Observations & Insight
Intercontinental Exchange’s Lynn Martin Walks JLN Through New ICE Portfolio Auction Platform
The world of bond trading is being swept into the electronic trading world and ICE has offered a new way to automate and make the trading of large portfolios of bonds easier. The ICE Portfolio Auction Platform leverages ICE data and risk management tools and creates an automated process for trading portfolios of bonds.
John Lothian News interviewed Lynn Martin, the president of fixed income and data services at Intercontinental Exchange, over Zoom about the exchange’s new Portfolio Auction Platform and how it works.
JJL: Here is a list of CME Group product launches: Freight Route TC18 (Baltic) Futures – This Week, Freight Route Liquefied Petroleum Gas (BLPG3) (Baltic) Futures – This Week, Micro Bitcoin Futures – May 2, USD Crude Palm Oil Bullet Futures and Options – May 2 and Lithium Hydroxide CIF CJK (Fastmarkets) Futures – May 2.
Here is a list of recent product changes at the CME Group: Listing SOFR 3 Month Strip Spreads – This Week, Change to Option Style for Black Sea Corn and Black Sea Wheat Options – This Week, Change to Maximum Order Quantity for Gold Futures Calendar Spreads – May 2 and Listing Cycle Expansion for EUR/USD Monthly Volatility-Quoted Options and JPY/USD Monthly Volatility-Quoted Options – May 16.
Nasdaq launching options on the Nasdaq-100 Micro Index
Nasdaq Inc on Thursday said it was launching options on the Nasdaq-100 Micro Index as a lower-cost way for retail investors to gain exposure to the popular Nasdaq 100 Index. Retail investors have entered the securities markets in droves over the past year as large retail brokers have dropped trading commissions, coronavirus lockdowns forced people to work from home, and as “meme stocks,” like GameStop Corp and AMC Entertainment, soared in value in January.
3 reasons the stock market rally is set to continue despite recent volatility, according to UBS Wealth Management
Will Daniel – Markets Insider
The stock market rally is set to continue despite a recent uptick in volatility, according to UBS Global Wealth Management’s Chief Investment Officer Mark Haefele.
In a note to clients on Wednesday, Haefele said he expects further spikes in volatility ahead, but believes the stock market rally will continue amid strong corporate earnings and an economic reopening brought about by rising vaccinations.
World’s Biggest Stock Owner Says Banks Just Displaced Tech
Lars Erik Taraldsen and Ott Ummelas – Bloomberg
The world’s biggest owner of listed equities, Norway’s $1.3 trillion wealth fund, says financial firms have displaced tech stocks as the main drivers of returns.
Norges Bank Investment Management, which owns about 1.5% of global stocks, beat its benchmark index in the first quarter, and also outperformed the MSCI World Index.
Exchanges and Clearing
Nasdaq Launches Nasdaq-100 Micro Index Options (XND)
Nasdaq empowers Main Street investors to harness the Nasdaq-100 index through options
Nasdaq (Nasdaq: NDAQ) today announced the launch of options on the Nasdaq-100 Micro Index (XND), which expands access for Main Street investors to the Nasdaq-100 index in a seamless and cost-efficient way. These new index options are now listed on the Nasdaq PHLX options exchange, and are available on many trading platforms that support index options.
*****JJL: What we need here is a celebrity endorsement from Paul Rudd.
ETF derivatives: Introduction of new ETF options
The Management Board of Eurex Deutschland took the following decisions with effect from 17 May 2021: Introduction of five new ETF options
This circular contains all information on the introduction of the new products and the updated sections of the relevant Rules and Regulations of Eurex Deutschland.
MarketAxess Reports Record First Quarter 2021 Revenues of $195.5 Million, Operating Income of $103.5 Million and Diluted Eps of $2.11
MarketAxess Holdings Inc., the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced results for the quarter ended March 31, 2021. “MarketAxess started the new year on a strong note with record quarterly credit trading volume and record revenue,” said Rick McVey, Chairman and CEO of MarketAxess. “Market share gains are driving the volume and revenue growth as electronic trading continues to advance in fixed-income markets around the world. We are seeing positive signs in new product areas, and in all geographic regions, as we invest to support long-term growth. Trading automation continues to accelerate with both our investor and dealer clients.”
SGX and CNBC partner to create indices focused on growth economies and sectors of the future
Asia’s most international marketplace Singapore Exchange (SGX) and CNBC, the world’s number one business and financial news network, have jointly unveiled the iEdge-CNBC China Growth Economy Index, the first in a series of co-branded indices capturing key investment themes in a post-COVID world.
MIAX and SIG Index Licensing to Launch Corporate Tax Rate Futures on MGEX
Miami International Holdings
MIAX creator and operator of high-performance securities exchanges, products and services, and SIG Index Licensing, LLC (SIG Index Licensing) will launch cash-settled futures contracts on SIG Index Licensing’s U.S. Corporate Tax Rate Index. The new futures contracts will begin trading on May 24, 2021.
Regulation & Enforcement
SEC chief plots first moves in new role
Sylvan Lane – The Hill
Securities and Exchange Commission (SEC) Chairman Gary Gensler’s lengthy to-do list for regulating U.S. financial markets has Wall Street anxiously awaiting his first moves. The SEC’s top official took office this week amid a yearlong financial market frenzy and a flood of novel investment products with unknown implications for the broader investment industry. The rise of popular online trading applications have drawn tens of thousands of new investors into the market with easy access to stocks, digital currencies, exchange traded funds and options.
MIT Economics Professor Daron Acemoglu to Receive CME Group-MSRI Prize in Innovative Quantitative Applications
CME Group, the world’s leading and most diverse derivatives marketplace, and the Mathematical Sciences Research Institute (MSRI), announced its 15th Innovative Quantitative Applications Prize recipient. Daron Acemoglu, Institute Professor at the Massachusetts Institute of Technology (MIT), is the 2020 CME Group-MSRI Prize winner for his work in economics and mathematics. A virtual event honoring Acemoglu will be hosted by CME Group on May 5, 2021 at 10:00 a.m. CT.
FEX Global Australian Futures Exchange deploys Itiviti’s Tbricks connectivity solution
Itiviti, a leading trading technology and service provider to financial institutions worldwide, today announced that the FEX Global Australian Futures Exchange (FEX Global) would rely on Itiviti’s Tbricks connectivity solution to provide market participants with a high-performance gateway to trade derivatives.
Charles Schwab Stock Is Tailor-Made for Volatile Times
Steven M. Sears – Barron’s
Volatility creates opportunity. Witness Tuesday’s broad-market decline, Wednesday’s bounceback, and the sharp swings in stocks in response to first-quarter earnings reports.
Investors are now sifting through those earnings reports amid incredible crosscurrents, ranging from the Covid-19 pandemic to rising interest rates. Rather than trading complex financial products, such as derivatives on the Cboe Volatility Index, or VIX, consider focusing on what could be called “Pavlovian volatility.”
Goldman Sachs says S&P 500 returns may tumble as U.S. economic growth peaks. Buy these stocks.
Jack Denton – MarketWatch
Stocks got back on the horse on Wednesday, with both the Dow and S&P 500 indexes finishing at their second-highest levels ever, as investors continue to smile on strong economic growth prospects. Much of that momentum carried into Thursday.
Strategists at Goldman Sachs are bullish on the U.S. economy, expecting sequential annualized U.S. gross domestic product growth to clock in at 10.5% in the second quarter of 2021. That would be the strongest quarterly growth rate since 1978 (outside of the surge in mid-late 2020, when the economy rebounded from a sudden halt).
Rising Star Talks Market Awareness and 2021 Trading Tips | Rolling Trades Series
Vonetta Logan – tastytrade
Oh man, do I wish I was on a white sandy beach in Mexico, after ripping down the Baja coast on my tricked out dirt bike, while my wealthy boyfriend has set up a picnic full of all of my favorite snacks and endless buffet of tacos. But no, I’m stuck in Chicago and it’s currently 38 degrees. Well, I can dream of warmer times as I recap this week’s Rolling Trades episode.
Fundamentals of Futures & Options (also applicable to Series 3 Exam)
For more than 30 years, IFM has consistently provided learners with a solid foundation and understanding of futures and options markets and trading including terminology, risk management, pricing, and basic trade strategies. This instructor-led virtual course includes lectures from an engaging instructor with real-world expertise and supported by class discussion, practice exercises and educational materials. The course fee includes two must-read industry books, “Futures and Options” and the “Guide to U.S. Futures Regulation.”
Dates: May 10, 2021 through May 14, 2021, 12:00 p.m. to 2:00 p.m.
Location: Virtual Live. 2-hour sessions over 5 days.
Instructor: Marti Tirinnanzi
Class size registration is limited to approximately 20 participants to promote student participation and interaction.
The World Federation of Exchanges to Hold 37th Clearing & Derivatives Forum This Week
The World Federation of Exchanges
The World Federation of Exchanges (“The WFE”), the global industry group for CCPs and exchanges, will hold the 37th edition of its Clearing & Derivatives Conference virtually this week. The conference runs from April 19 through April 23.
The conference brings together academics, policymakers, regulators, CCPs, derivatives markets and practitioners from around the world to exchange ideas on the opportunities and challenges for the future of central and bilateral clearing in the light of regulatory reforms, market structure changes and technological developments.
Clearing 101: Exchanges, Clearinghouses and CCPs
Dates: Sep. 15, 2021 12:00 p.m. – Sep. 16, 2021 1:30 p.m.
Location Virtual Live. Two 90-sessions over 2 days.
Instructor: Marti Tirinnanzi
Registration is limited to approximately 20 participants to promote student participation and interaction.
Join us for a short program (90 minutes each day for 2 days) that explains the multilateral systems that provide the infrastructure for transferring, clearing and settling payments, derivatives and other financial transactions among financial institutions and end users. Following Dodd Frank, clearinghouses became designated as Systemically Important Financial Market Utilities, vital to the operations of the financial markets and subject to heightened regulatory scrutiny. Buyers and sellers in exchange transactions rely on clearinghouses to intermediate transactions and to manage credit risks between trading parties. As such, clearinghouses promote transparency, efficiency, and stability by providing market-based pricing, daily settlement, and ensuring adequate capitalization for markets to function.
Q1 2021 ETD Volume
May 5, 2021; 10:00 a.m. to 11 a.m. ET
The webinar will highlight the main trends in trading activity in Q1 2021 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings. The webinar also will feature two guest speakers from UBS discussing the rise of retail participation in the U.S. ETD markets.
A New Virtual Experience
The Options Industry Conference is Going Virtual in 2021. Join OCC and the options exchanges for the 39th annual Options Industry Conference, April 28-29, 2021. While the conference will be held virtually for the first time in its history, the focus will continue to be the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
The Covered Call Options Strategy
Date: Wednesday, May 12, 2021
Time: 3:30 p.m. CT
Duration: 1 hour
Mark Benzaquen – Principal, Investor Education – OCC
For options investors, the covered call is one of the core strategies for income generation, but there are many details to consider before opening a position. On May 12, join The Options Industry Council’s Mark Benzaquen, a former pit broker who now focuses on options education, for a detailed overview of the covered call.
Opinion: Warren Buffett could teach traders in dogecoin, GameStop and other hot trends a few things about ‘Mr. Market’
Lawrence A. Cunningham – MarketWatch
As the old joke goes, St. Peter had some bad news for an oil prospector who appeared at the pearly gates of heaven: “You’re qualified for admission,” said St. Peter, “but, as you can see, the section for oil prospectors is packed. There’s no way to fit you in.”
After a moment, the prospector asked to say just four words to the present occupants. That seemed harmless to St. Peter, so the prospector yelled, “Oil discovered in hell!” Immediately, most of the oil prospectors stampeded out for the nether regions. Impressed, St. Peter invited the prospector to move in and get comfortable. The prospector paused, saying “No, I think I’ll go along with the rest of them. There might be some truth to that rumor after all.”