Hedge funds are poaching top volatility traders from Wall Street banks; Dollar steadies as traders brace for more U.S. data

May 3, 2021

$40,526/$300,000 (13.5%)

Lead Stories

Hedge funds are poaching top volatility traders from Wall Street banks
Alex Morrell – Markets Insider
The derivatives traders that thrived during 2020’s once-in-a-decade market shock are now some of the hottest commodities on the street.
But unlike recent years, where Wall Street banks snatched senior talent from each other, marquee hedge funds like Balyasny, Citadel, and Millennium are plundering the rosters at Bank of America, Citigroup, and Goldman Sachs as they deploy their massive hordes of capital and chase riches with expanding volatility strategies of their own.
/bit.ly/338JZPt

Dollar steadies as traders brace for more U.S. data
Ritvik Carvalho – Reuters
The dollar levelled out after its recent bounce on Monday as investors made a cautious start to a week crammed with central bank meetings and big-ticket U.S. economic data, waiting for clues on the global inflation outlook and policymakers’ responses.
Trade was thinned by holidays in Japan, China and Britain, which kept a lid on volatility, leaving the greenback to trade where it settled after a Friday leap. It held at $1.2040 per euro and crept to a three-week high of 109.66 yen .
/reut.rs/2SmFRsW

Exchanges and Clearing

Robinhood’s Biggest Business More Than Tripled Amid Trading Frenzy; The trading app generated $331 million in payments for order flow during the first three months of 2021
Peter Rudegeair – WSJ
The stock-trading mania of early 2021 lifted revenue at Robinhood Markets Inc. to new heights. When its customers buy and sell stocks and options, Robinhood routes those orders to high-speed traders, which pay the startup brokerage for the right to execute many of those trades. That business, known as payment for order flow, generated about $331 million in revenue for Robinhood in the first quarter, according to a securities filing late last week. That is more than triple the $91 million Robinhood brought in from payment for order flow in the first quarter of 2020.
/jlne.ws/3tgrJ13

Cboe Europe Derivatives Secures Support of Key Participants for September 2021 Launch
Cboe
Cboe Europe, a pan-European exchange operator and a subsidiary of Cboe Global Markets, announced it plans to launch Cboe Europe Derivatives, a new Amsterdam-based futures and options market, on Monday, 6 September 2021, subject to regulatory approvals. Cboe has secured the support of a broad range of participants, including banks, clearing firms, market-makers and proprietary trading firms who are expected to help contribute to the provision of liquidity and client order flow on Cboe Europe Derivatives. Participant bank and clearing firms currently include ABN AMRO Clearing, Goldman Sachs and Morgan Stanley. Participant market-makers and proprietary trading firms currently include All Options, Da Vinci Derivatives, DRW, Flow Traders, Liquid Capital Markets and Susquehanna International Securities.
/bit.ly/3vrYbiv

CME Group Announces Launch of Micro Bitcoin Futures
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today launched Micro Bitcoin futures, further expanding its suite of crypto derivatives offerings. “We are pleased to introduce this new contract at a time when we continue to see consistent growth of liquidity and participation in our crypto futures and options,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products.
/bit.ly/3gX25vK

NOTICE OF DISCIPLINARY ACTION # NYMEX 19-1201-BC
CME Group
Effective Date 03 May 2021
NON-MEMBER: Kevin Howard
NYMEX RULE VIOLATION: NYMEX RULE 575.D. DISRUPTIVE PRACTICES PROHIBITED
No person shall enter or cause to be entered an actionable or non-actionable message with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.
/bit.ly/337jp9c

Strategy

A 10% drop or at least a pause could be looming for the S&P 500. Take shelter in these sectors, says veteran strategist
Barbara Kollmeyer – MarketWatch
Legendary investor Warren Buffett told his faithful over the weekend that the U.S. economy is “red hot,” suggesting money in an index fund is better served than picking stocks. That advice comes as investors face what could be a seasonally weak period for equities.
The “sell in May and go away” adage dictates that from now to October is often a less profitable and more bumpy time for stocks, partly as the weather warms up and big traders spend more time vacationing, leaving behind junior traders and opening the door to volatility.
/on.mktw.net/3eQwJnV

Education

All About Options (With) Expert Sheldon Natenberg
Cboe
Join Cboe Options Institute on Wednesday, May 12, to learn from one of the industry’s most renowned option trading educators. This webinar will interest traders of all ages and experience levels, but if you are new to option trading you really won’t want to miss it.
Wednesday, May 12, 2021
12:00 p.m. ET
/bit.ly/2PIHKz2

Fundamentals of Futures & Options (also applicable to Series 3 Exam)
IFM
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. ET.
Location: Virtual Live. 2-hour sessions over 5 days.
Early-bird $495
Fee $595
Instructor: Marti Tirinnanzi
Class size registration is limited to approximately 20 participants to promote student participation and interaction.
/bit.ly/3fcGe2D

The Covered Call Options Strategy
OIC
Date: Wednesday, May 12, 2021
Time: 3:30 p.m. CT
Duration: 1 hour
Speaker:
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.
/bit.ly/328tLoZ

Events

Clearing 101: Exchanges, Clearinghouses and CCPs
IFM
Dates: Sep. 15, 2021 12:00 p.m. – Sep. 16, 2021 1:30 p.m. ET.
Location Virtual Live. Two 90-sessions over 2 days.
Early-bird $199
Fee $225
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.
/bit.ly/3gimCun

Q1 2021 ETD Volume
FIA
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.
/bit.ly/3msVZEj

Miscellaneous

(Podcast) VV 444: Foot-Volatility
Options Insider
Host: Mark Longo, The Options Insider Media Group
Matrix Hot Seat: Mark Sebastian, The Option Pit
MIAX Hot Seat: Matt McFarland, MIAX Exchange Group
/bit.ly/2PJwhiK

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