Observations & Insight

MarketsWiki Clicker Turns 70,000,000
JLN Staff

Last night, while most of us here in the U.S. were asleep, we reached the 70 million mark for page views on MarketsWiki.

Launched in 2008, MarketsWiki was designed to be a knowledge-base for the industry – a resource about people, exchanges, terms and companies that used to exist on the floors of the exchanges around the globe. Now, our industry is much larger and the floors are history almost everywhere. Marketswiki now has more than 21,000 pages of content, built largely by the John Lothian News team, one page at a time. And it has been supported by the industry, with key sponsors who believe in what we’re doing, the value of this knowledge-base for the industry and those outside it.

We average about 1 million page views per month on MarketsWiki and have had visitors from 209 different countries, a true reflection of the growth and geographic scope of our markets.
We certainly appreciate the support for MarketsWiki these past 7-plus years. And we will continue to build this knowledge-base one page at a time.

Lead Stories

Unintended Consequences of the Leverage Ratio
We write to you to express our grave concern regarding a number of unintended consequences of the Leverage Ratio using the Current Exposure Method (CEM). Unless the SA-CCR method is allowed as a replacement for CEM in the leverage calculation for exchange-traded derivative (ETD) exposures, the application of the Leverage Ratio will result in vastly increased capital requirements for General Clearing Members (GCMs) as well as their underlying clients, which will fundamentally threaten these business models to the detriment of the liquidity and stability of European and global markets.

What the Former Employees of the Chicago Mercantile Exchange Should Do Next
Paige Wiser – Michigan Avenue
In July, the Chicago Board of Trade closed most of its futures trading pits. That’s right—the oldest futures and options exchange in the world went dark, leaving many occupationally homeless.
Sure, there’s still electronic trading, but the thrill is gone. The roar of the capitalists! The frantic hand signals! The overpowering odor of testosterone! Women may have elbowed their way onto the floor, but the CBOT has always been a “center of Neanderthalism,” as one female trader recently told USA Today. Surely she meant “center of unparalleled masculinity”—there was nowhere else outside a boxing ring where a man could so definitively prove himself as the alpha dog, mixed metaphors be damned.

Exchanges band together to seek softer bank capital rules
Joe Rennison – Financial Times
A group that includes some of the world’s largest exchanges has written to the head of a leading international regulator in an attempt to soften bank capital rules that they claim could destabilise exchange traded derivatives markets.

4 Charts to Show the Blahs Are Back
Adam Warner – Schaeffer’s Investment Research
Time to party like it’s… a few months ago! Either that or it’s time to take another gander at a few charts and random data points we’ve monitored a bit since the August-September volatility extravaganza.

Volatility Update: 40% Plunge For VIX = Market Vulnerability?
Seeking Alpha
The S&P 500 (SPX) staged a nearly 7% rally in the first three weeks of October – action that crushed several measures of stock and commodities market volatility.
The bullish underlying tone stands in stark contrast to the extreme negativity seen just one month earlier – an atmosphere set off by China’s repeated growth warnings. And it sets up an interesting backdrop heading into the final two months of 2015, a period that has historically been stock friendly.


China Europe to launch on November 18
Alice Attwood – Futures & Options World
China International Exchange (CEINEX), a new exchange backed by Deutsche Boerse and two Chinese exchanges, has set a launch date of November 18, marking a milestone in closer trading ties between Europe and China.
The new exchange is a joint venture between Deutsche Boerse, the Shanghai Stock Exchange (SSE) and the China Financial Futures Exchange (CFFX), and has the remit of supporting the internationalisation of the Chinese currency.

CME Group Profit Soars on Volume, Data Growth
Lisa Beilfuss – WSJ
CME Group Inc., the world’s biggest futures-market operator, said profit soared in its third quarter, lifted by higher trading volume and growth in the company’s market data and information services business.

NYSE Appoints Doug Yones Head of Exchange-Traded Products; NYSE Leading in ETF 2015 Listings
The New York Stock Exchange, part of the Intercontinental Exchange (NYSE: ICE) global network of exchanges, announced today it has named Doug Yones Head of Exchange-Traded Products. Yones will join the NYSE on Nov. 3 from Vanguard where he has worked for 17 years, most recently as head of domestic equity indexing and ETF product management.

CME Group Inc. Reports Strong Third-Quarter 2015 Financial Results
Press Release
CME Group Inc. (NASDAQ: CME) today reported revenues of $850 million and operating income of $516 million for the third quarter of 2015. Net income was $360 million and diluted earnings per share were $1.06. Excluding the items noted in the reconciliation, adjusted net income would have been $344 million and adjusted diluted earnings per share would have been $1.021.

How Deutsche Bank Lost Money as VW’s Scandal Shook Auto Stocks
Euronext today announced that it has received approval from the Hong Kong Securities and Futures Commission (“HKSFC”) to provide automated trading services (ATS) to clients domiciled in Hong Kong, thus facilitating direct membership and access to Euronext’s Paris derivatives markets.

CBOE Holdings Declares Fourth-Quarter 2015 Dividend
Press Release – CBOE
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that its Board of Directors has declared a quarterly cash dividend of $0.23 per share of common stock payable on December 18, 2015, to the unrestricted common stockholders of record on December 4, 2015.

Intercontinental Exchange Declares Quarterly Dividend of $0.75 Per Share
Press Release – ICE
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, announced today a $0.75 per share dividend for the fourth quarter of 2015. The dividend is payable on December 31, 2015 to shareholders of record as of December 16, 2015. The ex-dividend date is December 14, 2015.


No Compromise: The Next-Gen TT Platform
Trading Technologies
Few things are transforming software, business, and nearly every aspect of our lives like cloud computing and software-as-a-service (SaaS). It’s easier than ever to build and deploy new applications, and the result is a plethora of new companies vying for our attention across nearly every domain. The cloud revolutionizes data collection and analysis and empowers SaaS, making it simple to distribute software to anyone, at any time, in nearly any location.

Thomson Reuters To Provide Reference Data To SmartStream’s Reference Data Utility, SPReD
Press Release
Thomson Reuters today announced that it will now deliver reference data to SmartStream’s Reference Data Utility, known as Securities Product Reference Data (SPReD). As part of the agreement, SmartStream will have access to Thomson Reuters PermID, the machine-readable identifier developed to create a unique reference for any data item. SPReD will provide services for instrument reference data normalization and validation across all asset classes to many of the industry’s leading banks.


Options Update: How to Play SPX (VIDEO)
Cardinal Capital Management’s Pat Kernan discusses his options strategy for SPX with Julie Hyman on “Bloomberg Markets.”

McDonald’s Rally Can Continue, Says Goldman
Steven M. Sears – Barron’s
A call options trade ahead of an upcoming investor meeting should serve up a juicy profit.

Strategy: 2 Ways To Manage Portfolio Risks With Options
CBOE Options H
In uncertain markets, every investor is fearful about possible losses in a stock portfolio. But other than getting out altogether, what can you do to eliminate that ever-present risk?


The Low Volatility Anomaly
Tom Firth
Academic finance has long had a soft spot for volatility. Easily measurable and well understood, it came to be accepted as the de facto definition of risk and is now an integral part of modern security valuation – so much so that the terms risk and volatility are used almost interchangeably. Great returns, we were told, are always accompanied by greater risk…but is this really the case? Or can low volatility stocks offer us something for nothing?


2015 CBOE RMC Asia Schedule
CBOE Options Hub
Everyone at CBOE is looking forward to the first Asian version of the popular Risk Management Conference to be held November 30 to December 1 in Hong Kong. Just today the preliminary schedule was just posted at www.cboermcasia.com,

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