In a Low-Return World, Smart Investors Have Options

Jun 6, 2023

Lead Stories

In a Low-Return World, Smart Investors Have Options
Michael Oyster, Chief Investment Officer, Options Solutions – Cboe
In 1981, the Paul Volcker-led Federal Reserve was in a deathmatch with inflation. Recognizing that the U.S. economy would likely be plunged into recession, Volcker launched the effective federal funds rate to nearly 20% to stamp out inflation once and for all. Bond yields climbed as well. The 10-year U.S. Treasury bond reached its zenith in September 1981, pushing up to just below 16%.
While the impact that the stratospheric rise in rates of the 1970s and early ’80s had on markets at the time is worth considering, it’s what happened in the four decades that followed that is the subject of our focus here.
/jlne.ws/42wTO5H

Cboe Wins Approval for Margin Trades on Crypto Futures Exchange
Lydia Beyoud – Bloomberg
Traders on Cboe Global Markets Inc.’s digital-asset exchange will soon be able to enter into margined Bitcoin and Ether futures contracts after the firm received a critical regulatory sign-off on Monday. Cboe Digital won approval from the Commodity Futures Trading Commission to offer physically and financially settled margined contracts beginning in the second half of this year, according to a statement.
/jlne.ws/43gufap

Exchange operator Cboe gets nod to launch leveraged crypto derivative products
John Mccrank – Reuters
Cboe Global Markets (CBOE.Z) on Monday said it received regulatory approval to offer leveraged derivatives products on its digital trading platform, including physically and financially settled bitcoin and ether margined futures contracts.
The U.S. Commodity Futures Trading Commission approved Cboe Digital to be the first U.S.-regulated crypto exchange and clearinghouse platform to offer leveraged derivatives when the contracts launch in the second half.
/jlne.ws/3oMtFCn

The VIX Is Flirting With Its Early 2020 Low. What It Means.
Karishma Vanjani – Barron’s
The CBOE Volatility Index, or VIX, which measures the expected volatility of the U.S. stock market, is on pace to close at the lowest level in more than three years.
/jlne.ws/3J1efky

Exchanges

Three Cboe Indices Up More Than 11% in 2023
Cboe
In the first five months of 2023 the S&P 500 Total Return Index rose 9.6%, a strong increase. In comparison, however, some of Cboe’s indices that track the values of hypothetical options-based or futures-based portfolios had greater gains during the same period.
/jlne.ws/42qlGbK

Cboe Digital Receives Approval to Launch Margin Futures on Bitcoin and Ether
Cboe Global Markets
Cboe Clear Digital announced it has received the necessary approval from the Commodity Futures Trading Commission (CFTC) to expand its product offering to include margined futures contracts. The initial product launch will include physically and financially settled Bitcoin and Ether contracts in the second half of 2023. Cboe Digital is the first U.S. regulated crypto native exchange and clearinghouse combination platform to offer leveraged derivatives products. Cboe Digital’s vision to bring trust and transparency to crypto spot and derivatives markets is an intermediary-inclusive model.
/jlne.ws/3oRpIMM

Cboe Global Markets Reports Trading Volume for May 2023
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading derivatives and securities exchange network, today reported May monthly trading volume statistics across its global business lines. The data sheet “Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report” contains an overview of certain May trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
/jlne.ws/43HDArr

Miami International Holdings Reports Trading Results for May 2023; MIAX Exchange Group Reports Strong Growth with Multiple Volume and Market Share Records in Options and Equities
Miami International Holdings
Miami International Holdings, Inc. today reported May 2023 trading results for its U.S. exchange subsidiaries – MIAX , MIAX Pearl and MIAX Emerald (together, the MIAX Exchange Group), and Minneapolis Grain Exchange (MGEX™).
/jlne.ws/3MQ7tPz

ICE Announces Record Traded Volumes in TTF Natural Gas
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that a record number of TTF natural gas futures and options traded during May 2023 as the market manages natural gas price risk exposure. A record 5.7 million TTF futures and options traded during May, equivalent to a record 4,158 Terawatt hours. Liquidity in ICE’s benchmark TTF market has grown strongly in 2023 with open interest up 37% year-over-year (y/y) at 2.6 million contracts, the highest level since January 2022. In addition, ICE is seeing record market participation in its TTF futures and options markets, with hedging out to December 2031.
/jlne.ws/3IUPHtm

Regulation & Enforcement

CFTC Approves Cboe Clear Digital, LLC to Clear Margined Digital Asset Futures
Commodity Futures Trading Commission
The Commodity Futures Trading Commission today approved an amended order of registration for Cboe Clear Digital, LLC (Cboe Clear) to clear additional products, subject to the terms and conditions specified in the order, as a derivatives clearing organization (DCO) under the Commodity Exchange Act.
/jlne.ws/3qvo2sH

Statement of CFTC Commissioner Christy Goldsmith Romero Regarding Cboe Clear Digital, LLC’s Expanded Clearing of Digital Asset Futures
Commodity Futures Trading Commission
I support Cboe Clear Digital, LLC’s (“Cboe”) amended order of registration (“Order”), which authorizes Cboe to expand its clearing of futures contracts on crypto assets, while staying within the traditional U.S. futures intermediated market structure. The Order is accompanied by prudent risk-mitigation measures implemented by Cboe to complement policies and practices meeting DCO regulatory requirements.
/jlne.ws/45MgCS1

Strategy

VIX Puts On The Bid
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop has your update on today’s $SPX & $VIX #options #trading volumes, #earnings and economic data releases.
/jlne.ws/3MX8rJU

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Crisis memory, geopolitics and the risks of financial contagion

Crisis memory, geopolitics and the risks of financial contagion

First Read Hits & Takes John Lothian & JLN Staff When Jack A. Wing died in 2011, I realized the industry was losing some of the pioneers of the financial futures era. Wing founded the masters program in financial engineering at the Illinois Institute of Technology,...

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The Spread

The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...

Past Options Newsletters

The Stock Market Has Rarely Been This Sleepy

The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...