Observations & Insight
Jim Marzano – The History Of Financial Futures
Jim Marzano thought he was going to be a grain merchandiser at Stotler Grain. Instead, he ended up being a broker and a trader at the Chicago Board of Trade. In fact, he made the first trade in the 30-Year Treasury bond futures pit at the CBOT.
Get ready for ‘reflation and reopening’ stock-market trade to kick into high gear, says JPMorgan’s top quant
William Watts – MarketWatch
Bets on reflation and a surging post-COVID-19 economy have suffered a setback, but are poised to come roaring back, according to one of Wall Street’s most closely followed quantitative analysts.
“Our view is that the reflation and reopening trade will resume, with yields moving higher and rotation from growth, quality and defensives to value and cyclicals,” wrote Marko Kolanovic, JPMorgan’s global head of macro quantitative and derivatives research, in a Tuesday note.
Hedge fund assets hit record $3.8 trillion in first quarter
Maiya Keidan – Reuters
Global hedge fund assets rose to more than $3.8 trillion in March 2021, driven by the best first-quarter performance in 21 years and more investors putting cash to work with the industry, according to data from Hedge Fund Research (HFR).
Hedge funds added another $201 billion and gained an average of 6% in the first three months of the year, according to the data.
Getting Over Trader’s Block
Frank Kaberna – tastytrade
At the time of writing (9 a.m. CT 4/15), all Small Exchange futures are well within their weekly range as forecasted by volatility. Most markets are safely between year-to-date extremes, and the VIX index is at its lowest level since news of the pandemic initially felled equities back in February 2020. With all of that said, last week was one of the year’s best for active futures traders.
Exchanges and Clearing
Amendments to the Options on Black Sea Wheat Financially Settled (Platts) Futures and Options on Black Sea Corn Financially Settled (Platts) Futures Contracts to Convert from European Style to American Style Expiration
Effective on Monday April 26, 2021, the Board of Trade of the City of Chicago, Inc. (“CBOT” or “Exchange”) will amend the Options on Black Sea Wheat Financially Settled (Platts) Futures and the Options on Black Sea Corn Financially Settled (Platts) Futures contracts (collectively the “Contracts”) to convert the Contracts from European style to American style expiration. These amendments are noted below and in CBOT Submission No. 21-018.
Regulation & Enforcement
US bill on SOFR is ‘anti-choice’ – Giancarlo
Wendy Lisney – FOW
The US risks favouring Wall Street over Main Street if it removes choice by introducing legislation that only protects parties that transition from Libor to SOFR, the Secured Overnight Financing Rate. That is the view of Christopher Giancarlo, former chair of US derivatives regulator the CFTC and an independent director of the American Financial Exchange (AFX), which developed the American Interbank Offered Rate (Ameribor) benchmark as a Libor alternative that targets small and regional banks.
CME Group Announces Launch of CME Term SOFR Reference Rates
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it is publishing CME Term SOFR Reference Rates for 1-month, 3-month and 6-month tenors. These benchmarks are based on CME Group’s deep and liquid underlying SOFR futures, making them a robust and sustainable measure of forward-looking SOFR rates. They are aligned with the Alternative Reference Rates Committee’s (ARRC) principles for recommended forward term rates.
CME Group Integrates FX Link with Refinitiv Trade Notification (RTN) and IHS Markit’s MarkitSERV to Enhance Access to Cleared FX Swap Liquidity
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it has integrated its FX Link platform with the Refinitiv Trade Notification (RTN) and IHS Markit’s MarkitSERV messaging services. By connecting with Refinitiv and IHS Markit, FX Link customers can now receive OTC spot FX messages directly via RTN or MarkitSERV which will streamline onboarding and meet their Straight Through Processing (STP) requirements.
Deutsche Börse signs data partnership with Bolsa Mexicana de Valores Group
The partnership gives Deutsche Börse access to data from the second largest exchange operator in Latin America; Deutsche Börse customers benefit from access to the entire portfolio of data products via just one license agreement; BMV Group’s market data offering includes real-time and delayed data for stock and derivatives markets; Cooperation expands global sales presence of the BMV Group
Frankfurt, Mexico City. A new cooperation with the Mexican exchange operator Bolsa Mexicana de Valores (BMV Group) gives Deutsche Börse and its customers access to the market data of the second largest exchange operator in Latin America.
Fundamentals of Futures & Options (also applicable to Series 3 Exam)
For more than 30 years, IFM has consistently provided learners with a solid foundation and understanding of futures and options markets and trading including terminology, risk management, pricing, and basic trade strategies. This instructor-led virtual course includes lectures from an engaging instructor with real-world expertise and supported by class discussion, practice exercises and educational materials. The course fee includes two must-read industry books, “Futures and Options” and the “Guide to U.S. Futures Regulation.”
Dates: May 10, 2021 through May 14, 2021, 12:00 p.m. to 2:00 p.m.
Location: Virtual Live. 2-hour sessions over 5 days.
Instructor: Marti Tirinnanzi
Class size registration is limited to approximately 20 participants to promote student participation and interaction.
The World Federation of Exchanges to Hold 37th Clearing & Derivatives Forum This Week
The World Federation of Exchanges
The World Federation of Exchanges (“The WFE”), the global industry group for CCPs and exchanges, will hold the 37th edition of its Clearing & Derivatives Conference virtually this week. The conference runs from April 19 through April 23.
The conference brings together academics, policymakers, regulators, CCPs, derivatives markets and practitioners from around the world to exchange ideas on the opportunities and challenges for the future of central and bilateral clearing in the light of regulatory reforms, market structure changes and technological developments.
Clearing 101: Exchanges, Clearinghouses and CCPs
Dates: Sep. 15, 2021 12:00 p.m. – Sep. 16, 2021 1:30 p.m.
Location Virtual Live. Two 90-sessions over 2 days.
Instructor: Marti Tirinnanzi
Registration is limited to approximately 20 participants to promote student participation and interaction.
Join us for a short program (90 minutes each day for 2 days) that explains the multilateral systems that provide the infrastructure for transferring, clearing and settling payments, derivatives and other financial transactions among financial institutions and end users. Following Dodd Frank, clearinghouses became designated as Systemically Important Financial Market Utilities, vital to the operations of the financial markets and subject to heightened regulatory scrutiny. Buyers and sellers in exchange transactions rely on clearinghouses to intermediate transactions and to manage credit risks between trading parties. As such, clearinghouses promote transparency, efficiency, and stability by providing market-based pricing, daily settlement, and ensuring adequate capitalization for markets to function.
Q1 2021 ETD Volume
May 5, 2021; 10:00 a.m. to 11 a.m. ET
The webinar will highlight the main trends in trading activity in Q1 2021 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings. The webinar also will feature two guest speakers from UBS discussing the rise of retail participation in the U.S. ETD markets.
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 its 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 Covered Call Options Strategy
Date: Wednesday, May 12, 2021
Time: 3:30 p.m. CT
Duration: 1 hour
Mark Benzaquen – Principal, Investor Education – OCC
For options investors, the covered call is one of the core strategies for income generation, but there are many details to consider before opening a position. On May 12, join The Options Industry Council’s Mark Benzaquen, a former pit broker who now focuses on options education, for a detailed overview of the covered call.
Goldman Survey Finds Insurers With $13 Trillion Ready for Risk
Max Reyes – Bloomberg
Insurance executives responsible for investing more than $13 trillion in assets worldwide are planning to take on more risk as the global economy recovers, according to an annual survey conducted by Goldman Sachs Group Inc.
Of 286 chief investment officers and chief financial officers polled, 34% said they plan to increase portfolio risk, compared with 8% planning a decrease, according to survey results released Wednesday. The spread — 26 percentage points — is significantly above the survey’s historical average of 15%.