Observations and Insights


Exchange CEO Series – Singaporean shift: SGX’s Magnus Böcker says region is primed for growth

SGX CEO Magnus Böcker has seen tremendous growth at his exchange over the past year and the Singapore market is poised to expand further in the coming year.
Bocker, who sat down with JLN editor-in-chief Jim Kharouf at the FIA Boca Conference this month, said SGX has increased its derivatives volume 40 percent in 2013 and is exploring a host of new partnerships and initiating new product launches.

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Lead Stories

Mini options struggle to maximise potential
Jonathan Watkins – FOW
Mini options based on five of the most liquid US stocks are struggling to match early market expectations one year after launch as the products aimed at retail investors have failed to build traction
***** JL: If you want to reduce your risk , or at least cost, in options, do a spread or pick another strike price. Options traders are sophisticated.

Contango Takes A Breather
By Vance Harwood, Investing.com
VXX hasn’t hit a new low in 6 weeks, and it’s not because the market is crashing.   What has changed is the shape of the VIX futures term structure—the underlying futures that the various volatility Exchange Traded Products (ETP) like VXX, XIV, TVIX, and ZIV are based on (see volatility tickers for the entire list).

Nasdaq rally gets Candy Crushed
Business Day
After a rally that sent technology stocks to levels approaching the internet bubble, the air is coming out of the balloon. Shares such as Facebook, Netflix, Tesla Motors, Priceline.com, Baidu and TripAdvisor are down more than 13 per cent since the Nasdaq 100 Index reached a 13-year high March 5.
That’s pushed the cost of options on the gauge to the highest level since 2008 relative to the Standard & Poor’s 500 Index. The Nasdaq 100 has rallied 243 per cent in five years.

Will Higher Interest Rates Drive Higher VIX Levels?
Weeden & Co. Chief Global Strategist Michael Purves discusses investing in volatility with Cristina Alesci on Bloomberg Television’s “Street Smart.”

India VIX signals up in market volatility
MyIris News
India VIX, a volatility index, gained on Friday. The index is currently trading at 18.61, up 1.29% from 18.37. It witnessed a high of 19.15 and low of 17.09 after opening at 18.37 (at 11.33 pm).


Atlas ATS First to Announce Options on Bitcoin
Hong Kong, London and New York – 28 March 2014
Press Release via Bobsguide
Atlas ATS, the only FIX protocol Wall Street grade exchange platform for digital currencies announced today a new platform, Atlas 2.0,  for trading in alt coins, options for digital currency and an array of advanced native order types for FIX API clients. Atlas 2.0 has been launched in Hong Kong and North America where Atlas ATS has established digital currency exchanges.

Unusual Activity Alert: Combos Trade in VIX
The Options Insider
The CBOE Volatility Index (VIX) is 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 17/23 call spreads at $.625.  The ADV is 759k contracts.  The OI is huge on all strikes.

Weekly Market Commentary 3.27.14
By Larry McMillan, CBOE Options Hub
(Editors Note:  Larry sent this to us one day early due to a travel commitment).
The Standard & Poors 500 Index ($SPX) has been bouncing around within a trading range for nearly a month now.  There is resistance at 1880+ (the all-time highs) and there is support at 1840 (most recently tested a couple of weeks ago).  There is validity to the theory that it is being wound up like a coiled spring, and could therefore explode with some force once the range’s limits are broken.

Regulatory and Enforcement

CFTC Staff Issues an Extension of Time-Limited No-Action Relief to LCH and Nodal
Press Release via Futures Magazine
The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) and Division of Market Oversight (DMO) today issued an extension of time-limited no-action relief to LCH.Clearnet Limited (LCH), a derivatives clearing organization (DCO) registered under Section 5b of the Commodity Exchange Act (CEA), and Nodal Exchange LLC (Nodal), a designated contract market (DCM) under Section 5 of the CEA.


Nasdaq OMX Blazed Datacenter Hosting Trail 10 Years Ago
Greg MacSweeney – Wall Street & Technology
Ten years ago Nasdaq OMX moved its matching engines and corporate technology to a Verizon datacenter. The decision turned heads in the financial services world. Today, the practice of utilizing third-party datacenter services is becoming commonplace.

Data Standardization: No Longer a Luxury
By Stuart Keeler – Wall Street & Technology
It is becoming increasingly clear the Alternative Investment Fund Managers Directive (AIFMD) will place greater emphasis on the capture, manipulation and dissemination of large amounts of complex data. New valuation processes, risk management, and capital requirements are among the key components of the new Directive that will create a very real data challenge.

Options Education

Options Bootcamp 42: Legging & Protecting Gains
by Mark S. Longo, The Options Insider
Basic Training: Legging and Protecting Gains
What is legging?
How do you leg into a vertical call spread?
When should you leg a spread? When should you not leg a spread?

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