Lead Stories

MIAX Options Fast Out of the Gate
Peter Chapman, Traders Magazine
The MIAX Options Exchange, the industry’s newest, is off to a strong start.
The exchange trades only one options class—Cliffs Natural Resources—but has garnered between 3 percent and 6 percent of the volume in the name on the five days since it launched.
http://jlne.ws/TWh1Ws

So much uncertainty, so little volatility
Mike Dolan, Reuters
Equating economic uncertainty with financial market volatility this year would have been a dangerous game.
Perhaps the biggest theme of 2012 for many asset managers was how waves of monetary policy easing from the world’s big central banks smothered market volatility – even as everyone frets about slowing growth and earnings, recession and inflation threats, and ongoing sovereign debt and banking nightmares.
http://jlne.ws/TWgKTy

S.E.C. Says Asset Firm Manipulated Trades to Enrich Some Clients
Peter Lattman, Dealbook
Just a few years ago, sitting in his 19th-floor office with panoramic views of the Pacific Ocean, 3,000 miles from Wall Street, Peter J. Eichler Jr., had reached the top of the money management world…
But the government says that since 2009, Mr. Eichler favored certain clients while shortchanging others. Mr. Eichler executed options trades — speculative, leveraged bets on stocks that magnify profits and losses — but waited about an hour to allocate them.
http://jlne.ws/TWgRP5
**He had private jets and everything.  — SR

What’s Ahead for Bill Brodsky
Steven M. Sears, Barron’s
The Chicago Board Options Exchange, which over the years has surmounted many obstacles that threatened its existence, now faces its biggest challenge yet: William J. Brodsky’s retirement.
http://jlne.ws/TWgWlJ

Some investors rethinking stakes in hedge funds
Beth Healy, The Boston Globe
Is the hedge fund, as we know it, dead? Fifteen years ago, they were the hottest investments around. Every pension fund, endowment, and foundation clamored to get into this elite club, willing to pay hefty fees for the prospect of outsized returns.
But much has changed since the financial crisis. Except for the top hedge funds, most have shown disappointing performance since 2008, not even beating stock index returns.
http://jlne.ws/TWh6JP

Are Swap Futures the Future?
Vincent Ryan, CFO
Hedging interest-rate risk used to be pretty simple: a company would issue debt and simultaneously enter into a custom-fit, over-the-counter interest-rate swap with a financial institution. But the Dodd-Frank Act put an end to that simplicity.
http://jlne.ws/TWhcRH

Percentile of Put vs Call Skew Spread for S&P 500 Companies
Wendy Soong, BloombergBusinessweek
The following table shows the percentile rank over the past year for the 90%-110% skew spread, a measure of how expensive puts, or bearish bets, are relative to calls.
http://jlne.ws/TWjFf1

Exchanges

CME Group Holiday Calendar
Press Release
CME Group observes U.S. recognized holidays. On CME Group recognized holidays, open outcry trading and CME Globex trading observe different opening and closing times, depending on markets traded. Opening and closing times are also affected on the business days prior to or after a holiday in both open outcry and CME Globex Trading.
http://jlne.ws/TWk80P

Regulation

Clearers and exchanges face reform limits
Michelle Price, Financial News
As providers of a neutral, transparent and safe trading infrastructure, exchanges and clearing houses have long been regarded as the rhetorical and commercial winners of the G20 programme to overhaul the financial markets.
Since 2009, analysts have expected these institutions to be buoyed by a regulatory-enforced move to clear over-the-counter derivatives and a directly related boom in listed derivatives trading.
http://jlne.ws/TWiRXq

SEC Ruling: Active ETFs Now Allowed To Use Derivatives
Daniela Pylypczak, ETFdb
But after over two years of analysis and review, the SEC finally made its decision last week: fund companies are now able to seek regulatory permission to include derivatives in actively-managed ETFs. There are, however, explicit stipulations that fund managers must adhere to…
http://jlne.ws/TWhtEh

ISDA Publishes the Recommendation for FpML version 5.4
Press Release
The International Swaps and Derivatives Association, Inc. (ISDA) today announced the publication of the Recommendation for FpML version 5.4.
FpML version 5.4 focuses on further enhancing a robust framework for global regulatory reporting. In addition, the coverage for several asset classes has been expanded to fully represent Dodd-Frank reporting requirements.
http://jlne.ws/Wj0yhp

Strategy

The art of creating a corporate energy hedging programme
Jay Maroo, Risk.net
Risk managers and consultants say hedging corporate exposures to energy prices is more art than science. As a result, the development of a truly successful hedging programme requires several important questions to be carefully considered.
http://jlne.ws/TWhZ52

What Mid-December Means for Options Buyers
Adam Warner, Schaeffer’s Research
It’s mid-December, which can only mean one thing when it comes to options. Walk, don’t run, if you have a mind to buy some. Calendar time moves significantly faster than active market time. Long champagne and short stock-specific news is generally the rule.
http://jlne.ws/Ycygcg

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