Lead Stories

Nasdaq OMX’s BX Options Exchange to Copy Electronic Market Rules
By Nina Mehta, Businessweek
Nasdaq OMX Group Inc. (NDAQ) (NDAQ) will use rules from another electronic options market it owns to hasten the introduction of its third equity derivatives venue, the company told regulators. Nasdaq OMX BX Options will utilize trading rules from Nasdaq Options Market, the firm told the Securities and Exchange Commission in a rule filing that didn’t say how the venue will differentiate itself from other markets. The exchange, slated to start trading in late June, must win approval before it can be introduced.
http://jlne.ws/IBBXBN

UPDATE: CBOE’s CEO Sees Compliance Review Continuing
-CBOE CEO: SEC compliance investigation ongoing, new compliance hires seen
-Steps taken to refocus staff on compliance obligations, CEO says
-CBOE reported a profit of $33.4 million, up 2% from a year earlier
(Updates with CEO comments on compliance investigation.)
By Jacob Bunge Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–The top executive of the Chicago Board Options Exchange said Tuesday that a reorganization of its compliance department would continue as federal regulators continue to investigate the CBOE’s role as a market regulator. CBOE Holdings Inc. (CBOE) has held companywide “educational seminars” focused on regulatory compliance and it is sharing results of an internal compliance investigation with the Securities and Exchange Commission, according to William Brodsky, chief executive and chairman.http://jlne.ws/K1qLMl

Europe Puts at Record Versus S&P 500 Before Elections: Options
By Cecile Vannucci and Nikolaj Gammeltoft, Bloomberg
Traders have never paid so much to protect against European stock losses relative to the U.S. as investors prepare for weekend elections in France and Greece. Implied volatility for three-month contracts closest to the level of the Euro Stoxx 50 Index was 54 percent higher yesterday than the Standard & Poor’s 500 Index, according to data compiled by Bloomberg. The gap widened from a 2012 low of 18 percent on March 13, the data show.
http://jlne.ws/KqNnTm

Exchanges

CBOE 1Q Profit Up 2% In Quieter Quarter For Options Trade
By Jacob Bunge Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–The parent of the Chicago Board Options Exchange saw its first-quarter profit rise 2% amid slower dealing in U.S. stock options, topping expectations. Lackluster volatility pressured business at CBOE Holdings Inc. (CBOE), though the company captured a larger share of the market after changing up its trading fees in January.
The exchange’s trading volume totaled about 4.9 million million contracts per day in the first quarter, down 4% from a year earlier. The CBOE is the biggest U.S. options exchange in terms of trading activity, according to figures compiled by industry clearinghouse OCC.CBOE profits rise despite slower trading
By Vivianne Rodrigues and Arash Massoudi in New York, FT.com
CBOE Holdings, which operates the Chicago Board Options Exchange, said first-quarter earnings were slightly better than expected, but a drop in trading volume weighed on the company’s revenue. The Chicago-based company, which also operates smaller exchange for futures, equities and second options-trading platforms, said first-quarter earnings excluding some special items were 37 cents a share, compared with 36 cents in the same period of 2011.
http://jlne.ws/IreLFIApril Trading at CBOE Futures Exchange Up 103% Over Year Ago
Press Release
Average Daily Volume for Month is Second-Highest All-Time
The CBOE Futures Exchange, LLC (CFE) today announced that trading volume during April 2012 totaled 1,692,624 contracts, an increase of 103 percent from the 834,892 contracts traded in April 2011. April 2012 ranks as the third busiest month in CFE history and marked the seventh time that total monthly volume surpassed the one million contract benchmark at CFE.
http://jlne.ws/Kv0io5TMX Group Welcomes SEC Approval of BOX as National Securities Exchange and Self-Regulatory Organization
TMX GROUP INC. Press Release
TMX Group Inc. welcomed the recent decision by the U.S. Securities Exchange Commission to grant BOX Options Exchange LLC (BOX) a national securities exchange license. The license enables BOX to act as its own self-regulatory organization (SRO), which it expects to begin doing in mid-May.
http://jlne.ws/KaiEQu

BATS Global Markets Reports One of the Best U.S. Equities Months in Seven-Year History
Press Release
Strong European Market Share, Spanish Market Share Gains Continue Following Successful Chi-X Europe Technology Transition; BATS Options Reports 3.1% Market Share, Up From 2.4% One Month Ago
KANSAS CITY, Mo. and LONDON — BATS Global Markets (BATS), a leading operator of securities markets in the U.S. and Europe, today reported one of its strongest months on record for U.S. equities market share, which reached 11.5% in April, up from 10.6% one year ago and 10.9% in March while BATS Options market share grew to 3.1%.
http://jlne.ws/IJV7zq

NASDAQ OMX Stockholm lists options on XACT OMXS30(TM)
Press Release
For the first time options will be listed on an exchange traded fund (ETF) on NASDAQ OMX Stockholm. Starting today standardised options can be traded on the exchange-traded fund XACT OMXS30.
– XACT OMXS30(TM), which was listed in 2000, is today among the most traded securities on NASDAQ OMX Stockholm, says Henrik Norén, Head of XACT. Trading in ETFs in Sweden has increased exponentially, from a turnover in 2001 of almost 1.8 billion SEK to just over 220 billion SEK last year. The fact that NASDAQ OMX Stockholm lists options on our exchange traded fund XACT OMXS30(TM) is further evidence of the popularity of our ETFs. The options will now open the possibility for further investment strategies with an ETF as base, which we believe will lead to an even greater interest for our largest ETF, says Henrik Norén.
http://jlne.ws/KakUqW

ICE Brent futures and options average 616,720 contracts/day in Apr, up 43%
London (Platts)–The IntercontinentalExchange Wednesday reported average daily volumes for ICE Brent crude futures and options totaled 612,720 contracts in April, a 43% increase on the 428,433 contracts reported for April last year.
http://jlne.ws/ICi7X6

Strategy

Barclays VIX Note Vexes Investors Not Savvy on Volatility
By Matt Robinson and Margaret Collins, Bloomberg
Ian Mathers reckoned stocks were due for a slide as the Standard & Poor’s 500 Index approached a three-year high in February. So the 34-year-old Medevac pilot and day trader bought an exchange-traded note from Barclays Plc (BARC) that’s designed to profit when stock prices get more volatile. Mathers didn’t realize the note tracks a different volatility index from the widely followed S&P 500 VIX benchmark, and could produce much different results. The confusion cost him 6 percent of his investment over two days.
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tp://jlne.ws/K2ga42

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