JLN Options: Mini Derivative Contracts Ban Stumps Markets

Nov 21, 2012

Lead Stories

Mini derivative contracts ban stumps markets
Business Standard
The move by the Securities and Exchange Board of India ( Sebi ) to ban mini equity derivative contracts has stumped exchange officials and brokers, who say they have been deprived of a potential winner. By discontinuing the product, the regulator, while denying small traders an opportunity to bet on the key indices, Nifty and Sensex, at a cheaper cost, has also increased the risk of their participation in the regular futures contracts, says analysts.
http://jlne.ws/RUhlpK

VIX Could Be in a Multi-Year Low Period: Detrick (video)
Yahoo Finance
Based on the moribund price action in the CBOE Volatility Index (^VIX) someone forgot to tell options traders to be “afraid” during the most recent pullback. Despite a 5% drop in stocks since the announcement of QE3 the VIX never exceeded 20. Compared to moves over 25 earlier this year and over 45 in summer of 2011 it seems like traders are positively catatonic.
http://jlne.ws/RUnl1R

OPTIONS ON FUTURES

Wrong sort of volatility hits trend followers
The Financial Times
In the days of British Rail, in the depths of winter, there was a particularly notorious excuse for tardy trains: the wrong type of snow on the lines.So it is too with some of the world’s biggest hedge funds. The snow, in their case, is volatility.
http://jlne.ws/RUhPfw

Strategy

Profit From the Fiscal Cliff
By STEVEN M. SEARS, Barrons
Banks are feverishly holding conference calls to discuss the much ballyhooed fiscal cliff — and for good reason.Fear is widespread that Congress will not be able to reach an agreement by Dec. 31 and proceed with spending cuts and higher taxes that will send the economy and stock market into the abyss.
http://jlne.ws/RUnH8w

Finding Value in HP Rubble
By STEVEN M. SEARS, Barrons
Hewlett-Packard proves the old saw that the stock market hurts the most people most of the time. Hordes of investors bought the stock in the past year in anticipation that Meg Whitman would work some magic as she did at eBay (ticker: EBAY). Now, those investors own a wrecked stock.
 http://jlne.ws/RUnPoE

How To Profit From Gold’s Trading Range
Seeking Alpha
SPDR Gold Shares (GLD) seeks to replicate the performance, net of expenses, of the price of gold bullion. Gold has been trading in a tight range over the last few weeks, and until we get a clear catalyst to push it higher or lower, I believe gold can stay in this range for the next few weeks.
http://jlne.ws/RUlnOM

Events

CBOE Holdings To Present At KBW Securities Brokerage & Market Structure Conference
Press Release
CBOE Holdings, Inc. (NASDAQ: CBOE) today announced that Alan Dean, Executive Vice President and Chief Financial Officer, and Edward Provost, Executive Vice President and Chief Business Development Officer, will present at the KBW Securities Brokerage & Market Structure Conference in New York City on Thursday, November 29, at 8:00 a.m. Eastern Time.
http://jlne.ws/RUgWUl

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