GameStop Prompts U.S. to Consider New Rules for Options, Shorts
Benjamin Bain – Bloomberg
The GameStop Corp. trading frenzy has prompted U.S. regulators to consider new rules for everything from short-selling to investing with options and gamification, indicating watchdogs are just getting started in responding to the market mayhem.
In a letter to Senator Elizabeth Warren, acting Securities and Exchange Commission leader Allison Herren Lee ticked off several rule changes that the regulator should “seriously consider.” They include toughening requirements for brokers that offer options trading, new demands for brokers that sell their customers’ stock orders to other firms and stepped up disclosure standards for hedge funds and other traders who bet against shares.
GameStop (GME) Stock Defies Gravity Again With Rally Heading for 100% Gain
Bailey Lipschultz – Bloomberg
GameStop Corp.’s latest winning streak has catapulted it to the highest in weeks as Chewy Inc. founder and activist investor Ryan Cohen continued to shake up operations at the video-game retailer, taking retail investors by storm.
Shares of the Grapevine, Texas-based company climbed as much as 19% to $231.74 at 9:36 a.m. in New York Tuesday, extending a winning streak for a fifth day. The gain follows Monday’s 41% climb after the company said Cohen would lead a new committee focused on its digital transformation.
The Stocks Rotation Ride Is Real, and Violent
John Authers – Bloomberg
Last November, when excellent vaccine test results sparked a surge in stocks that had suffered most from the pandemic lockdown, it was still possible to doubt whether there had been a true market rotation. The initial drama was followed by a month or two of dithering. That doubt is over. The market is unquestionably going through a major shift. The question is how long it will continue.
Maybe Mom’s job is cool after all; Derivatives get a bad rap, but they help keep hamburgers affordable
Dawn D. Stump – Rollcall.com
Explaining what I do for a living to their teachers, classmates and friends is a struggle for my kids. If I was a YouTube star or a TikTok influencer, they could impress their friends. But alas, I am a commissioner at a regulatory agency with a really long (and confusing) name — the Commodity Futures Trading Commission. To my kids, my job is unrelatable, which loosely translates to “boring.”
*****JJL: CFTC Commissioner Dawn Stump stumping for burgers and derivatives is something to relish.
Podcast: Catching Up on the CAT
In the latest in SIFMA’s podcast series, SIFMA president and CEO Kenneth E. Bentsen, Jr. is joined by Ellen Greene, SIFMA managing director, equity and options market structure and Joe Corcoran, managing director and associate general counsel to talk about the current state of the Consolidated Audit Trail, or CAT.
Rise of the retail army: the amateur traders transforming markets
Katie Martin and Robin Wigglesworth – FT
When newcomers discover Robinhood, and decide to use the zeitgeist US trading platform to punt around in stocks, many of them have questions. Chief among them, it seems, is “what is the stock market?”. Along with “what is the S&P 500?”, that is one of the most commonly visited educational pages on the broker’s website, according to a new paper by academics at Oklahoma State and Emory universities. But what Robinhood’s army of untrained investors lacks in market knowledge, it more than makes up for in enthusiasm and impact.
Regulation & Enforcement
Senators to put Robinhood model under microscope again at GameStop hearing
Chris Matthews – MarketWatch
Washington will keep the spotlight on Robinhood and other zero-commission brokers when the Senate Banking Committee holds a hearing on the GameStop saga Tuesday at 10 a.m. Eastern, with expert witnesses set to warn of the dangers of financial speculation.
Banking Committee Chairman Sherrod Brown, an Ohio Democrat and a longtime critic of Wall Street, will oversee the questioning of several witnesses who will paint the sudden rise and extreme volatility in meme stocks like GameStop Corp GME, 23.61% as evidence of the need for fundamental reform of the U.S. system for retirement savings and stricter oversight of securities dealers.
LSEG Ready To Meet Demand For Digitisation And Data
Shanny Basar – Traders Magazine
David Schwimmer, chief executive of London Stock Exchange Group, said the completion of the Refinitiv acquisition in January this year is transformational for the firm in meeting the trends of digitisation of financial markets, the demand for open access and open technology platforms, and increased consumption of data. Schwimmer spoke this morning in a briefing on the preliminary results for the year ended 31 December 2020. The group reported an increase in total revenue of 3% to GBP2.1bn ($2.9bn) and a rise in total income of 6% to GBP2.4bn from 2019.
Webinar: Understanding the Option Greeks
For options investors at any level, a solid understanding of the Greeks is required knowledge. In fact, The Options Industry Council (OIC) is focusing a full webinar entirely on the Greeks – one of the most important concepts in options. If you’re looking for more clarity on how the Greeks can impact positions, join OIC on March 10th for a live session led by former trader Ken Keating. We will go over: how the Greeks can affect pricing, details on Delta, Theta, Gamma, Vega and Rho, why time decay can’t be overlooked.
Micro E-mini Equity Futures and Options Webinar
Join CME Group on Thursday, March 11 for a webinar on Micro E-mini Equity futures and options.
During this webinar, David Lerman, Director of Education at CME Group, will discuss the contracts’ trading performance and rise in liquidity as well as provide his insight on the following:
How are traders using Micro E-mini futures and options and why are they a capital efficient tool to manage risk? How have Micro E-mini futures and options traded since launch? In what ways are active traders using these new contracts? Are they only a speculative tool or are there other strategies traders employ? What are the impacts of recent market volatility on options and how can you align volatility with the correct strategy? How will the new administration affect the markets in 2021 – and beyond? What is the role of short-dated options?
Registration is open! – FIA Boca 2021
A New Virtual Experience
The Options Industry Conference is Going Virtual in 2021. Join OCC and the options exchanges for the 39th annual Options Industry Conference, April 28-29, 2021. While the conference will be held virtually for the first time in history, the focus will continue to be the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
The Whales of NBA Top Shot Made a Fortune Buying LeBron Highlights
Ben Cohen – WSJ
Michael Levy was scrolling Twitter last September when he noticed someone mention something that he wanted to know more about. What is NBA Top Shot? he wondered.
This platform to buy, sell and collect officially licensed video highlights was months from becoming a market that would captivate and mystify basketball fans, cryptocurrency enthusiasts, sneakerheads, pandemic day traders and thousands of people stuck at home. But it wasn’t long before Levy texted his friends: “This could be big.”
Game-changing women in derivatives; FIA celebrates groundbreaking women in the derivatives industry
Kirsten Hyde – FIA.org
International Women’s Day celebrates the achievements of women across the globe. To honor this day, FIA is highlighting women who have put their stamp on our industry. These women were chosen for their accomplishments and leadership within their organization, their influence within the sector and their capacity to pave the way for future generations of women.