Lead Stories

Investors bet on higher volatility
Jamie Chisholm – Financial Times
Despite supposedly being a volatility gauge – and, granted, Tuesday was a bit twitchy – Bloomberg calculates that the Vix moves in the opposite direction to stocks 80 per cent of the time.
But what was particularly noteworthy was the underlying action in the Vix complex.

Volatility rising: why stockpickers will rule this market
Matt Nesto – Yahoo Finance
Three weeks into the new year and stocks have nothing to show. After sprinting to multiple  record highs in December, the S&P 500 (^GSPC) is essentially flat for the year, which is just fine for some investment pros.

Hot/Cold ETF Sector Movers Of Early-2014
Moby Waller – CBOE
Taking a look at some of the year-to-date (ytd) ETF winners and losers, screened for optionable/shortable and with over 100k daily average volume, some interesting names are outperforming and underperforming the S&P 500 Index (SPX) (SPY) in the early going of 2014.  We’re looking at pure sector plays here, so no Ultra, Inverse, Bear. 3x, etc ETFs.

30th Annual CBOE RMC Agenda is Complete
Russell Rhoads – CBOE
Just as I was leaving CBOE for the three day weekend I received an email regarding the 30th Annual CBOE Risk Management (RMC) conference that is scheduled for March 17th – 19th.  I was being informed that the speakers and agenda are set for something that I look forward to each spring.

Videocast: Big selling in VIX pits

3 best hedge fund managers of 2013
Meena Krishnamsetty – MarketWatch
Hedge funds underperformed the S&P 500 index by a large margin in 2013. This fact is startling but it’s still meaningless. Unfortunately, most investors and journalists don’t understand this. Comparing returns without adjusting for risk will lead to the wrong conclusions. An average hedge fund returned around 6.5% in 2013 whereas the S&P 500 index returned more than 29%.


Stung by penny stock scandal, Singapore Exchange bets on derivatives
Anshuman Daga and Manolo Serapio Jr – Reuters
Singapore Exchange Ltd reported its weakest quarterly profit in more than a year on Wednesday after a penny stock scandal hammered stock trading volumes, with revenue from its derivatives business outstripping securities for the first time.

Regulation and Enforcement

Corzine fails to win dismissal of CFTC’s MF Global lawsuit
Joseph Ax – Reuters
A federal judge on Tuesday rejected a bid by former MF Global Holdings Ltd Chief Executive Officer Jon Corzine to dismiss a U.S. regulator’s lawsuit that claims he played a key role in causing one of the country’s biggest bankruptcies ever.
**No doubt when things were going well he was responsible for all of it and deserved fantastic compensation for his great work.  When it went to hell it is due to reasons beyond his control.  Duh! -JB

CFTC to Address Data Problems Clouding Swaps Transparency
Andrew Ackerman – The Wall Street Journal
U.S. commodity regulators are taking steps to resolve a series of data problems that have hobbled their efforts to see more clearly into the multitrillion-dollar swaps market.


How To Collect 9.6% Yields From A Stock Yielding 2.0%
I can’t believe more people aren’t taking advantage of this…
With bond yields near record lows and traditional income securities like savings accounts and certificates of deposit earning next to nothing, we’re regularly finding “instant yields” as high as 9.2%… 13.7%… and even some as much as 19.8%.
**It’s articles like this that tell part of the story of why retail volume in options is up. -DA

VIX Calls: To Play or Not to Play
Adam Warner – Schaeffer’s Investment Research
The market has gone essentially nowhere so far in 2014. Realized volatility has, however, ticked up ever so slightly, though we’re not exactly exploding here. The 10-day realized volatility in the S&P 500 Index (SPX) was as low as six a few weeks ago in the throes of the year-end slumber. We’re now back up into double-digits! Barely.

Protect Yourself From A Treasury Bond Crash
William Baldwin, Forbes
Treasury paper will not go into default, since the government can always print (and has been printing) the money it uses to pay its bills. But a distinct possibility is that lenders like China stop enabling American profligacy, with the result that interest rates go up and prices of Treasury bonds decline.
How do you make money from this crash—or at least lessen your losses from it?

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