the two new ESG contracts will start on November 9th.
Options signal relief for pound as Brexit deal heaves into view
Saikat Chatterjee and Elizabeth Howcroft – Reuters
Currency traders are seeing increased demand for derivatives that enable holders to position for a stronger pound, as improved chances of a Brexit trade deal start to push the risk of negative interest rates off the table.Sterling is 4% off 2020 highs of $1.35 hit last month when Britain appeared set to exit European Union trading arrangements with no alternatives in place, a catastrophe that could force the Bank of England to cut rates below 0%.But recent positive news around Brexit talks have flipped markets into bullish mode, lifting sterling back toward $1.30.
Exchanges and Clearing
Equity index derivatives: Introduction of futures and options on the EURO STOXX 50 ESG and DAX 50 ESG indexes; Eurex Circular 076/20 Equity index derivatives: Introduction of futures and options on the EURO STOXX 50 ESG and DAX 50 ESG indexes
The Management Board of Eurex Deutschland took the following decisions with effect from
9 November 2020: Introduction of futures and options on the EURO STOXX 50 ESG and the DAX 50 ESG indexes;
Inclusion of the new products in the existing Liquidity Provider schemes (as of 1 December 2020)
Quantitative Brokers Expands in APAC by Providing Co-located Execution Algorithms for SGX Derivatives Market
Quantitative Brokers (QB), an independent provider of advanced execution algorithms and data-driven analytics for global futures and options markets, today launched its full suite of award-winning execution algorithms on the Singapore Exchange (SGX) derivatives market.
Change in Eurodollar and SOFR strike formats tentatively rescheduled to Monday, November 23, 2020
At the request of several clearing firms, in order to provide more time for their testing, the listing of options on Eurodollars and 3-month SOFR futures with strike prices at increments of 0.0625 index points, and the concomitant change to strike price formats in the positional-format SPAN and settlement price files, has been postponed.
Trading Overview in September 2020 & First Half of FY2020 (April to September)
Japan Exchange Group released Trading Overview in September 2020 & First Half of FY2020 (April to September)
Cash Equity Market – In the first half of FY2020, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.5993 trillion.
Derivatives Market – In the first half of FY2020, total derivatives trading volume was 205,838,365 contracts, the third-highest trading volume over the same period.
MIAX Exchange Group – Options Markets – Corporate Action Alert: Sociedad Quimica y Minera de Chile S.A. (SQM)
Sociedad Quimica y Minera de Chile S.A. (SQM) has announced a cash dividend effective for Thursday, October 8, 2020. On that date, the current SQM option class will change to SQM1. The MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange will not list SQM1 options. Therefore, no options on SQM will be available for trading on Thursday, October 8, 2020. Sociedad Quimica y Minera de Chile S.A. (SQM) will resume trading on the the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange on Friday, October 9, 2020.
Proposed Rule Change to Amend the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes to modify the current process relating to the expungement of customer dispute information.
Proposed Rule Change to Amend the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes to modify the current process relating to the expungement of customer dispute information. OCTOBER 06, 2020 3:59:11 Please refer to the following for details regarding the proposed rule change to the FINRA Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes to modify the current process relating to the expungement of customer dispute information.
Regulation & Enforcement
U.K. Watchdog Bans Sale of Cryptocurrency Derivatives to Individual Investors
Caitlin Ostroff – WSJ
The U.K.’s financial watchdog said it will ban the sale of derivatives linked to cryptocurrencies to retail consumers. The ban aims to protect small-time investors from large price swings in assets whose value is linked to cryptocurrencies such as bitcoin, ether or ripple. Under the rules, firms acting in the U.K. will be unable to sell, market or distribute derivatives, including options and futures contracts, to retail customers. Stocks of spread-betting firms that allow retail traders to bet on cryptocurrency derivatives fell on the news.
Finance Sharpens Its Attack Against New Jersey’s Tax on Trading
Elaine Chen – Bloomberg
The financial-services industry stepped up its battle against a proposed tax on high-speed trading in New Jersey, calling the idea bad for individual investors. The tax would hurt pension funds and people who invest in financial markets for savings, according to letters from more than two dozen industry trade groups including the Securities Industry and Financial Markets Association and the Financial Services Institute. The plan “would effectively represent a sales tax on investors,” the groups said in the letters to lawmakers.
LSE Upgrades Connectivity Options With TNS Ultra-Low Latency Solution
London Stock Exchange
Transaction Network Services (TNS) has today revealed that it has installed its ultra-low latency TNSXpress Layer 1 solution at the London Stock Exchange (LSE) colocation facility. This development means that LSE traders can now leverage speeds of between 5-85 nanoseconds thanks to the unique single hop architecture that the TNSXpress Layer 1 solution uses. This infrastructure is up to 10 times faster than traditional Layer 3 architectures.
SpiderRock Advisors to Provide Risk Management and Income-Focused Options Solutions to Custom SMA Clients on the Envestnet Platform
SpiderRock Advisors, LLC (SRA), a $1.5 billion asset management firm focused on providing customized option overlay strategies to advisors and institutions, today announced that it will begin offering their option overlay strategies to clients via the Envestnet platform.
Quantitative Brokers rolls out algorithm suite on derivatives market at SGX; Quantitative Brokers will provide its full suite of agency algorithms to SGX clients including the Bolt, Strobe, Closer, Octane, and The Roll strategies.
By Annabel Smith – The Trade
Execution algorithm provider Quantitative Brokers has launched its full suite of execution algorithms on the Singapore Exchange (SGX) derivatives market.
Save the Date for the Annual Chicago Conference on Futures and Derivatives
Thompson Coburn LLP
Between the pandemic and the resulting financial devastation, the futures and derivatives markets have displayed unprecedented volatility. Add working from home to the mix and compliance has never been more challenging.
In response, we are offering a two-hour webinar on the current state of regulation and enforcement in our industry. At no cost, you can hear from regulators and enforcement attorneys about the latest developments and earn two hours of CLE.
Tuesday, October 20, 2020
1:00 PM – 3:00 PM CST
Law & Compliance Division Conference
7 October 2020 – 9 October 2020 • 9:00 AM – 6:00 PM ET
Our virtual Law & Compliance Division conference (L&C-V) will provide a forum to learn and discuss the legal and regulatory issues impacting the derivatives industry. L&C-V meets the needs of multiple levels of practitioners in the industry, from the new law firm associate to the chief compliance officer. Register today & join us, virtually, 7-9 October to explore recent legal and regulatory precedents affecting the futures, options and centrally cleared derivatives markets.
FIA Legal Opinions Primer
13 October 2020 • 2:00 PM – 3:00 PM BST • Webinar
If you are an experienced user of FIA legal opinions, new to the world of FIA netting and other legal opinions for regulatory capital purposes or just curious as to why FIA maintains a library of legal opinions, please tune in to this FIA webinar where experts from Clifford Chance LLP and FIA will explain the types of legal opinions that FIA maintains, their structure and purpose in the context of regulatory capital requirements. Speakers will also discuss practical aspects of how firms can go about accessing FIA legal opinions, how the legal opinions are reviewed and made available to member and non-member firms. This webinar will focus on the FIA legal opinions procured out of Europe and will not cover the US FCM netting opinions.
Billionaire Ray Dalio says Trump’s halting of stimulus negotiations will be a ‘significant negative’ for the economy
Emily Graffeo – Markets Insider
Legendary investor Ray Dalio said the delayed stimulus will be a “significant negative on the economy,” following President Trump’s decision to halt negotiations for a deal until after the election.