‘Swaptions’ trade leaps over regulatory hurdles
By Tracy Alloway and Michael Mackenzie in New York, The Financial Times
An obscure pocket of the derivatives world has managed to escape the effects of new regulation to explode in popularity and size.
Trading of options on indices comprised of credit default swaps has increased dramatically partly because – unlike credit default swaps themselves – the instruments are not required to be centrally cleared under new rules aimed at preventing a rerun of the financial crisis, according to traders.
VIX Futures: Traders And Speculator Raise Bearish Bets
Zachary Storella, Investing.com
VIX Futures Contracts: Large traders and speculators raised their bearish bets in the VIX futures market last week after two weeks of declining short positions, according to the latest data from the Commodity Futures Trading Commission (CFTC) released on Friday.
Two Husbands Accused of Trading on Wives Overheard Talk
By Karen Gullo, Bloomberg
Two California husbands who allegedly heard their executive wives discussing nonpublic information on the phone were sued for insider trading by the U.S. Securities and Exchange Commission.
Ching Hwa Chen, 61, of San Jose, California, overheard his wife, Informatica Corp.’s senior tax director, discussing the company’s quarterly results in June 2012 and gleaned that it might miss its forecasts, the SEC said in a complaint filed today in federal court. Chen bought options and sold the company’s shares short, making $138,000 when they dropped, the SEC said.
Investing Insights: The Monthly Jobs Report And The ‘VIXen’ Come Into Play
JJ Kinahan, Forbes
April 1. Watch yourself—it would be foolish to ignore the volatility as money continues to be reallocated, so far from biotech and other popular momentum stocks, to start Q2.
As temperatures rise, concerns about the impact of this winter’s cold weather should melt. With that in mind, investors will scrutinize Friday’s jobs data for a sense of economic momentum for the remainder of 2014.
Equities advance, pushing VIX lower
Chris McKhann, OptionMonster
Equity indexes closed higher on Friday but once again pulled back from their highs of the session.
The S&P 500 gained 8.58 points to close at 1857.62. It pushed above 1866 in the morning, but then slid lower. It continues to have resistance at 1880 and support at 1840.
VIX ETFs decline despite crazed week in equity markets
Wall Street Sector Selector
The VIX Index and VIX ETFs declined last week despite crazed equity market results. The VIX Index lost 3.93% to close at 14.41, the iPath S&P 500 VIX Short Term Futures ETN (NYSEARCA:VXX) lost 1.65%, and the VelocityShares Daily Inverse VIX ETN (NYSEARCA:XIV) rose 1.52%.
Euronext Hires 3 to Head Derivatives, Commodities, Cash
By Jonathan Morgan, Bloomberg
Euronext NV, the exchange operator preparing to be spun off after its acquisition by IntercontinentalExchange Group Inc., has made three new appointments to lead its derivatives, commodities and cash-equities businesses.
Adam Rose will head the financial-derivatives unit, joining the exchange from ABN Amro Bank NV, according to a Euronext statement. Olivier Raevel, who traded commodities at Societe Generale SA and energy derivatives at Koch Supply & Trading LP, will lead Euronext’s commodities division. Danielle Ballardie will become head of cash equities after spending three years as director of electronic distribution at Barclays Capital for Europe, the Middle East and Africa.
Regulation and Enforcement
Clearing Corp. CEO: ‘We weren’t . . . wrong’
By Lynne Marek, Crain’s Chicago Business
For 32 years, Michael Cahill built his career at low-profile Options Clearing Corp. And then, just before he became CEO in January, the Securities and Exchange Commission blasted the Chicago company for “systemic weaknesses.”
Not only is Mr. Cahill untroubled by the criticism, he doesn’t see much need for change.
CQG and The Technancial Company Ltd Cooperate on Real-Time Risk Management
The Technancial Company Ltd. (TTC) and CQG, Inc. have agreed to integrate TTC’s JANUS Risk Manager, a real-time, pre-trade, and post-order risk monitoring system with CQG’s market data and trading infrastructure via FIX/FAST APIs.
TTC will connect JANUS Risk Manager to CQG’s market data, instrument master, FIX drop copy service, as well as order routing interfaces.
Fed Not Needed for Citi’s (Secret) Dividend
By STEVEN M. SEARS – Barron’s
Citigroup needs the Fed’s permission to boost its dividend. However, investors can increase Citigroup’s (ticker: C) measly four-cent annual dividend with two simple options trading strategies. By selling calls or puts slightly above and below Citigroup’s stock price
Volatility’s Slow Train to Nowhere
Another week, another crawl to nowhere.
We’ve just about completed the first quarter of 2014, and the numbers are staggering … if you consider “inaction” as staggering. The SPDR S&P 500 ETF Trust (SPY) huffed and puffed and lifted just about every pre-open and declined just about every day and closed the week down 0.71 point on the week, about 0.4%. But hey, at least they outperformed small-caps!
Honestly, the week felt worse than that, even factoring in Friday’s modest rally. The CBOE Volatility Index (VIX) actually dropped on the week, despite the fluctuations and the overall decline. It ended last week at 15, and ended this past week at 14.41.