Observations & Insight
R.J. O’Brien & Associates Mourns the Loss, Honors the Life of Chairman Emeritus Robert J. O’Brien, Sr. at the Age of 103
CHICAGO, Jan. 5, 2022 – Chicago-based R.J. O’Brien & Associates (RJO) today announced the passing of the firm’s Chairman Emeritus, Robert J. O’Brien, Sr., yesterday at the age of 103. The company shared statements about the news.
RJO Chairman and CEO Gerald Corcoran said: “Our hearts are heavy at RJO as we mourn the loss but honor the amazing life of Robert J. O’Brien, Sr., the patriarch of the O’Brien family who laid the foundation for the firm we are today. At the age of nearly 104, Bob was an inspiration to so many in the futures industry. His integrity, market knowledge and the knack to connect with market participants was unmatched. Bob continued to inspire us all with his profound integrity and sharp wit. He took tremendous pride in our organization and, of course, in his loving family that meant the world to him. We are truly grateful for his guidance over the years and blessed that we were able to celebrate our Centennial with him in 2014.
“On behalf of the firm, we extend our deepest condolences to his children and grandchildren – several of whom remain our majority owners, employees and active Board members today – as well as his great-grandchildren. We will miss Bob dearly, but it helps to know that he and his wife, Gerry – who passed three years ago just eight days shy of her 100th birthday – led such full and wonderful lives together.”
RJO is the last surviving founding member firm of the Chicago Mercantile Exchange, now CME Group. Robert O’Brien, Sr. served two consecutive terms as the exchange’s chairman during a pivotal time in the history of the exchange, playing a significant role in making the governance structure more democratic and professional. He was on the Board of CME from 1964 through 1977 and was inducted into the FIA Futures Hall of Fame in 2007.
“A true pioneer of finance, Robert J. O’Brien, Sr. was instrumental in expanding futures trading to new users around the world,” said Terry Duffy, Chairman and Chief Executive Officer, CME Group. “Under his leadership, R.J. O’Brien & Associates grew into the largest independent futures brokerage and clearing firm in the United States. During his long and storied tenure, Bob made many significant contributions to our industry, serving as Chairman of the Chicago Mercantile Exchange from 1967-68 and sponsoring the first woman to work on the trading floor. His legacy is a testament to the value he created in his firm as well as the many relationships he built with his employees, clients and – most importantly – his family.”
Leo Melamed, Chairman Emeritus of CME Group, said: “I am deeply saddened. Bob was instrumental in joining me in the 1950s and ’60s to revolutionize the Chicago Mercantile Exchange. Throughout his life, Bob O’Brien was a pillar of honesty and dignity as reflected in his firm, R.J. O’Brien & Associates. I commiserate his loss and stand ready to celebrate his life of wisdom and integrity.”
O’Brien is survived by five children, 22 grandchildren and 33 great grandchildren. A native of Chicago, he returned to the city after serving in the Navy in World War II and graduated from DePaul University.
Memories shared by O’Brien when he was 96 about the firm’s first 100 years in business can be found in the RJO Centennial video at https://www.rjobrien.com/about/historical-timeline.
Options Exchange Market Share — December 2021
Nancy Pelosi’s husband bought call options in these 5 stocks as 2021 came to a close
Matthew Fox – Markets Insider
Paul Pelosi, investment manager and the husband of House Speaker Nancy Pelosi, purchased up to $3.5 million worth of call options in mega-cap stocks late last year, according to a financial disclosure form filed last week.
His biggest purchase was up to $1.5 million worth of call options in Salesforce on December 20, according to the disclosure. Specifically, he purchased 130 call options with a strike price of $210 and an expiration date of January 20, 2023.
Rare SOFR Trade Highlights a Key Glitch in Libor’s Transition
Edward Bolingbroke – Bloomberg
A unique trade in options tied to the Secured Overnight Financing Rate turned heads in the U.S. rates options market on Tuesday, showing how far the contracts are from linking to Libor’s replacement.
The short call position was in the December three-month SOFR options, referenced by futures tied to Libor’s heir, which is the current benchmark for the popular eurodollar options. The trade size was just 5,000 contracts. But it still was more than double the outstanding positions held across all three-month SOFR options, a miserly 7,772 contracts as of Tuesday’s close.
From Ken Griffin to Ray Dalio, here are the biggest hedge fund winners and losers in a year marked by retail investor chaos and bad interest rates bets
Bradley Saacks – Markets Insider
Overall hedge funds did well in 2021 despite fears of inflation and renewed regulatory oversight with a new administration in office.
The industry hit the $4 trillion mark in total assets, according industry data tracker Hedge Fund Research, and fund liquidations in the third quarter fell to their lowest mark since 2006. The average hedge fund made roughly 9% through November, and the space is set for its third straight year of positive returns — comforting investors who were concerned that the industry couldn’t handle volatility anymore.
Markets Jingle, but Not All the Way, to a Santa Rally
Hardika Singh – WSJ
Santa Claus came to Wall Street again.
Major U.S. indexes mostly rose to start 2022 in a so-called Santa Claus rally, reflecting that many investors are still enthusiastic for stocks even in a market that has recently notched multiple record highs. A Santa rally refers to a long-held trend where stocks generally perform well in the period that includes the last five trading days of the old year and first two trading days of the new year.
Passive ETFs hit by billion-dollar rebalancing costs
Steve Johnson – Financial Times
US index-tracking funds are throwing away $3.9bn a year by using predictable, mechanical trading strategies that are exploited by nimbler market participants, according to academic research.
The losses would cost an investor who built up a $2m retirement portfolio over 30 years via passive mutual or exchange traded funds $29,000, the analysis found.
Robinhood wants to give first-time traders investment advice. Here are all the reasons to be concerned.
Jacob Passy – MarketWatch
Robinhood is looking to educate novice investors on the first steps they should take. But financial experts argue that people just starting off on their financial journeys should proceed with caution when using investment apps.
On Tuesday, Robinhood rolled out a new service called “First Trade Recommendations” aimed at first-timers just breaking into the investing landscape. The service “allows customers to learn by doing,” the company said in a blog post.
Intercontinental Exchange Reports December, Fourth Quarter and Full Year 2021 Statistics; Fourth Quarter Futures & Options ADV +16% y/y including Energy +17% y/y; Record annual volume across Brent, Heating Oil, TTF gas and Global Environmentals
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported December, Fourth Quarter and Full Year 2021 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
Equity Derivatives: Introduction of Equity Options, Single Stock Futures and Single Stock Dividend Futures, cancellation of admission to trading for Single Stock Futures and Equity Options
The Management Board of Eurex Deutschland took the following decisions with effect from
24 January 2022:Introduction of two Single Stock Futures pursuant to Annex A to the Contract Specifications (Attachment 2), Introduction of one Equity Option pursuant to Annex B to the Contract Specifications (Attachment 2), Introduction of one Single Stock Dividend Future pursuant to Annex D to the Contract Specifications (Attachment 2), Cancellation of admission to trading or six Single Stock Futures and two Equity Options pursuant to Annex A to the Contract Specifications (Attachment 2), Extension of maturity for products LOGN and LOGE from 24 to 60 months, pursuant to Annex B to the Contract Specifications (Attachment 2) Inclusion of the new Single Stock Dividend Futures in the existing Liquidity Provider (LP) scheme effective from 1 February 2022 (Attachment 3).
Personal Finance: Can Your Portfolio Outsmart the Three Fed Bears?
Aaron Brown – Bloomberg
Once upon a time, Goldilocks saw inflation at 6.8% and knew the Federal Reserve would have to act. Worried about the value of her home and stock portfolio, she visited the Fed house. First, she saw Papa Fed Bear who was big and scary. “We’re in a bubble. I’m going to cause asset prices to crash, especially stock and real estate prices. Interest rates and the cost of capital will soar, leading to bankruptcies and major recession. Only after a major purge can healthy economic growth resume.”
SPX Could Face Headwinds During First Half of 2022
Rocky White – Schaeffer’s Investment Research
The S&P 500 (SPX) has seen 29%, 16%, and 25% returns over the past three years, respectively. This week, I will look at whether double-digit returns are sustainable for yet another year. In addition, the next 12 months will mark the second year of U.S. President Joe Biden’s term, which may be a cause for concern during the first half of 2022.
Laughing at Matt Damon on Reddit, Twitter, and Other Crypto, Meme-Stock Metrics
Lionel Laurent – Bloomberg
Taking the musings of social media seriously was one of last year’s expensive lessons for sophisticated investors.
From GameStop Corp.’s epic short squeeze to the boom in cryptocurrencies, non-fungible tokens and ETFs, retail punters poured money into trending market tips while sharing their highs and lows on Twitter, TikTok and Reddit. U.S. investors shoveled more than $1 trillion into equities last year — more than the past two decades combined.
Boomers Retiring Is ‘Catastrophe’ for Economy, Ex-McDonald’s CEO Warns
Avery Hartmans – Business Insider
McDonald’s former CEO is warning of an impending “catastrophe” for the labor market as Baby Boomers — and their children — begin to reach retirement age.
Ed Rensi, who served as the fast-food chain’s CEO until 1997, said during an interview with Fox News Tuesday that the volume of people starting to retire has been overlooked in the conversation about labor challenges nationwide. As Rensi pointed out, the oldest baby boomers are now in their mid-70s, which means even their kids are getting close to retirement.