JLN Options: Mini Options Will Go Live on Monday March 18th

Mar 15, 2013

Lead Stories

Mini Options Will Go Live on Monday March 18th
Bret Kenwell, Benzinga
The debate to allow mini options on the CBOE has been going on for a couple years now. Ever since names like Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), and Amazon (NASDAQ: AMZN) began trading at rather high dollar amounts, there have been parties both for and against the move.

U.S. Stocks Decline After S&P 500 Index Approaches Record
Sarah Pringle, BloombergBusinessweek
U.S. stocks fell, after the Standard & Poor’s 500 Index moved within two points of its record high yesterday, as a report showed consumer confidence unexpectedly fell in March.

JPMorgan Chase & Co. Whale Trades: A Case History of Derivatives
Jacob Wolinsky, ValueWalk
JPMorgan Chase & Co. (NYSE:JPM) was heavily criticized in a 300 page report released this afternoon by the Senate. The Senate stated that JPMorgan ‘gambled’, and compared the bank to a casino. The senate probed JPMorgan Chase & Co. (NYSE:JPM)’s famous London Whale trade. We have some exclusive coverage on the London Whale trade from hedge funds which took the opposite side of the trade (see How Hutchin Hill Took Down JPMorgan for one example).

VIX ETFs Fear The 10 Dows
Wall Street Sector Selector
VIX ETFs completely folded today after the Dow Jones Industrial Average registered its tenth straight day in a row of all time record highs.

Low VIX Values Not Cause for Panic…Yet 
John Jagerson and Wade Hansen, InvestorPlace
How low can you go? This is a question that a lot of traders ask when the CBOE Volatility Index (CBOE:VIX), or the fear index, hits new lows again and again. This week the VIX hit 11.50, which hasn’t happened since 2007. That is pretty low and it indicates that fear of a large correction to the downside is proportionally low.

The Changing Risk Profile Of High-Yield ETFs (HYG, JNK)
Jeff Uscher, ETF Daily News
The U.S. Federal Reserve’s quantitative easing (QE) and zero-interest-rate policies have had investors scrambling for yield for the past several years.
That’s sparked a big rally in high-yield junk bonds, including a flood of assets into high-yield exchange-traded funds (ETFs) from institutional and retail investors unhappy with the low yields found in investment-grade and government debt.

Judge Demands Contract-Attorney Records In Madoff Fund Fee Fight
Daniel Fisher, Forbes
A federal judge in Manhattan this morning is scheduled to pry into the arrangements plaintiff lawyers have with contract attorneys who perform much of the grunt work in securities class-action cases but are paid a tiny fraction of court-awarded fees….
Ivy, a unit of NBY Mellon, allegedly placed pension funds in Madoff’s Ponzi scheme without telling trustees essential facts including there wasn’t enough options volume on U.S. exchanges to support Madoff’s reported returns.


Stock Exchanges Hit New Highs Even As Volume Wilts
Bob Pisani, CNBC
Stock exchanges hit new highs even as volume continues to wilt: what happened to volume?
It’s a bit of a surprise, but all the stock exchanges are at 52-week highs: New York Stock Exchange (NYX), IntercontinentalExchange (ICE), Nasdaq (NDAQ), CBOE (CBOE), and CME (CME).
What’s up?

Nasdaq Expands in Germany Amid Energy Derivatives Overhaul
Rachel Morison, BloombergBusinessweek
The biggest-ever overhaul of European energy derivatives rules is poised to pit Nasdaq OMX Group Inc. (NDAQ) against the European Energy Exchange AG in Germany as the share of power handled by bourses increases.


FERC Ruled Lacking Authority to Regulate Futures Contracts
Andrew Zajac, Bloomberg
The U.S. Federal Energy Regulatory Commission lacks authority to over futures transactions, the U.S. court of appeals in Washington ruled, handing a victory to the Commodity Futures Trading Commission and to ex-Amaranth trader Brian Hunter, who had been fined $30 million.

US CFTC derivatives rules may raise risk of energy price spikes: Lucas
Derivatives rules US regulators began developing nearly three years ago are driving participants from markets and creating a risk of energy price spikes, the chairman of the House of Representatives Agriculture Committee said Thursday.


These Volatility ETN Traders Made Out; Will It Last?
Brendan Conway, Barron’s
Nikolaj Gammeltoft and Cecile Vannucci of Bloomberg News report this morning on a very complex exchange-traded note that has risen 38% year-to-date. For a few reasons, the gains will be tough to keep up.

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