Lead Stories

The Greece Crisis is Not Our Concern, Say US Options Investors
ETF Trends
English speakers have grown to love the German word schadenfreude. But what’s the single word for indifference to the suffering of others? We need to figure this out to describe what’s happening in the US options markets.

***JB: To be the pedant I am I would say the opposite of schadenfreude is taking joy in the pleasure of others (as opposed to indifference). In that case the word would be “mitfreude”. Carry on, don’t mind me…

You Could Fit America’s Greek Stock Holdings in One U.S. Midcap
Sofia Horta E Costa – Bloomberg
While Americans are the biggest foreign owners of Greek stocks, the holdings don’t exactly represent a critical exposure.
According to data from Athens Exchange Group, overseas investors hold 59 percent of the Greek stock market, and of that U.S. traders have about 25 percent. That comes out to $5.7 billion — about the size of doughnut maker Dunkin’ Brands Group Inc., the 110th weighting in the S&P Midcap 400 Index.

Mysterious Seller Who Flash Crashed Gold In 2014 Revealed
Back in late 2013 and early 2014, the gold (and silver) market was stunned by a series of massive, unprecedented “stop” or “velocity logic” sales which sent the price of the precious metal crashing so furiously they halted the entire gold futures market anywhere between 10 and 20 seconds.

Is the U.S. an Island of Calm Amidst a Sea of Greek Fear?
Adam Warner – Schaeffer’s Investment Research
Another Friday, another weekend with worries about Greece. But at least there’s a big summit today and we can finally put this crisis behind us.

Grexit fears may delay US rate hike
Kathleen Gallagher and Philip Scott – FT Adviser
The flare-up of the Greek crisis in the eurozone is leading to a state of uncertainty about when the US central bank is going to finally hike its interest rate, experts have cautioned.
The warnings came after the US Federal Reserve (Fed) last week adopted a more cautious tone towards the global economy, throwing into doubt rising certainty that it would begin raising the rate in September.
The Fed confirmed it would not increase its rates in June for another consecutive month.

The curious case of the euro
Bernard Aw – IG UK
The escalation of Greece’s flirtation with default and Eurozone expulsion was curiously not reflected in the euro. In fact, the EUR/USD ended last week higher against the greenback, which begs the question of what is going on? Is this some market positioning play before trouble hits the fan? The proverbial calm before the storm?

No Progress Since February – Weekly Market Outlook
Price Headley – CBOE Options Hub
The market certainly got off on the right foot last week, rallying all the way through Thursday when the NASDAQ Composite (COMP) finally cleared its all-time record high set back in March of 2000. With no other major market index completing the same feat though — in addition to Friday’s pullback somewhat extinguishing the budding rally — we can say right now that once again stocks are caught between a rock and a hard place.

The Week in Russell 2000 Trading – 6/15 – 6/19
Russell Rhoads – CBOE Options Hub
Small cap stocks dominated last week as the Russell 2000 (RUT) rose 1.55% and even put up an all-time record close on Thursday. Large cap stocks fared OK with the Russell 1000 (RUI) rising 0.66% last week, but unlike the RUT, RUI did not manage to put in a new all-time closing high. We have almost reached the middle of the year and so far RUT is up 6.64% while RUI has risen 3.05%.


ICE Benchmark Administration Announces Two New Direct Participants to the Gold Auction
Press Release – ICE
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, today announced that two new direct participants have been approved by ICE Benchmark Administration (IBA) to participate in the gold auction, which is used to determine the LBMA Gold Price.
The new direct participants are Morgan Stanley and Standard Chartered. It was announced last week that Bank of China has been approved to participate in the gold auction. All three new participants join today.

Euronext sees record trading volumes in CAC40 Mini Futures
Trading in Euronext’s CAC40 Mini Futures achieved record daily and weekly volumes last week with a total of 8427 contracts traded during the week of 15 June. On 18 June a new total daily volume record was reached with 3189 contracts traded.

CBOE Holdings Announces Date Of Second-Quarter 2015 Earnings Release And Conference CBOE Holdings, Inc. (NASDAQ: CBOE) will announce its financial results for the second quarter of 2015 before the market opens on Friday, July 31, 2015. A conference call with remarks by CBOE Holdings, Inc. senior management will begin at 7:30 a.m. Central Time (CT).
A live audio webcast of the conference call, and the presentation that will be referenced during the call, will be available on the Investor Relations section of CBOE’s website at http://ir.cboe.com under Events & Presentations.

Regulation & Enforcement

Market braced for upheaval as SEC signals ETF crackdown
Louie Woodall – Risk.net
Broker-dealers and exchange-traded fund (ETF) providers in the US are bracing themselves for a period of upheaval amid the arrival of a more stringent regulatory reporting regime, which many fear could augur heightened scrutiny of the booming sector.On May 20, the Securities and Exchange Commission (SEC) issued the Investment Company Reporting Modernization proposed rule, which participants say will foist burdensome new disclosure requirements on ETF providers and their authorised participants (APs) – broker-dealers that provide the underlying securities required for creating an ETF in exchange for an equivalent value of ETF shares, known as a creation units, that they then sell in the secondary market.


CME Group must embrace technology as trading pits close – Opinion
Crain’s Chicago Business
Even before Carl Sandburg celebrated the city’s muscular vitality in his 1914 poem “Chicago”—”Hog butcher for the world, tool maker, stacker of wheat”—men traded contracts for future delivery of these commodity goods here, making the city a boisterous financial hub as well. The stockyards and grain towers left Chicago a long time ago. Yet the trading pits that set the prices of pork bellies and bushels of crops have clung to life, albeit in much diminished numbers.


Why are so many traders betting on this hotel giant?
Alex Rosenberg – CNBC
All of the sudden, shares of Hilton have gotten awfully hot among options traders.
“We went from having a 10-day average daily volume of call options of roughly 1,000 contracts to trading 50,000 calls over the last five days,” said Stacey Gilbert, head of derivative strategy with Susquehanna.

Covered call strategy can work well
Rajiv Nagpal – mydigitalfc.com
After two weeks, it was the first full week when tangible and decent tradable upmove was witnessed in the Nifty. All those traders who were selling out of money call options as if there was nothing left in the Indian market were caught on the wrong foot.
While short covering in Nifty futures was responsible for first leg of the upmove, some delivery-based buying also seems to have emerged in the latter part of last week. This increases the probability of the Nifty witnessing a consolidation move over the next few sessions.


Foreign exchange hedging – the case for options
Wayne Andrews – Zawya
There has never been more attention paid to the adverse effects of exchange rate fluctuations than we see today – yet so many firms, year after year, continue to report the negative impact of what are often referred to as ‘currency headwinds’ on their annual results.

Ups and downs: Advisors help clients face volatility fears
Andrew Osterland – CNBC
Investors might as well get used to the market volatility.
Whether you’re looking at stocks, bonds or commodities, asset prices have been swinging a lot more wildly this year. The VIX, a measure of the stock market’s implied volatility based on option prices on the Chicago Board Options Exchange, has fallen from above 20 in January to the mid-teens, but bigger price moves across asset markets are rattling investors and challenging financial advisors to keep their clients committed to investing strategies.

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