It’s a great time to be an options trader; Traders Shorting VIX Spur Inflows to $1.2 Billion Fund Down 34%

Nov 17, 2020

Observations & Insight

$15,561/$300,000 (5.2%)
Kevin Comer

Lead Stories

It’s a great time to be an options trader; Local firms have pocketed profits and expanded operations in a record boom after several tough years.
Lynne Marek – Crain’s Chicago Business
Stock options trading has skyrocketed 31 percent this year to an annual record, lifting the fortunes of the firms in Chicago that specialize in them. Chief among them is Citadel Securities, which handles about a third of all options orders, though other Chicago players like Wolverine Trading, Old Mission, Simplex Investments and Dash Financial Technologies have also benefited.

****JJL: YES IT IS!!!

Traders Shorting VIX Spur Inflows to $1.2 Billion Fund Down 34%
Yakob Peterseil – Bloomberg
The world’s largest volatility ETF is seeing a frenzy of activity as traders across Wall Street bet on enduring calm in the stock market.
Even as the ProShares Ultra VIX Short-Term Futures exchange-traded fund (UVXY) — which protects against swings in U.S. equities — slumps 34% in the election aftermath, it’s on pace for the biggest monthly inflow since July.

Dow posts first record close since February as Moderna vaccine data spurs optimism
Ben Winck – Markets Insider
US stocks rallied on Monday after Moderna announced its coronavirus vaccine candidate reliably protected patients from COVID-19.
The Dow Jones industrial average closed at its first all-time high since February, while the S&P 500 also finished the day at a record level.

Inside Volatility Trading: So, Now What?
Kevin Davitt – Cboe
Okay. So…. Now what? Heraclitus is a lesser-known Ancient Greek philosopher. He predated Socrates and led a distinguished life. He was one of the first process philosophers and focused on the concept of change, or becoming. Heraclitus observed that nature is in a constant state of flux. He’s believed to have said “the only constant in life is change.” A statement like that may now seem self-evident, but there’s also a very natural inclination to resist those inevitable variations. We observe the tendency in everyday life as well as in markets.

Exchanges and Clearing

SPAN 2 Margin Framework Production Parallel Margin Reporting – Effective: November 17, 2020
CME Group
CME Clearing is pleased to announce that production parallel testing of the new SPAN 2 margin framework is now underway for select energy futures and options on futures contracts. A new SPAN 2 Margin Breakdown Report will be available to Clearing Members to begin testing SPAN 2 margin requirements.

MIAX Exchange Group – Options Markets – Viatris Inc. (VTRS) Non-Tradeable effective for 11/17/2020
MIAX Options
The entire option class of Viatris Inc. (VTRS) has been made non-tradeable on the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchanges effective for today, Tuesday, November 17, 2020.

MIAX Options Exchange – SPIKES Special Settlement Auction Settlement Reference Price Opening Width and Valid and Priority Quote Width Tables used in the November 18, 2020 SPIKES Special Settlement Auction
MIAX Options
Due to sustained market volatility, MIAX Options will continue to use the Settlement Reference Price Opening Width and Valid and Priority Quote Width tables detailed in MIAX Options Regulatory Circular 2020-11 for opening the SPY December 18, 2020 options used in the November 18, 2020 SPIKES Special Settlement Auction. Contact Trading Operations at or (609) 897-7302 with any questions regarding the SPIKES Settlement Process.

CME Group Announces Launch of New Implied Volatility Indexes
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it began daily publication of a suite of new implied volatility benchmark indexes based on its innovative, proprietary CME Group Volatility Index (CVOL™) methodology. Beginning with eight implied volatility indexes on its 10-Year Treasury Note futures and G5 FX currency pair futures, the CVOL family of indexes will be expanded to include benchmarks across all major asset classes in the first half of 2021.

Regulation & Enforcement

SEC Chairman Jay Clayton to Leave Agency at End of 2020
Paul Kiernan and Dave Michaels – WSJ
Securities and Exchange Commission Chairman Jay Clayton will step down at the end of the year, opening the door for Democrats to push for a more aggressive approach to regulation of Wall Street.
His departure, made public on Monday, is the latest in a wave of expected exits at federal regulators as power changes hands in Washington. Mr. Clayton, 54 years old, said he intends to remain active on the commission until the end of the year.

Notice of Summary Fine Case No. 2020-031: StoneX Financial Inc.
ICE Futures U.S.
Summary Fining Authority
In accordance with ICE Futures U.S., Inc. (“Exchange”) Rule 21.02(e), the Chief Regulatory Officer or his designee may impose a summary fine of no more than ten thousand dollars ($10,000) upon a Member or other market participant for certain minor rule violations.


Asia Derivatives Conference
Join us virtually in December!
1 December 2020 – 3 December 2020 • 9:00 AM – 3:00 PM SGT Daily
Our annual Asia Derivatives Conference provides unique opportunities for the cleared derivatives community to build an understanding of how global forces and regional trends and issues are shaping Asia-Pacific markets. Register now and join us virtually, 1-3 December, to gain insights into what’s on the horizon for the Asia-Pacific region.

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