Observations & Insight
Acuiti Management Intelligence in partnership with FIS is holding a webinar titled “How is ESG changing the buy-side/sell-side relationship?” The webinar is on October 29 at 11 AM New York time, 15:00 London and 22:00 Singapore. The discussion will focus on how the growth of ESG in fixed income and other non-equity asset classes will create new instruments to structure and trade, what are the challenges in building liquidity in ESG-screed options markets and what new services can the sell-side launch today to cater to the growing ESG demand.
Acuiti will be joined by Magnus Linder, senior trader, Swedbank Robur; Martin Jarzebowski, director of ESG and responsible investing, Federated Hermes; Patrick Kondarjian, head of EMEA wealth sales & global ESG product, HSBC; and Pontus Eriksson, head of strategy, FIS. You can register HERE.
If Trump’s Election Prospects Were an Option, It Would Be Out-of-the-Money
Jason Goldberg – Barron’s
As an option trader, I view the world through the lens of volatility, a fancy term measuring the swings in outcomes. Politics is no different. When you’re ahead, you want little volatility. But when you’re behind, you need something to change. And that’s a real problem for President Donald Trump , based on current and historical polling data.
While this point has been made before, given the potential market reactions under different election outcomes, it’s worth revisiting. Of the last 14 presidents, Trump’s approval rating has, by far, been the least volatile. Trump’s approval rating touched a high of 49% early in 2020 and a low of 35% a few times in late 2017, based on data from Gallup. But that range is roughly half that of Barack Obama, who had an approval rating as high as 67% and as low as 40%. The average high/low range of all presidents since FDR is more than 40 points.
Bitcoin’s market run-up sends options to all-time high for open interest
Frank Chaparro – The Block
Bitcoin’s price has been on a tear — and that’s helped bring the options market for the digital asset to new heights, according to data compiled by The Block. The price of bitcoin has appreciated by about 15% over the last five days, sending the price of the cryptocurrency above $13,000 for the first time since 2019.
Markets are in ‘eye of the storm’ and mounting turmoil will drive stocks lower and 10-year bonds to negative 0.50%
Mark DeCambre – MarketWatch
Markets are enjoying a period of relative calm, but investors should prepare for a volatility burst as the U.S. heads toward the 2020 presidential election and while the economy is still dealing with the disastrous effects of the coronavirus pandemic, says Scott Minerd of Guggenheim Partners.
“The market’s performance and the economy’s recovery is calm compared to the volatility of March and April, but several issues concern me as the eyewall approaches,” Minerd writes in a note set to be published later Thursday but reviewed by MarketWatch.
Exchanges and Clearing
HKEX Plans to Extend Trading and Clearing of MSCI Derivatives to Cover Hong Kong Holidays
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce plans to extend trading and clearing of all MSCI derivatives contracts to cover Hong Kong public holidays. This represents HKEX’s latest market enhancement to support the global trading community in managing their risks and optimising their portfolios. Hang Seng Index and Hang Seng China Enterprises Index derivatives will not be under the scope of holiday trading at this stage.
*****JJL: Forget about taking Dragon Boat Festival day off on Thursday, June 25. You are just going to have to trade instead.
Exchanges Take Differing Approaches To ESG Derivatives
Shanny Basar – MarketsMedia
Deutsche Börse’s Eurex has launched a suite of derivatives based on ESG versions of benchmark indices while Nasdaq aims to launch bespoke products to meet the variety of environmental, social governance strategies in the market.
Change to the Market for Underlying Security Used for Openings on MIAX Options, MIAX PEARL and MIAX Emerald for Symbol KDMN Effective October 26, 2020
Kadmon Holdings, Inc.(“KDMN”) will transfer primary listing from the New York Stock Exchange to the NASDAQ Global Select Market (“NASDAQ”) effective Monday, October 26, 2020. MIAX Options, MIAX PEARL and MIAX Emerald will use NASDAQ as the “market for the underlying security” for the purpose of Openings on the Exchange.
Regulation & Enforcement
(Podcast) LMAX’s CEO breaks down the real impact of the U.K. crypto derivatives ban
Aislinn Keely – The Block
Earlier this month, the U.K’s Financial Conduct Authority (FCA) banned the sale of cryptocurrency derivatives and exchange-traded notes to retail users, sparking concern that the regulator didn’t listen to feedback on the proposal. The ban will take effect in January of next year, affecting crypto brokers, investment platforms, financial advisers and, of course, derivatives exchanges. But, David Mercer, CEO of LMAX Group, said what the ban really does is effectively halve the leverage. The FCA had already limited leverage to retail customers to two-to-one, now it’s one-to-one.
CFTC, SEC hold first-ever joint meeting to discuss margin-related harmonization
Jeff Reeves – FIA.org
The US Commodity Futures Trading Commission and the US Securities and Exchange Commission held their first-ever joint public meeting on 22 October. The meeting between two of the nation’s top financial market regulators was held via teleconference, and featured a joint final rulemaking that aligned minimum margin requirements for security futures as well as a request for public comment on margining of swaps and security-based swaps that are not cleared.
NOTICE OF DISCIPLINARY ACTION # COMEX 19-1141-BC-1
Effective Date 23 October 2020
Gulzada Investments, Ltd.
COMEX RULE VIOLATION:
Rule 432.W. General Offenses (in part)
NOTICE OF DISCIPLINARY ACTION # NYMEX 19-1161-BC-4
Effective Date 23 October 2020
MERRILL LYNCH COMMODITIES INC.
NYMEX RULE VIOLATION: 538.C. RELATED POSITION
Blackboxstocks Announces Integration with TradeStation Allowing Users to Trade without Leaving the Blackbox Platform; Companies to Host Official Launch Webinar to Demonstrate Powerful Functionalities Offered by Partnership at 3:30PM CST Thursday October 22, 2020
Blackboxstocks, Inc. (OTC: BLBX) (“Blackbox”), a financial technology and social media hybrid platform offering real-time proprietary analytics for stock and options traders of all levels, today announced that it has integrated with TradeStation Securities, Inc. (“TradeStation”), enabling Blackbox users to trade stocks and options via TradeStation without ever leaving the Blackbox platform.
Famed investor Mike Novogratz says ‘liquidity tsunami’ from stimulus will drive investors to buy any dips from Biden’s tax plan
Emily Graffeo – Markets Insider
Famed investor Mike Novogratz told CNBC on Friday that any dips in the stock market from Joe Biden’s tax plan will be buying opportunities, as the next fiscal stimulus will provide a ton of cash.
“Applying the Pareto Principle to Options Trading Concepts” Takeaways
Mike Butler – Tastytrade
The pareto principle can be applied to many things in life, including options trading! In this trade talk, Mike Butler explains why his main focus is on extrinsic value for most of his options trades, and why it’s such a powerful learning tool as well. Check out the segment and read this blog post for his main takeaways!
Q3 2020 trends in futures and options trading
28 October 2020 • 10:00 AM – 11:00 AM ET • Webinar
How has the pace of global futures and options trading changed during Q3 2020? Which sectors are continuing at a record pace, and which have started to ease back?
Join us on 28 October for a webinar that will present data on volume and open interest across the global listed derivatives markets, with break-downs by asset class and region as well as comparisons to historical trends.
What Will the New Army of Day Traders Do Next? It’s a Mystery
Michael P. Regan and Sarah Ponczek – Bloomberg
The shift to commission-free trading and the stay-at-home environment of 2020 helped usher a new army of day traders into the stock and equity-options markets. How will this influential cohort affect markets now that they account for a share of volume that rivals hedge funds?
Liz Ann Sonders, chief investment strategist at Charles Schwab, joins the latest “What Goes Up” podcast to discuss this, the upcoming elections, and other market topics. Some highlights of the conversation:
(Podcast) TWIFO 222: An Epic Historical Perspective on The Election
This Week In Futures Options – Options Insider Network