Observations & Insight

Battling Adversity
Jim Kharouf – JLN
Every year, our Marketswiki Education series provides great speakers with great advice to summer interns and young professionals. But sometimes, there is one that just stands out because it is valuable to everyone, no matter where they are in the careers. Such is the case in today’s newsletter, where we posted the presentation from Lisa Dunsky, senior compliance officer at OCC. There are times where you just tell people to watch something, without the big set-up. This is one of those. If you are facing adversity in your career or life, this one will help you. Check it out below.

This is the first of more than 25 presentations from our Chicago and New York MarketsWiki Education events. There are some great presentations. Stay tuned.

Lisa Dunsky, OCC – Hit By A Brick: How Setbacks Shape Your Career

MarketsWikiEducation.com

“Sometimes life is going to hit you in the head with a brick. Don’t lose faith.” – Steve Jobs, at the commencement speech at Stanford in 2005.

It’s sometimes hard to see what challenges and setbacks will do for your career, but in this very personal and articulate presentation, Lisa Dunsky, senior compliance officer at OCC, describes how tragic events can transform your skill set and your career.

Speaking at the MarketsWiki Education World Of Opportunity event in Chicago in 2016, Dunsky tells the story of the October 2005 meltdown of Refco, the publicly traded brokerage firm that went bankrupt after its CEO, Phil Bennett, covered up $430 million in customer losses and debt. Bennett and other executives, including Dunsky’s boss and mentor at the outside law firm she worked for that represented Refco, were convicted and sentenced to prison for securities fraud. Devastated, Dunsky learned from the experience in the most unexpected places and built a career path that led her to her current role today at OCC.

“This brick that just hit me in the head, of losing my mentor, was going to teach me something I don’t think I could have learned any other way.”

She learned how to pick herself up, build on the skills needed to succeed in the derivatives industry and deal with other bombshell events such as the MF Global bankruptcy and Lehman Brothers’ collapse.

Watch the video »

Lead Stories

A BOJ ‘Mega Surprise’ Could Come Even Without Boosting Stimulus
Chris Anstey – Bloomberg
In the roulette game of Bank of Japan policy forecasting, most players are betting on Governor Haruhiko Kuroda to double down on some or all of his current three main policy tools on Friday.
bloom.bg/2axIz5H

****SD: No more guns and ammo, on to central bank gambling metaphors. If BoJ is a game of chance, I don’t want to play — house has the edge.

Barclays Bank PLC Announces Reverse Split of Two iPath Volatility ETNs
Press Release
Barclays announced today that it will implement a 1 for 4 reverse split of two series of its iPath ETNs (together, the “ETNs”) effective Tuesday, August 9, 2016: iPath S&P 500 VIX Short-Term FuturesTM ETN (“VXX ETNs”) and iPath S&P 500 VIX Mid-Term FuturesTM ETN (“VXZ ETNs”).
goo.gl/25Pbc5

KCG Buys Swedish Broker Neonet to Expand its Europe Business
John Detrixhe – Bloomberg
Takeover of the execution specialist may complete this year; KCG didn’t disclose price of the the Neonet acquisition
Algorithmic trading firm and brokerage KCG Holdings Inc. is buying 20-year-old stockbroker Neonet Securities AB as the U.S. company seeks to expand its presence in Europe.
bloom.bg/2axKE1r

****SD: I wonder if this was the result of picking the blue pill or the red pill…

Financial Services in the Millennial Age
Maven Wave
Love them or hate them, Millennials are poised to dramatically change the world of financial services – and in many cases the change has already begun. What makes this group, the largest generation in the history of the U.S. and the world, unique and how are some companies adapting to meet their needs? Much has been written about Millennials; from the bad (lazy, entitled, self-obsessed narcissists) to the good (open-minded, upbeat, and collaborative) but one thing is obvious: they can’t be ignored.
goo.gl/vxlRRT

****SD: OptionsHouse (which was acquired by E-Trade this week) gets a section about their mobile-first development plan.

The Economy Is Again Under the Sway of Asset Prices
Greg Ip – WSJ
The past two recessions were ushered in by a collapse in asset prices. The risk of a repeat is growing. After plunging in the aftermath of Britain’s vote to leave the European Union, U.S. stocks have hit fresh highs. Real estate is quietly doing the same: home prices are just 2% below the peak hit in 2007, while commercial property values have hit records.
on.wsj.com/2axOIPo

Interactive Brokers Adds Block Trading and Upgrades Trader Workstation
Victor Golovtchenko – Finance Magnates
Interactive Brokers has just announced a set of novelties to its trading platform Trader Workstation which are aimed at improving the offering of the brokerage to its clients. The additional features which are described in an official announcement are likely to materially improve execution for clients in certain cases.
goo.gl/cqGESZ

****SD: Official statement from IB: “Working with the Block Trading Desk also offers the potential advantage of price improvement on options trades, including SPX and VIX contracts. Clients may also get pre-trade quotes ahead of time for any strategy.”

Exchanges

Nasdaq Notches Greater Revenue Across All Its Units
Austen Hufford – WSJ
Nasdaq Inc. said Wednesday that its second-quarter profit fell but revenue increased across all of its segments as the company continues to integrate a number of acquisitions. Results beat Wall Street expectations.
on.wsj.com/2axJGCa

****SD: Reuters here

NYSE Arca and BATS Adopt Generic Listing Standards for Active Exchange-Traded Funds, Which May Expedite Fund Launches
Dechert LLP – JDSupra
NYSE Arca, Inc. and BATS BZX Exchange, Inc. (each, an Exchange) separately received U.S. Securities and Exchange Commission (SEC) approval on July 22, 2016 to adopt generic listing standards for exchange-traded funds (ETFs) that are actively managed (Active ETFs).1 These generic listing standards (Listing Standards) will allow an Active ETF that meets the applicable requirements to list on an Exchange without specific approval from the SEC’s Division of Trading and Markets staff.
goo.gl/C1NXUM

SGX reports FY2016 net profit of $349 million
SGX
Singapore Exchange (SGX) today announced net profit of $349.0 million for FY2016, unchanged from the previous year. This included an impairment charge of $6.0 million on SGX’s investment in the Bombay Stock Exchange. Revenue was $818.1 million, up 5%. Earnings per share was unchanged at 32.6 cents per share. The Board of Directors has proposed a final dividend of 13.0 cents per share, bringing total dividend for the year to 28.0 cents per share, unchanged from a year earlier.
goo.gl/wUUrYh

Euronext Pursues Innovation Strategy with Tredzone
Euronext
Euronext, the leading pan-European exchange in the Eurozone, has signed a partnership agreement with Tredzone, a technology solution provider specialised in developing software tools for handling complex data with high volumes and guaranteed latency.
/goo.gl/c6hmnF

Nadex Q2 2016: Record Growth Continues as Exchange-Traded Binary Options Go Mainstream
Press Release
As first announced in the positive Q2 report from its parent company, IG Group (LSE:IGG), Nadex-The North American Derivatives Exchange saw the total number of trades and the overall trading volume on the exchange in the second quarter of 2016 grow by nearly 40% versus Q2 of 2015. The growth in trading volume reflects continued mainstream enthusiasm for exchange-traded binary options and spreads.
prn.to/2axIX3V

Merger expert questions union between LSE and Deutsche Boerse
Hayley McDowell – The Trade
An expert in corporate ‘mega mergers’ has questioned whether the London Stock Exchange (LSE) and Deutsche Boerse merger will be worth the trouble. Professor of Practice at Warwick Business School in the UK, John Colley, explained that the regulatory, competition and political approval process could lead to significant delays and amendments.
goo.gl/GUS6A2

Regulation & Enforcement

Judge rejects sanctions in dispute over options market manipulation
Reuters
A federal judge has rejected a motion to sanction lawyers at Berger & Montague and Bragar Eagel & Squire who sued Sumo Capital for allegedly scheming with other dealers to manipulate the stock options market, ruling that plaintiffs’ claims were not frivolous though they were ultimately dismissed.
reut.rs/2axOgAv

Technology

Steven A. Cohen’s Newest Bet: Do-It-Yourself Computer Traders
Bradley Hope – WSJ
Steven A. Cohen is betting as much as a quarter billion dollars that mechanical engineers and nuclear scientists can come up with market-beating mathematical models in their spare time. The investment of as much as $250 million will go to a hedge fund launched by Boston investment firm Quantopian. That fund provides money to do-it-yourself traders who come up with the best computerized investing methods, giving a share of any profits to the creators.
on.wsj.com/2axPWK8

Strategy

Indicator of the Week: The Impact of Winning and Losing Streaks on Stocks
Rocky White – Schaeffer’s Research
Last Thursday, the Dow fell 0.4%, which ended a nine-day winning streak. Going all the way back to 1900, it was only the 32nd time the Dow saw a winning streak that long. Additionally, on Monday, General Motors Company (NYSE:GM) fell 0.3%, ending a winning streak that began on July 6 and lasted nearly three weeks (it totaled 13 trading days). This naturally made me curious if anything could be deduced from these winning streaks. Do winning streaks tend to end with sharp down moves? Does underperformance tend to occur after lengthy winning streaks (or vice-versa for losing streaks)? This week, I’ll take a look at how the Dow has performed after these winning streaks. Then, I’ll take a look at how stocks behave, depending on whether they’ve seen either winning streaks or losing streaks.
goo.gl/kxxd8q

Education

Trading Risk and Uncertainty Create Stress. Here’s How to Manage
Kira Brecht – The Ticker Tape
Sometimes the best starting point for a trading system or even a general approach to the markets is to look within. No matter what your trading style, the way you manage stress could make a difference in your profit and loss.
/goo.gl/bHFVG7

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