Options Traders Join Bank Bulls as ETFs Add Most Money Since ’08
Lu Wang – Bloomberg
While expectations for higher interest rates are hanging over the U.S. market, bank stocks reflect little of the anxiety and options traders see no end to the gains.
They’re snapping up bullish contracts on the biggest financial exchange-traded fund as investors pile into bank shares at the fastest rate since 2008. The ratio of calls to puts on the ETF is near the highest level since 2012 and the cost of hedging against losses has fallen to an 11-month low, according to data compiled by Bloomberg.
All-time Record Daily Closing Highs [Yesterday] for BXY, BXM, PUT, BXR, BXN and LOVOL Indexes
Six CBOE strategy benchmark indexes all hit all-time record daily closing highs today (June 22)
1559.33 BXY – CBOE S&P 500 2% OTM BuyWrite
1527.39 PUT – CBOE S&P 500 PutWrite Index
1140.06 BXM – CBOE S&P 500 BuyWrite Index
459.22 BXN – CBOE Nasdaq BuyWrite Index
218.42 BXR – CBOE Russell 2000 BuyWrite Index
185.16 LOVOL- CBOE Low Volatility Index
All six of these benchmark indexes engage in the systematic selling of index options to collect options premium on a regular basis.
The Loneliness of the Short-Seller
Alexandra Stevenson – NY Times
For some, they are the scourge of Wall Street. Yet short-sellers — investors who stake bets against stocks — are often the first to sound the alarm on a market’s froth or a company’s fraud.
Now, six years into a bull market run, with stocks in the United States smashing one record after another, these naysayers have all but lost their voice.
Big Days Dying Off in Stocks With No 2% Move Since December
Callie Bost and Joseph Ciolli – Bloomberg
Days of frantic buying or selling have been absent from the U.S. stock market this year.
The Standard & Poor’s 500 Index hasn’t posted a gain or loss of 2 percent or more for 126 days, the longest streak since one ending in February 2007, according to data compiled by Bloomberg and Deutsche Bank AG. The last time the gauge went without a 2 percent move in the first half of the year was in 2005.
Fear and Greed Collide in the Stock Market
John Kimelman – Barron’s
I have always felt that sentiment indicators of the broader market are of limited value to investors trying to determine whether to buy or sell.
That’s because in their totality, these indicators are usually a hodge-podge of contradictory information. Look no further than this market.
Hedge Funds for Masses Lose Shine as Goldman, Pimco See Outflows
Charles Stein – Bloomberg
One of the hottest areas for U.S. money managers is quickly cooling off.
Flows into hedge fund-like mutual funds, a category that attracted almost a third of the money going into actively managed funds in the past six years, have slowed this year to the weakest pace since 2008. The strategies, which include non-traditional bond funds and alternative stock funds, attracted just $1.2 billion from investors in the first five months of 2015, according to Chicago-based Morningstar Inc., down from $39 billion last year and a record $96 billion in 2013.
No ‘Bad Blood’ Here: The Force Even Greater than Apple Inc. (AAPL)
Adam Warner – Schaeffer’s Investment Research
OK, seriously, there’s no way to proxy the implied volatility of Taylor Swift. But fortunately, we do have a way to easily check in on AAPL volatility. And for a company with a news announcement and/or a major product launch every other day, AAPL vol acts quite poorly.
Binary options platforms continue to head to the US as Hello Markets partners with Cantor Exchange
Hot on the heels of the existing three binary options software providers, TechFinancials, SpotOption and TRADOLOGIC which have recently registered as market makers on dedicated binary options venue Cantor Exchange, a further platform company has joined the fold as interest in providing exchange-traded binary options to US customers continue to grow.
Today, independent software vendor Hello Markets announced that it has successfully sealed a partnership deal with Cantor Exchange (Cantor Exchange) as an Independent Software Vendor and trading-platform provider. Cantor Exchange is a Designated Contract Market offering Binary Options which are regulated by the CFTC (Commodity Futures Trading Commission) in the United States.
Regulation & Enforcement
Clearing: more for less?
Thomas Kinder – Futures & Options World
How can central counterparties be best encouraged to mitigate the risks deriving from their growing importance to financial markets?
The wider use of central counterparties (CCPs), particularly for clearing over-the-counter derivatives transactions, is a trend reinforced by the G20 and encouraged by regulators more broadly. The pros and cons of this trend have received numerous media airings. Taking it as a given, therefore, I would like to explore in more detail the consequences of the growing importance of CCPs in the securities landscape. Specifically, I want to address two issues: the risk implications of greater CCP use; and how best to encourage a healthy engagement with these risks by the CCPs themselves.
Galaxy Futures offers high speed access to Orc trading clients in China
Financial Industry & Algorithmic Trading News | Automated Trader
Orc, the provider of electronic trading technology for listed derivatives, has announced a co-operation with Galaxy Futures Co. to provide high performance connectivity to Orc clients for the Chinese markets. Clients of Orc and Galaxy Futures can now trade ETF options on the Shanghai Stock Exchange (SSE) via Galaxy Futures’s membership.