Observations & Insight
Women have come a long way in the financial sphere. As recently as 1989, when Illyce Glink, the founder and president of Think Glink Media, went with her husband to a bank to apply for a mortgage, the banker they spoke with – a woman – told her there was no need for her to put her own income on the form. “Oh honey, your income doesn’t really matter. We’ll use your husband’s,” the banker said. Glink was then – and is now – a self-employed woman who bought shares of Intel and “a small company called Microsoft” in 1987. Last week, she spoke at an event called “Smart Money, Smart Women, Smart Options” held at the Chicago Board Options Exchange as part of Chicago’s Money Smart Week. The event was dedicated to women’s advancement both in the finance industry and with their own personal finances.
As far as women have come, many feel there are still big roadblocks, including social biases against women taking the reins of finance. A top issue on the agenda is equal pay. April 12 was this year’s Equal Pay Day, the symbolic day when women’s earnings “catch up” to men’s earnings from the previous year. Women need to make it their goal to achieve pay equity by 2020, said Dorri McWhorter, who introduced the event. As CEO of YWCA Chicago, she works on programs to provide girls with STEM awareness and adult women with web and mobile application training, among other things. “We don’t need a woman on the $20 bill,” she said. “We need more Benjamins in our pockets.”
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Buffett Says Derivatives ‘Time Bomb’ May Elude Auditors’ Reviews
Sonali Basak and Noah Buhayar – Bloomberg
Warren Buffett said banks’ holdings of derivatives make it unattractive to invest in most large financial firms and that the contracts still contain hidden risks.
“Some of these things get so complicated that they’re very hard to evaluate,” Buffett said Saturday during the annual meeting of his Berkshire Hathaway Inc. in Omaha, Nebraska. “They can be extraordinarily hard to mark,” he said. “The auditors, I don’t think, are necessarily capable of holding that behavior in check.”
Oil Bulls Bet the Waning U.S. Shale Boom Will Curb Global Glut
Hedge funds are rooting for a quick collapse of the U.S. shale boom.
Money managers turned the most bullish since May as West Texas Intermediate crude climbed to a five-month high on optimism that falling U.S. production and rising fuel demand will trim the global glut. Investors shrugged off an inventory gain that left supplies at the highest since 1929.
Europe’s Price for Deflation Protection Drops to 17-Month Low
Eshe Nelson – Bloomberg
Signs that bond traders are becoming more confident that the European Central Bank’s unprecedented stimulus will boost inflation are gathering as derivatives which protect against deflation dropped to a 17-month low.
Weekly Market Outlook – Is The Market Rolling Over?
Price Headley – CBOE Options Hub
Following through on the budding bearish effort from two weeks ago, the bears fended off a bullish bounce-back effort over the course of the first half of last week. It wasn’t meant to be, however. Between Thursday’s and Friday’s high-volume selling, the S&P 500 (SPX) (SPY) booked a 1.2% loss last week, and broke below some key support levels in the process. If history is any indication, this stumble may well be the beginning of a more serious pullback.
The Option Queen Newsletter
What does a weaker US Dollar mean for you and multinationals? Just as we advised almost a year ago, that a strong US Dollar was deflationary and would hurt US multinationals, we are now suggesting that a weaker US Dollar will be good for multinational earnings. The fly in this result would occur if the global competition fights for their newly acquired market share by cutting prices.
Volatility Update: VIX ready to rocket?
Georgio Stoev – TradingFloor
US equity indices appear to be peaking and might be poised for a pullback. On the fundamental front, first-quarter earnings brought little to improve investors’ sentiment in equities and the economy.
ICE may have more time to consider bid for London bourse
Sophie Sassard and Huw Jones – Reuters
London Stock Exchange Group and Deutsche Boerse may have to delay a vote on their proposed merger until after Britain’s EU referendum, handing more time to Intercontinental Exchange (ICE.N) to decide whether to make a counter-bid for the British bourse.
We plan to launch options and trading in indices: Parveen Kumar Singhal, President, MCX
Tarun Sharma – DNA India
In the past few years, commodity exchange MCX has faced survival issues such as the imposition of Commodity Transaction Tax, NSEL scam that came to light in July 2013 and the exit of almost entire senior management. Parveen Kumar Singhal, president & whole time director at MCX, took charge of the day-to-day affairs of the company in May 2014, at a time when the average turnover and the market share of the exchange had fallen.
OCC Cleared Contract Volume Increased Two Percent in April
Press Release – OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that cleared contract volume in April was 339,522,257 contracts, up two percent from April 2015 monthly volume of 331,552,965 contracts. Average daily volume at OCC is up five percent in 2016 with 17,123,650 contracts. OCC’s stock loan program reported strong volume numbers in April with year-to-date activity up 44 percent.
Regulation & Enforcement
China securities regulator urges commodity exchanges to curb speculation
Samuel Shen and Pete Sweeney – Reuters
China’s securities regulator said on Friday it has urged commodity futures exchanges to strengthen supervision and curb excessive speculation.
FIA President Bemoans Deleterious Leverage Ratio Impact on Derivatives Clearing Before Agricultural Subcommittee
Walt Luken, president and chief executive officer of the Futures Industry Association, testified last week before the House Agriculture Subcommittee on Commodity Exchanges, Energy and Credit, claiming that Basel III capital requirements “are lessening clearing options for end-user customers who use futures and cleared swaps to manage their business risks.”
CME Group fines, bars two UAE futures traders over ‘spoofing’
Tom Polansek – Reuters
Two futures traders in the United Arab Emirates banned from U.S. commodity markets last month for the disruptive practice known as “spoofing” faced additional penalties from CME Group Inc on Thursday.
Algo-Logic Systems Releases CME Futures & Options Order Book
Rosemary Barnes – Finance Magnates
Algo-Logic Systems, a provider of Gateware Defined Networking products and solutions, has announced the release of its latest CME Futures & Options (F&O) Order Book. The F&O Order Book was created for futures and options exchanges, market makers, hedge funds and traders who require real-time market data and knowledge of the best bid and ask prices for the instruments they trade.
Some Options Traders Are Betting Big on “Sell in May”
Steven M. Sears – Barron’s
Recent trading patterns suggest that some investors are making a high-stakes bet that the “sell in May and go away” seasonal trading pattern soon will be roiling stocks.
For weeks, investors have amassed massive positions that will increase in value if the Standard & Poor’s 500 index drops in May and the CBOE Volatility index surges.
2016 SPX 500 Chart Has Similar Pattern as 2008
Bob Lang – CBOE Options Hub
We often look at charts to find recognizable and repeatable patterns, hoping to take notice of a previous move that may have a high probability of happening again. In the universe of technical analysis, there are a plethora of technical patterns with setups for both bullish and bearish plays. You can find a nice sampling of those below. But the important takeaway from the analysis is to have an open mind without bias, identify a pattern and which way is most ‘likely’ and play it accordingly. We’re not always going to be right, but this is not a game of perfect. Below are some of the most identifiable candlechart patterns that I use.
The Five Best Stocks To Short In May
John Carter – Forbes
The Bank of Japan (BoJ) stunned the world last week by holding off on expanding monetary stimulus. With the yen rising and inflation continuing to fall, it was believed that the BoJ has little choice but to pursue even looser monetary policy. Some are grumbling that they were pressured to hold off on additional stimulus to help encourage continuing weakness in the U.S. dollar.