JLN Options: Tech Shares at 14-Year High Send Traders Rushing to Hedge; Signs of Complacency in the Volatility Complex; S&P 500 Falls From Record Amid Jackson Hole, Ukraine

Aug 22, 2014

Lead Stories

Tech Shares at 14-Year High Send Traders Rushing to Hedge
Inyoung Hwang – Bloomberg
The Nasdaq 100 Index’s highest level since the 2000 technology bubble has sent options traders rushing to buy protection.
Bearish wagers on the Powershares QQQ Trust (QQQ) cost the most since September 2012 relative to bullish ones, data compiled by Bloomberg show. The Nasdaq 100 reached a 14-year high, buoyed this year by rallies in companies from software maker Microsoft Corp. (MSFT) to social-networking site Facebook Inc. (FB)

Signs of Complacency in the Volatility Complex
Adam Warner – Schaeffer’s Investment Research
The CBOE Volatility Index (VIX) keeps drifting lower. And for a change, investors seem to want to play along. Interest in the VelocityShares Daily Inverse VIX Short-Term ETN (XIV) is increasing, as per Bloomberg.

S&P 500 Falls From Record Amid Jackson Hole, Ukraine
Elena Popina and Lu Wang – BloombergBusinessweek
The Standard & Poor’s 500 Index fell after reaching an all-time high as investors weighed comments from central bank leaders for clues to monetary policy amid rising geopolitical tension.
The S&P 500 fell 0.2 percent to 1,988.40 at 4 p.m. in New York. The benchmark gauge ended the week with a 1.7 percent gain, its biggest advance since April. The Dow Jones Industrial Average lost 38.34 points, or 0.2 percent, to 17,001.15 today. The Nasdaq Composite Index added 0.1 percent to the highest level since 2000. Trading in S&P 500 companies was 22 percent below the 30-day average for this time of the day.

Weekly Market Commentary 8.22.14
Larry McMillan – CBOE Options Hub
The rally that began on August 8th has extended quickly and strongly to take $SPX to new intraday and closing all-time highs.  When it crossed over resistance at 1960, the $SPX chart improved from “bearish” to “neutral.”  If another all-time closing high is registered today, that will officially make the $SPX chart “bullish.”

Next Week in Weeklys 08/25/2014
Russell Rhoads – CBOE Options Hub
There were no new names on the list, but a few stocks with short dated options reporting earnings next week.  Thank goodness for retailers and their funny corporate calendars –

Regulation and Enforcement

Banks push for delay to introduction of derivatives rules
Michelle Price – Reuters
The international banking industry has asked regulators for more time to implement derivatives rules that could add $800 billion to the global financial industry’s cost of doing business, people familiar with the matter said.
The International Swaps and Derivatives Association (ISDA), which represents the over-the-counter derivatives market, has written to the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO), the global regulatory banking and securities bodies, requesting a delay to rules that aim to make trading derivatives safer, the people added.

High-Speed Traders Enlist Chilton to Improve Image in Washington
Former U.S. Commodity Futures Trading Commission member Bart Chilton, an outspoken critic of some high-speed trading practices while at the agency, has been enlisted in a Washington-based effort to improve the image of an industry beset by regulatory and legislative scrutiny.
The Modern Markets Initiative, organized by four firms last year, has hired former Bank of America Corp. and Nasdaq OMX Group (NDAQ) Inc. executive Bill Harts to lead its efforts, the group said in a statement today. Chilton, now a senior adviser at law firm DLA Piper, was hired to advise on regulatory and public policy, according to the statement.

Bank of America’s $16 Billion Mortgage Settlement Less Painful Than It Looks
Peter Eavis and Michael Corkery – NY Times
The Justice Department said on Thursday that it had so far recovered nearly $37 billion from big banks for their role in selling shoddy mortgages before the financial crisis.
Such a large number — intended to deter misdeeds in the future — suggests that Wall Street is being made to pay for its role in stoking the subprime debacle. Yet the financial pain inflicted by the settlements may not be as great in the end.

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