Is The Options Market Partying Like It’s 1999?
Adam Warner – Schaeffer’s Investment Research
Is tech in a 1999-esque bubble? With the Nazz hitting new highs, I’m contractually obligated to ask that question. If I had a TV show, I would have to have two guests on. One would say, “Yes, of course we are in a bubble, sell everything before it’s too late.” The other would say, “No. Unlike 1999, multiples are not extended, especially for mature companies.”
The OCC looks to a bright confident day
FTSE Global Markets
This is a time in financial history when the post trade segment is truly coming into its own. Globally the segment is replete with institutions at a crossroads: some will fall by the wayside; some will be cowed by the change befalling the segment and dawdle in the doldrums and yet others will rise to the occasion.
Bad market math: P-E ratios up, fear gauge down
Adam Shell – America’s Markets
Investors looking for something to worry about as stocks trade near record highs might consider this: Equity valuations are above-average but fear readings are low and signal complacency.
So says Patrick Adams of Choice Investment Management.
He notes that with the stock market back at new highs after taking out prior records from early March, the market appears to be a little ahead of itself at the moment.
Traders hit jackpot shorting technology stocks after TCS results
The Economic Times
MUMBAI: Savvy derivatives traders made a killing last week by building short positions through put options in technology shares such as Infosys, Wipro, and HCL Tech. These traders placed their bets anticipating that technology companies will deliver weak results, after TCS earnings initially disappointed the market on April 16.
What the VIX is really saying about the stock market—commentary
Ron Insana – CNBC
The volatility in the stock market might be viewed, to quote “MacBeth,” as “full of sound and fury, signifying nothing.”
The market has been quite choppy of late but does that truly signify an increase in volatility?
This is where your measurement tools make a difference.
The realities of executing in today’s high speed markets
Futures & Options World
The electronic execution landscape has undergone a steady transformation. The underlying infrastructure provides essential functionality, but few brokers see it as a means of gaining competitive advantage. Today’s differentiators are found higher up the chain: sophisticated algos, execution consulting capabilities and other innovations. However execution is something that brokers have to get right, and getting it right has become a lot more difficult.
Fed data dependency opens way for greater market volatility
FTSE Global Markets
The new Belvedere column in FTSE Global Markets is the bellwether of shifts in market sentiment, propelled by either shifts in monetary policy or macro market trends. David Shairp, portfolio manager and global strategist in JP Morgan Asset Management’s Global Multi Asset Group sets the tone by looking at the impact of US Federal Reserve policy on interest rates on market sentiment and the inevitable consequences of an election in the United Kingdom which, in his view “appears to be a contest between the unacceptable and the unelectable.”
CME Europe CEO eyes growth one year in
Luke Jeffs – Futures & Options World
CME Europe’s chief executive has said the exchange has made good progress in its first year and is now focused on ramping up volumes in its existing contracts as well as forging ahead with its plan to build a “truly multi-asset derivatives exchange in the region”.
CME Europe launched with FX contracts and biofuels on April 28 2014, marking the US futures giant’s first exchange outside of the US.
ICE launches first Eris-based contracts
Alice Atwood – Futures & Options World
The Intercontinental Exchange has Monday gone live with its first credit default swap future based on the Eris Exchange methodology, the first in a series of planned launches following the firms’ landmark deal last December.
As predicted by FOW, The Intercontinental Exchange (ICE), led by chief executive Jeffrey Sprecher, has Monday launched the Eris CDX futures for North American investment grade and high yield indices.
JPX eyes September for rates cross-margining
Cian Burke – Futures & Options World
The Japan Exchange Group (JPX) has become the first Asian exchange to pledge to launch cross-margining of interest rate products, a service that is established in the US and generating interest in Europe.
The exchange has set September for the launch of cross margining for yen-denominated interest rate products and clearing of foreign denominated interest rate swaps, according to a management plan released on Tuesday.
Australia gets first US, AUD bitcoin exchange
Alice Attwood – Futures & Options World
Bitcoin market, Independent Reserve, has become the first Australian exchange to offer direct trading in the digital currency in both US and Australian dollars.
Users of the company can now issue a single buy or sell order than can be fulfilled directly within the AUD bitcoin pool, said the company.
Regulation & Enforcement
SEC takes different harmony approach
While the CFTC remains embroiled in tense negotiations with European regulators regarding the reach of Dodd-Frank derivatives rules outside the US, the SEC has remained above the fray by taking a starkly different approach to derivatives rulemaking.
The agency has moved considerably slower – it issued its first substantive Dodd-Frank rulemaking in January of this year, compared with the CFTC passing its first rules in 2011.
The Fine Line Between Smart and Illegal
Peter J. Henning – Dealbook – NY Times
Prosecuting fraud begins with identifying a lie that leads the victim to lose something of value. The criminal charges announced last week against Navinder Singh Sarao for “spoofing” orders for futures contracts raises the question whether they are enough to constitute fraud, the key to the government’s effort to extradite him from Britain.
Euclidean cuts deal with Bloomberg for US options
Luke Jeffs – Futures & Options World
Tech start-up Euclidean Trading has cut a deal with Bloomberg where the data vendor is making available to its clients Euclidean’s US interest rate options prices, a new service that aims to tap the growing demand for electronic options trading.
Euclidean, which started life in early 2014, has reached a deal whereby Bloomberg is linking to the Euclidean algorithmic trading service that shows the prices of Eurodollar interest rate options trading on CME Group.
Put-Sell Your Way to Energy Profits — Trefis
Karim Rahemtulla – Trefis
Despite the recent rally in energy shares, it’s continuing to look bleak out there. Most shares in the energy sector are still down 20% to 50% from their highs.
But one of the best things about a bear market is that it provides the opportunity to generate income from high-quality options plays.
Plus, the recent volatility is doing wonders for premiums, money you receive or pay when you engage in an options trade.
SEC-Regulated Options Brokers
Shobhit Seth – Investopedia
Options trading is a high-risk, high-return game involving big money. Options trading is available on leveraged money—a situation can multiply both wins and losses and expose (often ignorant) traders to higher risks. In the United States, the U.S. Securities and Exchange Commission (SEC) safeguards the interest of common options traders. It is important to select a fully authorized options broker that abides by SEC rules and regulations. This article provides a list of SEC-regulated options brokers.