Lead Stories

U.S. Stocks Rise After Greece Reaches Agreement With Creditors
Oliver Renick – Bloomberg
U.S. stocks advanced, with equities posting their best three-day rally since March, after Greece reached an agreement with its creditors.
Consumer and technology shares rose the most, with Netflix Inc. and Amazon.com Inc. surging more than 2.3 percent. Microsoft Corp. and Facebook Inc. gained at least 1.9 percent. MarkWest Energy Partners LP jumped 11 percent as the pipeline unit of refiner Marathon Petroleum Corp. plans to buy the second-biggest U.S. processor of natural gas for about $15.8 billion. Marathon rose 9.1 percent to a record.
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Psychological Damage Can Be Done to Investors
Bob Lang – CBOE Options Hub
It is not easy to win over investor sentiment. Anyone who lost money during the financial crisis can tell you how difficult it was to suddenly trust markets again, and there was the ‘flash crash’ afterwards that suddenly jolted any built up confidence. For its part, the Fed has done everything they possibly could to bolster investor confidence<http://explosiveoptions.net/2015/03/all-eyes-on-the-federal-reserve-this-week/>, the lifeblood to the markets. On record they have succeeded, but many would question the tactics. Yet six years into the bull run many are questioning when it will end, how hard a landing will be and whether they can time an exit ‘just right’. That’s not my game, however.
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***DA: It’s a dangerous game being played out. The zero-interest rate policy has diminished the choice set to risky, more risky, or no earnings. Prudent investors and those with shortened time horizons are especially shell-shocked by this market.

July and the VIX weigh heavily on the S&P
Simon Maierhofer – MarketWatch
It looks like a perfect storm: The Greek odyssey, the Chinese stock-market meltdown (Shanghai Composite down 30%-plus since June 5), and suspended trading at the New York Stock Exchange.
And all this is happening during a time of the year that’s typically rough for stocks, even without external catalysts.
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Foreign investors taking large bets on expected rate hike by US Federal Reserve
Ram Sahgal & Rathina Sabhapaty – Economic Times
Foreign investors are taking large bets on a likely market fall in September. They have begun buying significant number of put options based on Nifty in that month on fears of the US Federal Reserve raising interest rates for the first time in nine years. If the market falls in line with their fears, the rise in the value of the put options offsets to some extent the loss in value to their Nifty shares.
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***DA: Emerging fear?

Could We See a VIX Rerun?
Adam Warner – Schaeffer’s Investment Research
As soon as the VIX-mentum washed upon our shores, it vanished. Yes, we can officially close the books on our latest overbought CBOE Volatility Index (VIX). All that’s left to do is add up those returns in “X” months. We are back to DEFCON 1. That is, VIX closed Friday beneath its 10-day simple moving average, which means — alas — we have an update!
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Week Ahead: Street Finds Relief As Greece Can Exhale For Now; Earnings Flow
JJ Kinahan – Forbes
July fireworks continued into a second week and could persist as a plunge—followed by a mild bounce—in Chinese stock shares, plus more bailout drama from Greece, sparked head-jerking moves in U.S. stock averages.
It was another intense weekend of all-nighters for Greece’s officials and its would-be saviors. Greek Prime Minister Alexis Tsipras secured the backing of his own parliament for belt-cinching fiscal reforms late last week. And over the weekend, eurozone leaders accepted the pitch. They ultimately made Greece surrender much of its sovereignty to outside supervision. In return they simply agree to talks on an 86 billion euros bailout (Greece’s third rescue) to keep the near-bankrupt country in the single currency, Reuters reported.
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Back From The Brink – Weekly Market Outlook
Price Headley – CBOE Options Hub
Once again, just when it looked like stocks were going to pass the point of no return, good news regarding Greece’s debt day the bulls a reason to celebrate on Friday. It wasn’t enough to bring the market back into the black for the week, but just barely. More important, Friday’s bounce gave investors just enough hope to keep the bullish case alive for some.
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Exchanges

Flash Boys Welcome: World Exchanges Woo High-Frequency Firms
Sam Mamudi, John Detrixhe and Benjamin Bain – Bloomberg
Hey there, flash boy.
Exchanges around the world are avidly wooing high-frequency traders, those controversial speed demons of Wall Street.
Despite the often explosive debate over this kind of trading in the U.S., bourses in Mexico, Turkey, South Africa and beyond are trying to lure HFT types to boost business.
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Is the NYSE relevant anymore?
Jonathon M. Trugman – New York Post
The New York Stock Exchange’s leadership proved the Big Board’s irrelevance Wednesday as it halted trading for nearly four hours and investors didn’t flinch.
Since its inception in 1792, when its headquarters were at the storied Tontine Coffee House at the northwest corner of Wall and Water streets, then in 1865, when it moved to 11 Wall St., it has played a central role in American economic development.
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Thomson Reuters SEF completes certification testing with LCH.Clearnet’s ForexClear
Press Release
Thomson Reuters Swap Execution Facility (SEF) undergoes rigorous certification testing with LCH.Clearnet to meet demanding functional and technical test requirements as a prerequisite to offering comprehensive functionality when providing a connection to clearing for dealer-client FX non-deliverable forwards (NDF) transactions
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Regulation & Enforcement

Regulators Tie High-Speed Trading to Treasury Volatility
Ian Katz – Bloomberg
U.S. officials have concluded that high-frequency trading contributed to the Treasury market’s wild ride last October, a finding that will probably add to regulatory scrutiny of the industry.
While a soon-to-be-published government report won’t point to just one cause, it will cite speed traders as playing a key role, according to a person with direct knowledge of the study. Treasury yields plunged the most in five years on Oct. 15, 2014, before recovering, fueling a months-long debate over whether something has fundamentally changed in a $12.7 trillion market that most investors consider a safe haven.
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Technology

NYSE Insists It Was Not Victim of a Hack, but Questions Remain
Leah McGrath Goodman – Newsweek
Yet the 5-year-old facility struggled this week to take on the burden of the exchange’s trades, valued at more than $150 billion a day, even as volumes choked off during a nearly four-hour-long shutdown that began Wednesday at 11.32 a.m. ET and ended just 50 minutes before the market closed for the day, at 3.10 p.m.The NYSE has since said there were problems with its systems resulting from an overnight “software release,” saying the issue began well before the market opened and grew worse until the exchange halted trading. But many questions remain unanswered. While the market has largely recovered, the NYSE confirmed to Newsweek it is launching an internal investigation into the circumstances surrounding the outage and how to prevent recurrences. The NYSE’s regulator, the Securities and Exchange Commission, also will be conducting a review of its findings.
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Strategy

Here’s How To Seize Opportunity From Market Volatility
Bill Luby – Investing.com
Steve Sears and I have a running joke that whenever I am tapped as a guest columnist for The Striking Price at Barron’s, we should both start buying VIX calls as inevitably something is going to come along and cause a volatility spike just in time to give me something topical to discuss.
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Education

Risks involved in outsourced options
John Jackson – FT Adviser
A feature of the post-RDR landscape has been the greater market share taken by outsourced investment solutions, whether multi-asset funds or platform-based portfolios.
Much of this growth has gone into solutions that take into consideration the risk being taken within a fund or investment portfolio.
In order to achieve a risk rating, the level of risk in the fund or portfolio will have been assessed, usually by one of the risk-profile companies, and formally aligned to their risk-profile tools.
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