JLN Options: CBOE To Expand Offerings With Treasury, Short-Term VIX Futures; U.S. Trading Volume Continues To Shrink; OIC Launches New Investor Education Mobile App

Jan 16, 2014

Lead Stories

CBOE To Expand Offerings With Treasury, Short-Term VIX Futures
Kaitlyn Kiernan – The Wall Street Journal
The Chicago Board Options Exchange, CBOE the largest U.S. options exchange by trading volume, plans to further expand the number of ways investors can trade market volatility, both with its well-known Volatility Index franchise, and in new markets such as Treasury bonds.

U.S. Trading Volume Continues To Shrink
Dan Strumpf – Bloomberg (via The Wall Street Journal)
Stock trading volumes in the U.S. are continuing to decline, according to a report from Credit Suisse.
Just how much were volumes down? The busiest trading day of the year ranked only 148 on a list of the all-time busiest days.

OIC Launches New Investor Education Mobile App
Press Release (OIC)
The Options Industry Council (OIC) announced today a new mobile application for iOS devices. Investors can now enjoy OIC’s options education on the go by downloading the OIC app available for iPhone and iPad devices. This free app offers select OIC courses, an interactive strategy section, and delivers the latest information on OIC’s upcoming events and seminars.
**I have it on good authority that an Android version is in the works. -JB

OptionsCity Sees Growth in Electronic Energy Options Trading
Press Release (OptionsCity)
OptionsCity, a leading provider of multi-asset electronic trading solutions for professional futures and options traders, said today that it is seeing a strong demand in the energy markets, where electronic trading at NYMEX and ICE exchanges has rapidly expanded over the past year. To help energy traders capitalize on these increasingly electronic markets, OptionsCity has made enhancements to its Metro and Freeway software offerings.

Bell-Ringing Today for ETF that Tracks CBOE NASDAQ-100 BuyWrite Index (BXN)
Matt Moran – CBOE
This morning I had the privilege of participating in a market-opening bell-ringing in New York City for a new ETF that is designed to track the CBOE NASDAQ-100 BuyWrite Index (BXN).
The new ETF is the Recon Capital NASDAQ-100 Covered Call ETF (ticker QYLD).  In my brief remarks I noted that many investors now are searching for instruments with high yields and the potential for strong gains in times of low interest rates.

Videocast: Weekly buyers in VXX

Stocks Rise on Optimism — For How Long?
Randall W. Forsyth – Barron’s
It is the best of all possible worlds for investors, until reality sets in.

While a little market volatility would be welcome
Bill Peattie – Fox Business
As I mentioned previously, the hardest part of 2013 for Peattie Capital portfolio was staying invested, as there were a number of scary headlines. Peattie Capital’s investment process of focusing primarily on individual stock selection but also remaining flexible and opportunistic and having an opinion about the overall environment led to solid returns last year.


Derivatives exchanges raise the stakes
Jonathan Watkins – FOW
Some of the world’s largest derivatives exchanges are building up a portfolio of investments in bourses around the globe to tap into the potential of some of the world’s fastest growing markets.

CME Group Sued by Long-Time Members Over Exchange Changes
Andrew Harris – BloombergBusinessweek
CME Group Inc., owner of the biggest futures market, was sued by shareholders who started with the exchange in the 1970s and claim operational changes to their trading rights have diluted the value of their memberships.

ICE Drops Most Since 2011 After Europe Revamps Trading Rules
Matthew Leising – BloombergBusinessweek
Shares of IntercontinentalExchange Group Inc. (ICE:US), the owner of Europe’s second-largest futures market, declined the most in two years after the European Union agreed to increase competition among derivatives exchanges.

Regulation and Enforcement

EU Lawmakers Seal Deal on Financial Market Rules Overhaul
Jim Brunsden – BloombergBusinessweek
European Union lawmakers clinched a deal to toughen the bloc’s financial-market rulebook, backing sweeping measures that will put the brakes on high-frequency trading and curb speculation in commodity derivatives.

Brokers OK With Disclosing Routing Methods to FINRA
John D’Antona Jr. – Traders Magazine
Broker-dealers are OK with disclosing their order-routing practices should the Financial Industry Regulatory Authority ask them about their procedures.
This comes in the wake of a Bloomberg News interview last week with Finra execs that said brokers can expect to see a questionnaire asking for more information on their order routing methodology and/or decision making process. 

Industry hails last-ditch MiFID II agreement but uncertainties remain
John Bakie – The Trade
European politicians reached agreement on the core rules of MiFID II last night, but industry experts warned there is a lot of work still to be done before the legislative framework is complete.


Nasdaq options glitch highlights need for faster technology
Richard Henderson – The Trade
A Friday data error that stalled trading in some instruments on the Nasdaq Options Market is a signal of faster trading requirements in the US options market, which may see such glitches become commonplace, one options exchange expert has said.


Options Market Forecasting Future Gold Price Action Direction
Boris Mikanikrezai – The Market Oracle
I discuss how the gold options market is pricing calls and put to gauge traders’ sentiment and figure out whether gold option traders are biased for downside or upside price action.
Let’s use risk reversals to assess the future evolution of precious metals.

How To Boost Your Dividend Yield
Jeff Miller – Investing.com
In my “Weighing the Week Ahead” series, I always include some suggestions for individual investors. I try to share with the do-it-yourself investor what I am doing for my clients. I have suggested that investors who have been out of the market can step in gradually by purchasing the stocks of strong companies with reasonable dividends and enhancing the yield by selling near-term calls.

Options Education

A Short Iron Condor
Wall Street Sector Selector
It is essentially combining two credit spreads as one trade. The trade is executed by buying a lower-strike out-of-the-money put and selling an out-of-the-money put with a higher strike. Then the trader sells an out-of-the-money call with a higher strike and buys another out-of-the-money call with an even higher strike.

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