Observations and Insights

Exchange CEO Series – World View: Nasdaq OMX’s Bob Greifeld looks at regulation, tech resiliency and partners

Nasdaq OMX, like every exchange, is trying to navigate the new regulatory landscape. But Bob Greifeld, CEO of Nasdaq OMX, said there are more opportunities to be had, beyond the new rules.

John Lothian News sat down at the 2014 FIA Boca Conference with six exchange CEOs to talk about their views on four main topics: competition, regulation, growth and technology. Here’s what Greifeld, CEO of Nasdaq OMX, had to say about each.

Greifeld, like other exchange CEOs, believes that regulation is the key driver of competition and change in the financial industry, globally today.

“If you think about the evolving nature of the markets, you have to start first and foremost with the regulation,” he told Jim Kharouf, editor-in-chief of John Lothian News. “We are a creature of the regulatory environment.”

Watch the video »

Lead Stories

European Demand for U.S. Options continues to be strong with usage growing more diversified, new study finds
The Options Industry Council (OIC) today presented the results of the study, “Shifting Demand in a Changing Market Landscape,” conducted by TABB Group and commissioned by OIC. The study found European investors continue to be interested in using U.S. options while becoming more sophisticated, shown by an expansion in the use of directional and volatility strategies. There is also a greater use of sector ETFs and options on single stocks.

Dow Correction: Why You Shouldn’t Panic Over Market Volatility
By Dan Caplinger, The Motley Fool
On Wednesday, the Dow Jones Industrials (DJINDICES: ^DJI  ) lost almost 100 points, finishing near the day’s lows as investors worried about a variety of factors that could hurt the market’s future prospects. That range of issues runs from the threat of war in Ukraine to overextended valuations on high-flying momentum stocks and recent IPOs. Yet, one key fact should keep you from panicking about the Dow’s performance in the months to come: Everyone’s talking about a pullback as though it were an imminent event, yet for the most part, investors aren’t putting their money where their mouths are. After all, the S&P Volatility Index (VIX) remains at relatively low levels, showing a lack of bearish options bets on the Dow.

DTCC Annual Systemic Risk Barometer Measures Levels of Concern about Systemic Risk in Financial Services Industry
Press Release
Despite an apparent ease in fears of a systemic risk event happening in the next 12 months, a recent survey conducted by The Depository Trust & Clearing Corporation (DTCC) revealed that a vast majority of financial firms have increased spending on systemic risk mitigation.

S&P 500 Falls for Second Day; Emerging Markets, Oil Gain
By Callie Bost and Lu Wang, Bloomberg   
U.S. shares fell for a second day, following yesterday’s biggest drop in a month, as financial and technology shares led declines. Emerging-market stocks climbed to a two-month high as Brazilian equities surged. Oil rose while gold slipped.

Unusual Activity Alert: Combos Trade in VIX
The Options Insider Shares of CBOE Volatility Index (VIX) are up .17 to 15.11 today.  VIX is in the middle of the 52 week range.
Today paper traded 9500 VIX May 14 puts over May 17/21 call spreads at $.625.  The ADV is 759k contracts.  The OI is huge on all strikes.


Global investors, exchanges seek to develop ESG listing standards for companies
By Barry B. Burr, Pensions & Investments
New York State Common Retirement Fund and BlackRock (BLK) are among the institutional investors in a Ceres-led group which launched an initiative to promote the integration of environmental, social and governance disclosures into the listing rules for companies listed on U.S. and global stock exchanges, according to a statement from Ceres.
IntercontinentalExchange — which includes the New York Stock Exchange — Nasdaq OMX, CME Group, Chicago Board Options Exchange, Deutsche Borse, Shenzhen Stock Exchange and BM&F Bovespa — all WFE members — are among the exchanges that have committed to participate in the WFE group.

SSE to become China’s first exchange to launch options
FOW Intelligence (subscription required)
The Shanghai Stock Exchange (SSE) will next week become the first Chinese exchange to support live options trading in the latest sign of China’s derivatives market branching out of commodities. SSE will begin trading on April 1 single stock options and exchange-traded fund options.


Options market leans on Citi volatility
By Andrew Wilkinson, Futures Magazine
Shares in Citigroup Inc. have maintained a post-close slide of around $2.00 in response to the Fed’s denial of the lender’s attempts to better reward shareholders via its capital plans. While dividends form part of the DNA of an option’s premium, given the minimal existing penny paid by Citigroup, market-makers hardly priced in much of a bump in the event that Citi was successful in hurdling the stress test.

Expect Nifty to see the levels of 6,750-6,800 in near term: Anand D Shendge, Nirmal Bang Securities
Economic Times of India
In a chat with ET Now, Anand D Shendge, Derivative Analyst, Nirmal Bang Securities Pvt Ltd, shares his views on the market and some stocks.

A Bearish Options Trade on 3D Systems (video)

Options Education

Panel on 10th Anniversary of VIX Futures Launch
By Matt Moran, CBOE Options Hub
A recent panel discussion at CBOE on March 26 marked the tenth anniversary of the launch of futures on the CBOE Volatility Index® (VIX®).
Four experts surveyed the development and promise of volatility products:
• Mike Edleson, Ph.D., CFA, Chief Risk Officer, Office of Investments, University of Chicago,
• Joanne Hill, Ph.D., Head of Investment Strategy, ProShare Advisors,
• Jamie Tyrell, VIX Options Market-maker, Group One Trading
• Krag “Buzz” Gregory, Ph.D., Managing Director, Goldman Sachs.
An audience of about 120 financial professionals was in attendance, and gave quite a bit of good feedback.

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