Observations & Insight

Take One: Data and Fintech Rocking The Free World
By Jim Kharouf, John Lothian News

Over the past two years, market participants have bemoaned the monetization of data by the largest exchanges.

CME raised the ire of the trading community last year with the increased data fees, especially at a time when many in the trading community were hurting from new regulation requirements, more technology investments to meet those demands, and a generally lousy trading environment with not a lot of movement in key markets. And there is the ongoing grumbling of traders that it is they who create the prices, not the exchange, and without them, there wouldn’t be any data to sell at all.

But an interesting thing is now happening in the data world. It is being given away for free in various new and interesting ways. True, this end-of-day data, along with various other types of data that is packaged, is not realtime. But that too may be of less importance to a growing number of traders who have discovered that the pure speed game is more or less over and the revived game of trading strategy has reemerged with the rise of more flexible and accessible trading technology.

What is emerging are platforms such as Barchart Direct, which puts all its historical market data on the cloud; Quandl, a free storehouse of all types of financial data; and Estimize (see the FinTech Exchange Chicago presentation HERE) a free site for earnings and economic estimates – all of which are challenging the status quo of Thomson Reuters, Bloomberg and others. Meanwhile, even Trading Technologies is getting into the act, offering its customers free access to Fundamental Analytics.

Read the rest of this report here and see the full presentation in Sway here

Lead Stories

Draghi Put Triggered After Worst Europe Stock Selloff of ’15
By Sofia Horta E Costa – Bloomberg Business
Now they’re buying the dip in Europe, too.
The Stoxx Europe 600 Index climbed 1.8 percent on Wednesday, the most in a month, to stanch a streak of declines that stretched to six days. It’s a pattern that is playing out with more frequency: the last two declines that lasted as long ended in gains of more than 7.5 percent in the following month.
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Is This the Right Time to Bet on Volatility ETFs?
By Sweta Killa – Zacks.com
The U.S. stocks finally managed to cross all hurdles that came in their way in the past few weeks with a sharp rise in yesterday’s trading session. Both the S&P 500 and Dow Jones industrials average posted their biggest one-day gains in more than a month. Though these gains were broad-based, the rally is unlikely to last long as a large number of concerns have already built up.
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Option traders ready for vol-ler coaster in China stock markets
GlobalCapital
News on Wednesday that index provider MSCI will not include stocks from exchanges in Shanghai and Shenzhen to its influential global benchmarks drew a frustrated response from Chinese officials worried that their market continues to be regarded with suspicion by international investors.
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Beyond VIX: Should Traders Fear Fear Itself?
By Adam Warner – Schaeffer’s Investment Research
The CBOE Volatility Index (VIX) is called the “fear index” by just about everybody, so it’s easy to forget that it’s merely one way to gauge fear among countless others. Fortunately, CNN quantifies several into their own proprietary Fear & Greed Index.
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Weidmann Echoes ECB View Bunds Can Handle Volatility Tantrum
By Jeff Black and Lucy Meakin – Bloomberg
European Central Bank Governing Council member Jens Weidmann added his voice to a united front from euro-area policy makers contending that a bond-market selloff is no cause for alarm.
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Long-term investors must hold their nerve, says Henderson’s bond chief
By Silvia Sciorilli Borrelli – Citywire
Reacting to bond volatility will ultimately be a good opportunity for longer term investors if they are able to take advantage of the short-term price dips, according to Henderson Global Investors’ head of fixed income Phil Apel.
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Exchanges

Nasdaq claims clearing costs ‘half of CME’
By Elliott Holley – Banking Technology
Clearing costs at Nasdaq’s new NFX futures venue will be half those on rival CME, the exchange claims. NFX is due to launch later this summer.
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CME Group Inc. Announces Second-Quarter 2015 Earnings Release, Conference Call – Jun 10, 2015
Press Release – Benzinga
CME Group Inc. will announce earnings for the second quarter of 2015 before the markets open on Thursday, July 30, 2015. The company has scheduled an investor conference call that day at 7:30 a.m. Central time.
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Should You Sell Intercontinental Exchange (ICE) Stock Now?
Nasdaq
On Jun 9, Zacks Investment Research downgraded Intercontinental Exchange, Inc. to a Zacks Rank #4 (Sell) from a Zacks Rank #3 (Hold).
Why the Downgrade?
Intercontinental Exchange has been witnessing downward estimate revisions after announcing its May 2015 exchange traded volume on Jun 3.
The average daily volume of futures and options for May declined 8% year over year to $4.9 million. Additionally, average daily volume of financials plunged 25% year over year due to persistent volatility in Continental European short-term interest rates along with single stock equities.
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MCX invites bid for sale of its warrants in MSXI
Economic Times
Racing against time, commodity exchange MCX today made a fresh attempt to sell warrants held by it in Metropolitan Stock Exchange
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Regulation & Enforcement

European regulators battle with derivatives reporting
By Joel Clark – Euromoney
A review of EMIR reporting is under way as the industry lobbies regulators to move to single-sided reporting for OTC derivatives and remove the reporting requirement for exchange-traded derivatives. What’s more, cross-border harmonization of derivatives regulation is way off.
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Regulators see slow progress on who pays for failed clearing house
By Huw Jones – Reuters
Global regulators have yet to agree on who would pay the trillions of dollars that would be needed to bail out any failed clearing house for derivatives, a senior European Commission official said on Friday.
While policymakers don’t want taxpayers to rescue clearers, central banks like the Bank of England and European Central Bank have said they would offer backstops to clearing houses in emergencies.
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Kruger: FX derivatives gains/losses taxed only when realized
By Timothy Fitzsimmons – Lexology
In Kruger Incorporated v. The Queen (2015 TCC 119), the Tax Court held that the taxpayer could not value its foreign exchange options contracts on a mark-to-market basis, with the result that certain losses were not deductible by the taxpayer in a year. The Kruger case is another recent judgment of the Tax Court in the developing law on the Canadian tax treatment of financial derivative products (see George Weston Limited v. The Queen (2015 TCC 42).
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Technology

Bitcoin technology will disrupt derivatives, says banker
By David Wigan – IFRAsia
The technology underlying crypto-currencies such as Bitcoin is likely to be a disruptive force in the derivatives market in the coming years, with settlement, trading and securities issuance most likely to be impacted, according to bankers and technologists.
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New Fidessa Service Helps Traders Adjust Algos “On the Fly”
By John D’Antona Jr. – Traders Magazine Online News
And you thought ice hockey was the only time that adjustments to strategy could made as the action unfolded.
Well no more, as Fidessa has launched a new analytics service that provides real-time measurement of progress against interval VWAP, TWAP and arrival price algorithms through a series of interactive, highly graphical displays, allowing traders to adjust their algos ‘on the fly.’
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Strategy

Tight Ranges Make S&P 500 Options Attractive
GuruFocus.com
The majority of the financial headlines in stocks have been largely positive for most of this year. There is good reason for this, as many of the central benchmarks continue to trade near record levels. But what has been largely missed in the financial media is the fact that bullish momentum in equities has reversed sharply and this has led to diminished gains over the last six months. It also means that markets are now caught in extremely tight trading ranges that have made it difficult for those employing traditional stock strategies to make substantive gains.
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