Observations & Insight
MIAX Sees Green
Spencer Doar – JLN
The Spread episode linked to below is already missing big news!
The 15 exchange-strong U.S. equity options market is getting another younger sibling from the same group – MIAX – that brought the market its 15th exchange. Named Emerald (see what they’re doing here?), the exchange is scheduled to open in Q1 2019 and will “fill a market structure niche not currently offered by the MIAX Exchange Group.”
This is yet another step in MIAX’s ever-increasing presence in the options space. According to the monthly Options Liquidity Matrix (link in the newsletter), MIAX’s two current exchanges accounted for 7.1 percent of industry volume year-to-date, up from 2017’s 5.6 percent. That report in general was quite positive – January, February and March 2018 represent the best volumes in U.S. options history.
But it’s more than just options. MIAX plans, subject to regulatory approval, to launch MIAX Equities at some juncture. After the launch of the equities endeavor, the group then plans to launch the MIAX Futures Exchange. So by the 2020s, if all goes according to plan, the exchange group will be more of a one-stop trading shop.
On top of the Emerald news, Cboe announced it was launching a one-year VIX.
I guess this Friday’s Spread will not be lacking for content…
The Spread – Week of 4/9 to 4/13 and 4/16
Don’t be confused! The plaintiff in the Cboe VIX manipulation suit is named Spencer, but has nothing to do with the host of “The Spread.” That, and more, gets cleared up in this week’s options news recap.
Miami International Holdings to Launch New Options Exchange, MIAX Emerald, in 2019
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX Options and MIAX PEARL options exchanges, today announced that it intends to launch MIAX Emerald as its third fully electronic options exchange in 2019. MIAX Emerald is expected to join the MIAX Exchange Group in Q1 2019, pending SEC approval.
Cboe Global Markets Announces Launch of Cboe One-Year Volatility Index (VIX1Y)
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced the launch of up-to-the-minute market estimates of one-year volatility, the Cboe One-Year Volatility Index (ticker: VIX1Y), calculated by using real-time prices of options in the S&P 500 Index (SPXSM).
US Options Cap Strongest Three-Month Run in History
Hanweck and MIAX – TABB Forum
First-quarter options volumes reached staggering levels, experiencing their strongest three-month run in history, with 1.37 billion contracts cleared in Q1 2018. This represented a 33% increase over Q1 2017. The acceleration of market volatility during the first three months of 2018 helped drive a 25% increase in volume over Q4 2017.
Rosen Law Firm Announces Filing of Manipulation Class Action Lawsuit Against the VIX Exchange CBOE
Rosen Law Firm, a global investor rights law firm, announces the filing of a class action lawsuit on behalf of purchasers who held or traded S&P 500 (“SPX”) option contracts (“SPX Options”), CBOE Volatility Index (“VIX”) option contracts (“VIX Options”), futures based on the VIX (“VIX Futures”), or VIX Exchange Traded Products (“VIX ETPs”) on exchanges run by Cboe Global Markets, Inc. (formerly known as CBOE Holdings, Inc.) and its affiliates (“CBOE”) during the following time periods…
****SD: More joiners
Winning ‘Black Swan’ Investor in 2008 Says Market’s More Fragile
Yakob Peterseil and Cecile Gutscher – Bloomberg
Haworth at 36 South Capital Advisors snaps up cheap options; Late-cycle and high leverage add to risks of market contagion
For funds that thrive on crisis, the volatility jolt that wiped out over $4 trillion of global stock value in February was merely a tremor. A full-blown financial earthquake looms.
Stock Investors Should Embrace the Return of Volatility
Robert Burgess – Bloomberg
Hardly a day went by in 2017 without some pundit bemoaning the lack of volatility in financial markets. They worried about complacency, implying that the Goldilocks-like environment that enveloped markets was a recipe for disaster. With volatility on the rise, you would think the handwringing would diminish. It hasn’t. Now, the pundits are worried the big swings in asset prices of the last few months portend doom.
****SD: Who doesn’t like having cake and eating it, too?
Ongoing aluminium price strength case underlined by bullish traded options
Martin Hayes – Metal Bulletin.com
The aluminium market has got an awful lot going for it as the stand-out metal on the London Metal Exchange, both in terms of price performance, at a six-year high near $2,370 per tonne, and record electronic outright turnovers which have been seen in excess of 30,000 lots daily.
Why Doesn’t VIX Equity Volatility Spill Over to FX?
John Kicklighter – DailyFX
The equity-based VIX exploded through the first quarter as extreme inactivity led to a normalization to the same extreme extent
Key catalysts such as political risks are good for black-and-white readings of risk-reward, but more complicated for FX
Exchanges and Clearing
HKEX Confirms Date For After-Hours Trading Of Equity Index Options And Outlines New Trading Halt Feature For Options Trading In T+1 Session
HKEX’s three most actively traded equity index options (HSI, HSCEI and Mini-HSI options) to be included in derivatives market’s after-hours trading (5:15 pm to 1 am) from 14 May 2018
Osaka targets OTC alternatives, introduces flexible options
Louisa Chender – Global Investor Group (SUBSCRIPTION)
Japan’s Osaka Exchange (OSE) is making a number of changes to existing products and introducing flexible options in an attempt to provide alternatives as the market shifts away from over-the-counter trading.
The OSE, part of the Japan Exchange Group (JPX), is planning to reduce the tick size of the Nikkei 225 options to bring more trading flows to the exchange’s on-screen market.
Dash Financial Technologies Names Trading Industry Veteran Jamie Bogen Managing Director
Dash Financial Technologies, provider of one of the industry’s most advanced multi-asset trading technology and execution services platforms, today announced the appointment of Jamie Bogen as Managing Director, Execution Services. In this role she will be responsible for helping advance the firm’s institutional business development strategy across the buy side and further enhance Dash’s consultancy-led approach to execution customization, workflow and analytics/visualization.
I was a senior trader. Now I’m a programmer. Here’s why
I had a great 25-year run as a Wall Street trader, but I have had to adapt to stay relevant. I have focused on learning to code in C#, C++, Java, R, Python, HTML5, .NET Framework, T-SQL and others in order to appeal to employers in the financial services industry. Now I’m coder instead.
Regulation & Enforcement
Trump to nominate attorney Berkovitz to CFTC -White House
President Donald Trump plans to nominate Dan Berkovitz, a partner at law firm WilmerHale, as commissioner to the Commodity Futures Trading Commission for the rest of a five-year term ending April 13, 2023, the White House said on Monday.
E-TRADE Brings Power of the Desktop to Mobile with LiveAction Market Scanning
E-TRADE FINANCIAL Corporation today announced a significant expansion to its suite of mobile tools. Through the OptionsHouse Mobile iOS app, traders can now access advanced market scanning tools on mobile
Cash-Secured Put Writing Webcast on April 18th
Matt Moran – Cboe
At 1:00 pm C.T. on Wednesday, April 18th, three speakers in a Cboe webcast will discuss Accessing the Volatility Risk Premium with Cash-Secured Put Writing.
In one chart: The VIX says the stock-market low may be in
William Watts – MarketWatch
The Cboe Volatility Index, often referred to as a measure of investor fear levels, is a guide to human nature, says a prominent Wall Street bull. And that guide indicates the lows are in for the stock market and new highs may be no more than months away.
Goldman Sachs Market Making Revenues Spike Higher 164% from Q4
After several major prime brokers have reported earnings late last week, Goldman Sachs is the next heavyweight to break records. The company’s market making operations have registered a 164 percent increase in revenues when compared to last quarter and a 33 percent increase when compared to the first quarter of 2017. The total amounted to $3.2 billion, a multi-year high for the company.
Global Economic Policy Makers Gather Under Trade-War Cloud
Josh Zumbrun, Chuin-Wei Yap and Paul Hannon – WSJ
Economic policy makers gathering in Washington for the spring meetings of the International Monetary Fund and World Bank are sticking to optimistic global growth forecasts in the face of growing risks, first and foremost trade tensions that have unsettled global financial markets.