Lead Stories

Low VIX May Mask Stock Risks
Steven M. Sears – Barron’s
The stock market, as everyone should know, is a discounting mechanism. Today’s prices reflect tomorrow’s realities. That elemental fact seems forgotten by many people.
Rather than asking what is priced into current quotes, investors instead seem broadly enthralled by reams of smart-sounding data that often lead nowhere. Perhaps the data offer comfort at a time when quantitative investing is the rage. Perhaps all the “data bytes”—a play on sound bytes—create a sense of security in an otherwise chaotic market.
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***SR: Try saying that headline ten times fast.

OCC Names Former BNY Mellon Executive David Ridgway as Senior Vice President, Enterprise Risk Management
Press Release – OCC
OCC, the world’s largest equity derivatives clearing organization, today announced the appointment of David Ridgway, a former senior risk management executive with BNY Mellon, as Senior Vice President, Enterprise Risk Management. Ridgway reports to John Fennell, Executive Vice President and Chief Risk Officer.
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****SD: No direct CME connection that I know of.

There’s a Big Reason Volatility Might Be Coming Back
Alex Harris – Bloomberg
Even with the bond market’s muted response to the Federal Reserve’s plan to begin winding down its almost $4.3 trillion portfolio of mortgage and Treasury securities, there are plenty of reasons why the calm probably won’t last.
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French Election Risk Reawakens as Bonds Drop, Volatility Jumps
Stefania Spezzati – Bloomberg
French election risk is slowly creeping back into markets. The nation’s bonds fell on Monday, widening the yield spread over Germany to the highest since February. Meanwhile the CAC 40 index of stocks dropped and a gauge of two-week euro volatility that now covers the first round of voting, surged.
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U.S. Stocks Resilient in Week of Surprises as VIX Stays Quiet
Oliver Renick – Bloomberg
A week marked by surprises, from a U.S. missile strike in Syria to a jobs report that was the weakest in almost a year, did little to rattle U.S. equities sitting near record levels.
Against a backdrop of rising geopolitical tensions and uncertainty over the Donald Trump administration’s approach to financial regulation, volatility remained muted in the stock market. The VIX tallied its 103rd session below 15, the longest streak since February 2007, according to Bloomberg data.
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Can Trump Really Take Credit For This Recent Rally?
Bob Lang – CBOE Options Hub
We all are aware of the stock market at/near all time highs, a stunning run post-election. President Donald Trump has taken some (most?) of the credit for a surge in stock prices, but is it all due to his election? We can certainly say sentiment has improved since the election results were rendered, but there were other things happening that also deserve credit for that strong move upward in the stock market.
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Traders’ Bets On Index Options Reflect Expectations Of Near-Term Weakness
Agam Vakil – Bloomberg
Traders bought index put options on Friday, indicating caution as major Indian equity indices retreated to wipe out gains made through the week. Foreign investors added short positions in index futures, further reflecting change in sentiment.
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Exchanges and Clearing

CME CEO Duffy: Syria Strike a Shot Across the Bow for Investors
Julia Limitone – Fox Business
Terrence Duffy, the CEO of the world’s largest futures market operator, the CME Group, said the markets see President Trump’s Syria strike as a warning sign. “This is a shot over the bow as they call it in the business, I guess, and now we are going to have to take a wait and see attitude like everybody is saying and that’s what the markets are doing,” Duffy told the FOX Business Network’s Maria Bartiromo.
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NSE cuts fee on options and currency derivatives
Dalal Street Investment Journal
The leading stock exchange NSE has significantly lowered transaction charges in equity options and currency derivatives. The reduction in trading transaction charges will increase turnover in the capital markets. As per the new norms, the trading members will have to pay a flat Rs 2500 transaction fee for a month on a billable monthly turnover or premium value of upto Rs 3 crore in equity options. Furthermore, the Exchange has introduced a slab-based structure for turnover above Rs 3 crore. NSE has levied a transaction fee of Rs 5000 on billable turnover of upto Rs 1 crore in equity options and has given incentives for trades over Rs 1 crore.
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New Zealand stock exchange appoints Mark Peterson as CEO
Reuters
New Zealand’s stock exchange NZX Limited has appointed Mark Peterson as its permanent chief executive, it said on Monday.
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Regulation & Enforcement

European regulators offer Brexit sweeteners to investment banks
Huw Jones, Rachel Armstrong and Jesús Aguado – Reuters
A gap in EU financial rules is allowing member countries to compete to host the trading operations of London-based investment banks after Brexit by offering looser regulatory standards.
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SEC Targets Fake Stock News on Financial Websites
Fox Business
The U.S. Securities and Exchange Commission on Monday announced a crackdown against alleged stock promotion schemes in which writers were secretly paid to post hundreds of bullish articles about public companies on financial websites.
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Nadex Bans Husband and Wife Over Money Pass Scheme
Aziz Abdel-Qader – Finance Magnates
A husband and wife have been banned for life from Nadex, the North American Derivatives Exchange, for operating a money-pass scheme to improperly transfer funds, according to a disciplinary notice issued on Friday.
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Nadex seeks authority to limit trading privileges to minimize risk for market and members
Maria Nikolova – Finance Feeds
North American Derivatives Exchange, Inc. (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has filed a notice with the United States Commodity Futures Trading Commission (CFTC), seeking to tighten the rules for the measures it may take against market participants in order to protect itself, its Members and the market.
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SEBI may allow institutional investors in commodity derivatives market
Financial Express
Investors, exchanges and other market participants have been demanding options trading in commodity derivatives for a long time as well as allowing institutional players like banks in such markets.
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Strategy

The S&P 500 still has another 15% pop left this year — here’s why
Barbara Kollmeyer – MarketWatch
The stock rally’s not done yet, and there’s another 15% pop ahead, according to strategists at one big bank. That would be good news for those who saw April — a historically good month for stocks — get off to a lackluster start, not helped by downbeat jobs data and geopolitical headlines.
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Syria Strikes, China Meeting Push Investors to Safe Havens
Vikram Rangala – Nadex Binary Options
Friday was a day of headlines about international conflict and politics. Besides the focus on Syria, China, and Russia, there was an attack in Stockholm, Sweden, by a lone truck driver, who drove through a crowded shopping street, killing at least two people in a suspected terror attack. That attack, similar to attacks in Berlin and Nice, came amid a lot of other news. The markets responded to the uncertainty and activity with alternating selloffs and recoveries.
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Worst Performing ETFs So Far This Year
Drew Voros – Nasdaq
Last week we took a look at the best-performing ETFs of the year, and this week we looked at worst performers. There weren’t too many exchange-traded funds with big declines during the first quarter, but there were enough to make an interesting list.
Just as inverse VIX products delivered far and away the best returns in the period, long VIX products delivered the poorest returns.
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