Goldman puts four on leave after fallout from trading glitch: report
Krithika Krishnamurthy – Reuters
Goldman Sachs Group Inc (GS.N) put four senior technology specialists on administrative leave after a trading glitch that led to a flood of erroneous options trades, the Financial Times reported, citing people familiar with the situation.
**Somebody is actually being held accountable on Wall Street? -JB
Bats Agrees to Merge With Direct Edge as Volume Shrinks
Nandini Sukumar, Nikolaj Gammeltoft & Nick Taborek – Bloomberg
Bats Global Markets Inc. and Direct Edge Holdings LLC agreed to merge, uniting two of the biggest American exchange operators amid a four-year decline in volume.
The third- and fourth-largest equity market owners said the transaction will close in the first half of 2014.
**Press release is below under “Exchanges”. -JB
Will the BATS-Direct Edge Merger Raise Stakes for Rival Exchanges?
Ivy Schmerken – Wall Street & Technology
By teaming up, the two securities exchange operators will jump ahead of Nasdaq to become the second largest exchange operator in the United States. Over the past month, NYSE Euronext’s exchanges represented about 22.5 percent of all stock trading over the past month, while Nasdaq’s platforms had 17.5 percent, BATS and Direct Edge together had 20.5 percent.
Server Crash Spurs 3-Hour Nasdaq Halt as Data Link Lost
Michael P. Regan, Sam Mamudi & Whitney Kisling – Bloomberg
The interruption that froze half the U.S. stock market last week began with a routine notice.
“NYSE Arca is currently experiencing an issue processing customer messages on routed orders in Tape C symbol range ‘TACT’ through ‘ZYY.C,’” read an alert for traders received by Bloomberg News at 10:17 a.m. on Aug. 22. “Will advise.”
**The title makes this sound like old news but the article is a fairly extensive and interesting look into the events that day and how it all played out. -JB
Goldman Losses on Options Glitch Limited
Justin Baer – The Wall Street Journal
Goldman Sachs Group Inc. GS -0.42% will rack up tens of millions of dollars in losses for sending waves of erroneous orders into the stock-options market last week, according to a person familiar with the situation.
Videocast: Is VIX hitting a bottom?
Easing Hopes Continue To Burn The VIX – Weekly VIX ETF Report
Wall Street Sector Selector
The VIX Index and VIX ETFs continue to decline as more and more investors hope for continued easing.
BATS Global Markets and Direct Edge Agree to Merge
Press Release (BATS)
BATS Global Markets, Inc. (BATS) and Direct Edge Holdings LLC (Direct Edge) today announced a definitive merger agreement, which will bring together two customer-focused securities exchange operators under the BATS Global Markets enterprise to drive further innovation and better serve investors.
Financial terms will not be disclosed for the transaction, which is expected to close in the first half of 2014, subject to regulatory approvals. Current BATS CEO Joe Ratterman will remain in the same role and current Direct Edge CEO William O’Brien will be President. Bryan Harkins of Direct Edge will join the combined company as an integral member of the senior executive team.
ICE’s NYSE Euronext Deal Will Raise Its Game In The European Derivatives Market
The IntercontinentalExchange (NYSE:ICE) and NYSE Euronext (NYSE:NYX) moved closer to completing their merger after securing the requisite approval from the Securities and Exchange Commission (SEC) last week. They now await the green light from the individual country regulators in Europe and could close the deal as soon as the first week of September.
Deutsche Boerse’s Eurex resumes trading after outage
Exchange operator Deutsche Boerse (DB1Gn.DE) halted trading on its derivatives platform Eurex for over an hour on Monday after the system suffered a time-keeping glitch.
**Exchanges halting trading over technical glitches is starting to become all too common. Almost won’t be news if this keeps up. -JB
Taiwan Stock Exchange, MIAX Options Exchange partner
Taiwan Stock Exchange (TWSE) and the The MIAX Options Exchange (MIAX) have signed a memorandum of understanding (MoU) for mutual cooperation and information exchange.
The Markets’ Technology Trap
Steven M. Sears – Barron’s
Securities listed on an exchange should define the financial market, but stock and options markets are now defined by their trading technology.
Exchanges that once existed to help companies raise capital now mostly appeal to various trading styles.
Nasdaq and the Erosion of Trust in Electronic Trading
Paul Vigna – The Wall Street Journal
Nasdaq’s CEO and head of damage control, Bob Greifeld, waded out into the press this morning, to explain why he didn’t wade out into the press yesterday afternoon.
Volatility Trading within the Limits of Arbitrage?
The Options Insider
Some market inefficiencies are not easily exploitable. Sometimes, large inefficiencies become popular enough that the activity of arbitrageurs makes them into small inefficiencies. And sometimes small inefficiencies are small enough that it is not profitable for participants to arbitrage them away.
Continuing the Long-Term/Short-Term Options Debate
Adam Warner – Schaeffer’s Investment Research
I got some nice feedback to the question I posed Friday. Is it better to write and frequently roll shorter-term options versus a dedicated long, or write longer-term options?
For my friend’s personal circumstances, it made more sense to go longer term. But your mileage may vary.