Observations & Insight
The Data Game: UnaVista’s Maryse Gordon Dissects the Data Challenges under Global Regulations
Chief among the post-financial crisis mandates is the building of a robust and standardized system of global data distribution and storage, but the task has proven to be more difficult than expected. Maryse Gordon of UnaVista, London Stock Exchange Group’s trade repository and approved reporting mechanism, outlines the challenges and solutions for data matching, validation reconciliation and reporting across multiple jurisdictions.
Treasuries Volatility Close to 2015 Low With Fed Meeting Looming
Lukanyo Mnyanda and Jennifer Surane – Bloomberg
Treasuries were little changed with volatility close to the lowest this year before the Federal Reserve’s policy decision, with investors already looking forward to whether officials will deliver an interest-rate increase in December.
Why oil’s next big move could take it higher
Stephanie Yang – CNBC
Crude oil settled down almost 2 percent Tuesday, hitting a two-month low around $43 a barrel. However, one trader says the options market indicates that a large move higher may be ahead.
Stacey Gilbert, head of derivative strategy at Susquehanna, said oil trading continues to be a high-volatility environment. And while crude could see more losses, she said, any big move is more likely to come to the upside.
Puppet or muppet? The Yellen Put and the Fed’s market control
James Mackintosh – Financial Times
Janet Yellen is supposed to be the puppet master for the US economy, and is widely thought to pull the strings for the rest of the world too. As chair of the Federal Reserve she is charged with finding consensus among policymakers and so setting US interest rates, the price of money for the world’s most important reserve currency.
Naturally enough, traders hang on her every word, and those of her colleagues on the Federal Open Market Committee. On Wednesday, the statement after a regular FOMC meeting will provide investors with yet more words to analyse for signs of when the first rate rise in nine years might finally happen.
Hertshten wins Lifetime Achievement Award
Luke Jeffs – Futures & Options World
GH Financials founder Gedon Hertshten has been selected as the recipient of the FOW Lifetime Achievement for 2015.
Hertshten created GH Financials in 1993 and has overseen its growth into one of the largest clearing businesses in the industry.
Traders likely to bet on Nifty through options from November
Biswajit Baruah – Economic Times
Come November, small traders may prefer betting on the Nifty through options rather than futures as the cost of trading in equity derivatives is set to more than double. The value of minimum derivative contract size will increase to Rs 5,00,000 from Rs 2,00,000 when the October series expires on Thursday. The NSE has tripled the lot size of Nifty futures to 75 from 25, resulting in margin requirements spiking by about three times.
Morningstar Names Kunal Kapoor President
Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced that Kunal Kapoor, CFA, 40, has been named president of the company, a new position. Kapoor, who previously served as head of global products and client solutions, will add responsibility for sales, marketing, and product development. He will continue to report to Joe Mansueto, chairman and chief executive officer.
Intercontinental Exchange Reports Third Quarter 2015 Results
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, today reported financial results for the third quarter of 2015. For the quarter ended September 30, 2015, consolidated net income attributable to ICE was $306 million on $816 million of consolidated revenues less transaction-based expenses. On a GAAP basis, diluted earnings per share (EPS) in the third quarter were $2.76.
SGX says tech failure caused trading outage
Alice Attwood – Futures & Options World
Singapore Exchange said its derivatives market opened as normal on Wednesday after a technology failure forced the exchange to suspend trading for an hour on Tuesday, as reported by FOW.
SGX said Wednesday the market opened as normal at 0730.
Euronext shareholders back new chief exec Boujnah
Alice Attwood – Futures & Options World
Euronext shareholders have approved the appointment of new chief executive Stéphane Boujnah, paving the way to the former Santander banker assuming the top job at the European exchange next month.
Regulation & Enforcement
Making Insider Trading Legal
Patrick Radden Keefe – The New Yorker
Do you run a hedge fund? If so, I have exciting news. The prominent campaign by Preet Bharara, the United States Attorney in Manhattan, to crack down on insider trading in the three-trillion-dollar hedge-fund industry has just ground to an inglorious halt. Late last week, it was quietly announced that prosecutors would drop all charges against one of Bharara’s highest-profile targets, Michael Steinberg, who worked at the fourteen-billion-dollar hedge fund S.A.C. Capital Advisors.
Spoofing Trial Jury Told Trading Algorithms Guided by Coscia
Brian Louis and Janan Hanna – Bloomberg
A former computer programmer for a high-speed trading firm told jurors he received detailed guidance on developing trading algorithms that prosecutors say led to illegal spoofing by principal Michael Coscia.
Advantage Futures Supports CityTrader
OptionsCity Software, a global provider of futures and options trading and analytics solutions, today announced that Advantage Futures’ clients now have access to CityTrader, OptionsCity’s cloud-based futures trading platform. With CityTrader, Advantage Futures adds a platform with robust pricing and analytics tools that works seamlessly for futures and options on futures trading across a number of different platforms.
CME Group and Real-Time Payment Transfer Platform, Dwolla, Sign Commercial Agreement to Provide Payment Efficiencies to Clearing Members
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it has signed a commercial agreement with Dwolla, a modern bank transfer platform. The commercial arrangement will offer Dwolla’s real-time architecture to facilitate on demand payment capabilities for clearing and settlement, as well as streamline payment operations for CME Clearing members and clients.
Sucden Financial unveils new arbitrage tool on its STARtrading platform
Mike Fox – LeapRate
Sucden Financial announced today it has developed a new advanced trading feature on its in-house developed STARtrading platform. The Dynamic Spreader now allows users to monitor and trade on two exchanges/markets simultaneously, taking advantage of any arbitrage opportunities.
FlexTrade EMS Gets Access to OTAS Apps and Alerts
Buy and sellside traders who use FlexTrade’s order and execution management systems now have access to a new set of trading applications to stream line their workflow and help them cut costs.
Indicator of the Week: It’s the Most Bullish Time of the Year
Rocky White – Schaeffer’s Research
With October coming to a close, it’s a good time to remind you that we are now heading into the most bullish six months of the year. Over the past 50 years, the November-through-April average gain of 6.56% for the S&P 500 Index (SPX) tops all other six-month time frames. Likewise, the May-through-October period, averaging a gain of just 0.83%, is the most bearish six months of the year. Stock performance since May is about what we could have predicted, given the table below. The S&P 500 has declined a little less than 1% since then. Historically, in addition to an average 6.56% gain over the next six months, the index has been positive 76% of the time. Just as the last six months have more or less corresponded with history, hopefully the next six months will, as well.
A Lesson in Correlation
Adam Warner – Schaeffer’s Research
One important thing to remember about the CBOE Volatility Index (VIX) is that all VIXes are not created equal. By that I mean today’s 15 VIX isn’t necessarily the same as yesterday’s 15 VIX.
Will Stock Market Tank in the Final Year of Obama?
Mark Hulbert – Barron’s
If the stock market produces lousy returns over the coming year, it might be the president’s fault.
But don’t blame President Barack Obama. Nor should you attribute weakness in equities to fear of a President Trump, Clinton, Sanders, or Carson. According to the Presidential Election Year Cycle, the market’s potential is equally mediocre regardless of which Republican candidate becomes the nominee — or whom the Democratic party nominates.