Lead Stories

Dow Tops 17000 in Intraday Trading After Strong Jobs Report
Chris Dieterich and Min Zeng – WSJ
The Dow Jones Industrial Average rose above 17000 for the first time in intraday trading after a stronger-than-expected report on U.S. job creation in June helped reassure investors that economic growth can support stock benchmarks at all-time highs.
The 30-stock Dow was up 65 points or 0.4% to 17042 in midmorning trading. The S&P 500 added six points, or 0.3%, to 1980, while the Nasdaq Composite Index climbed 16 points, or 0.4%, to 4474.

VIX Drops Further Into The Red
Momentum fizzled with evident choppiness and volume waned but the VIX dropped into the red even further to retrace recent lows and XIV hit another new high.
It was a mixed bag for stocks and once again we saw marginal weakness into the close.

JP Morgan names new FX options head
Robert Mackenzie Smith – FX-Week
JP Morgan has turned to the head of FX options in Asia to fill the shoes of previous global head Kayhan Mirza who left in March
JP Morgan has promoted James Ellery to global head of foreign exchange options and long-dated FX.  Based in Singapore, Ellery will remain in Asia, reporting to Claudia Jury and Pranav Thakur, global co-heads of FX and emerging markets (EM).

Weekly Market Commentary 7.3.14
Larry McMillan – CBOE Options Hub
$SPX is once again making new all-time highs. $SPX now has support at or near the 1950 area, which was the low of the most recent “correction.”  Below that there is support at 1925, where $SPX bottomed last week. The major support is at 1900, where a lot of work was done between March and May.

US equities: off exchange snapshot
Automated Trader
TABB’s liquidity matrix report for May had some largely expected shifts within the market, but some surprises as well in the wake of FINRA’s first publicly released data set.
The figures show that industry and TABB-reported dark pool volumes sank 13% in May to 5.8 billion average daily volume from 6.6 billion in April. Speaking to Automated Trader, Valerie Bogard, analyst at TABB Group, said it is not that unusual to see volumes go down during the summer months.

Barclays Probe Casts Ugly Light on Dark Pools
Matthew Philips – BloombergBusinessweek
In a 30-page complaint against Barclays (BCS) last week, New York Attorney General Eric Schneiderman levels accusations of fraud in its private “dark pool” trading venue called Liquidity Cross, or LX.
The complaint lays out what Bloomberg News’ Sam Mamudi and Doni Bloomfield describe as a “market structure nightmare”: Barclays executives allegedly hoarded client trading orders to funnel them into the dark pool and mislead clients about the amount of high-frequency trading that goes on there. Barclays also allegedly removed evidence of its largest high-frequency customer from a presentation, and Schneiderman accuses executives of pressing a senior director to withhold data that suggested the company favored itself over its clients.

How Business TV Can Win Me Back
Adam Warner – Schaeffer’s Investment Research
As you enjoy your fireworks and your beach trips and your BBQs this weekend, keep some thoughts of CNBC in your mind. The erstwhile financial news giant continues to go the way of the family sitcom.


Intercontinental Exchange Reports ICE and NYSE Volume for June and Second Quarter 2014; Brent Open Interest Record and 18% Increase in June ADV
Press Release (ICE)
Intercontinental Exchange, Inc. (NYSE: ICE), the leading global network of exchanges and clearing houses, today reported exchange traded volumes for June and the second quarter of 2014.
For June and the second quarter of 2014, futures and options average daily volume (ADV) decreased 26% and 20%, respectively, compared to prior year periods.

Regulation and Enforcement

Another Failure to Regulate Derivatives
NY Times
By the time the Securities and Exchange Commission finalized a rule last month to regulate derivatives under the Dodd-Frank financial reform law, the big banks that dominate the multitrillion-dollar market had already figured out how to game it.
This is not a tale, however, of how wily banks always find a way around the rules. In this case, the S.E.C. has written and passed a rule that is custom built for evasion, all the while insisting, unconvincingly, that it does not have the legal authority to be any tougher.


Scared to short GoPro? Here’s another option
Alex Rosenberg – CNBC
GoPro’s current tagline is “Be a Hero.” In fact, that’s just the kind of adventurous mindset one might need in order to short shares of the wearable camera maker that recently went public.
GoPro priced its IPO at $24, and since then, shares have risen as high as $49.90. On Wednesday, the stock took a break, sliding more than 12 percent, as skeptics scrambled to get short. But a new possibility for those who want to bet against the stock will likely come on Monday, when the Chicago Board Options Exchange (more commonly known as CBOE) has said they are planning to list options on GoPro.

Options Education

Bleeding Theta? Scalping Gamma? A Summer Review Of Options Trading Basics | Options
Steve Smith – Minyanville’s Wall Street
Options are a valuable investment tool that can both boost returns and reduce risk — but only when used properly.
And with the US out of the World Cup and a long July 4th weekend ahead, we have time to bone up on some basic options trading principles.
I’ll tee up a few topics and also offer some reading suggestions for those who want to delve deeper and don’t mind being spotted on the beach with an options book.


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