JLN Options: No tax please, we’re British, Italian, French…

Feb 27, 2013

Lead Stories No tax please, we’re British, Italian, French…
Steve Grob, Fidessa
The debate about Financial Transaction Taxes (FTTs) seems to roll on and on. Italy’s FTT is due to come into force this Friday and two democrats in the US want to introduce an American FTT. Even EU Tax Commissioner Algirdas Semeta says a global tax on financial transactions eventually should be a reality.
http://jlne.ws/13jIeLx FTSE introduces UK and Italian equivalents of the VIX
Simon Smith, ETF Strategy
FTSE Group, a leading global index provider, has introduced the FTSE Implied Volatility Index Series (IVI), a new suite of indices that measure the implied volatility of the UK’s FTSE 100 and Italy’s FTSE MIB stock indices. The indices will likely be seen as local equivalents of the widely followed CBOE Volatility Index (VIX).
http://jlne.ws/V9O5zx HFT dominance threatens less-liquid US options
The Trade News
A shift in the competitive environment for options market making could lead to a drop in liquidity for lesser traded instruments, as technology continues to influence trading in the asset class, research has shown. The findings are part of a new report from consultancy TABB Group, which stated that 59% of total trading volume in US options now comprises high-frequency trading (HFT) strategies. In terms of market making flow, HFT accounted for 94% of total volume traded.
http://jlne.ws/ZJj8EU CBOE’s VIX Options Establish New Single-Day Volume Record 
Press Release (CBOE)
Chicago Board Options Exchange (CBOE) today reported that options on the CBOE Volatility Index (VIX index) established an all-time, single-day volume record, totaling an estimated 1,388,937 contracts. Today’s VIX options volume beat the previous record of 1,219,226 contracts traded on September 11, 2012.
http://jlne.ws/ZAkSwc VIX retreats sharply after spike; its ETFs fare better
Wallace Witkowski, MarketWatch
As the CBOE Volatility Index pulled back Tuesday after a spike in the prior session, exchange-traded products linked to the “fear index” largely held their ground.
The reason may stem from the securities’ construction, which ironically weed out some volatility, along with a high level of market uncertainty going forward.
http://jlne.ws/V9HO6Q Bank of America Resumes Coverage on Financial Exchanges (CBOE, ICE, NDAQ)
Benzinga
In a research report sent to investors on Tuesday morning, Bank of America (NYSE: BAC) announced that it was resuming coverage on publicly traded financial exchanges IntercontinentalExchange (NYSE: ICE) and Nasdaq OMX Group (NASDAQ: NDAQ), which it rated at Buy, as well as CBOE Holdings (NASDAQ: CBOE), which it reinstated with a Neutral rating.
http://jlne.ws/ZAWwlZ Mini Options, Big Potential 
Michael Shulman, InvestorPlace
The options world – including the weekly options world – is on the leading edge of innovation within the trading industry. Often these changes benefit institutional investors and professional traders at the expense of retail investors, such as the current trading bias in high speed trading.
Last week, the CBOE (Chicago Board Options Exchange) did something for the retail investor. Beginning March 18, mini-options representing just 10 shares, rather than 100, will be available.
http://jlne.ws/V9OBxe

Exchanges

CME Merger Talks Raise Fee Concern That May Stymie Deal
Nina Mehta, Nandini Sukumar & Inyoung Hwang, Bloomberg
CME Group Inc. (CME)’s overtures toward Deutsche Boerse (DB1) AG are likely to raise the same concern among customers about higher fees that helped scuttle last year’s deal with NYSE Euronext.
http://jlne.ws/ZAkTAj CME Positioned to Compete as Standalone Firm, Duffy Tells CNBC
Whitney Kisling, Bloomberg
CME Group Inc. (CME) is able to compete as a standalone company, Chairman and President Terrence Duffy told CNBC, declining to comment on merger plans for the world’s largest futures exchange.
http://jlne.ws/V9Ic5n CME Group exec chairman leaves door open for possible big deals
Reuters
CME Group Inc Executive Chairman Terrence Duffy said on Tuesday the trading volume growth of the Chicago-based exchange operator is due to its past acquisitions, and suggested the company may yet have appetite for more big deals.
http://jlne.ws/V9IAAH

Regulation

SEC Must File Fraud Suits Sooner, U.S. Supreme Court Rules
Greg Stohr, Bloomberg
The Securities and Exchange Commission must move more quickly in pressing some fraud lawsuits, the U.S. Supreme Court ruled in a decision that may affect agencies across the government.
http://jlne.ws/ZAQwd5 SEC Shines Light on Derivatives-Backed Notes: Credit Markets
Kevin Dugan, Bloomberg
Lenders from JPMorgan Chase & Co. (JPM) to Bank of America Corp. (BAC) that sold $51 billion of securities backed by equity derivatives the past two years are being pushed by regulators to disclose that the banks valued the debt as much as 10 percent less than customers paid.
http://jlne.ws/ZGafMi FINRA Pulls In $900,000 from Trade & Reporting Violations
Peter Chapman, Traders Magazine
The Financial Industry Regulatory Authority will collect about $930,000 in fines from about a dozen brokerages for stock and options trading and trade reporting violations, according to the regulator’s February disciplinary actions report.
http://jlne.ws/Yzou0I S.E.C. Nominee Tries to Allay Skepticism
Ben Protess, Dealbook
Lawmakers are scrutinizing Ms. White ahead of her Senate confirmation hearing, raising questions about the former prosecutor’s lack of regulatory experience and the challenge of policing Wall Street firms she recently defended in private practice.
http://jlne.ws/ZARIxc

Technology

SunGard named best OTC Derivatives Trading Platform
Press Release (FX-MM)
SunGard has been named “Best OTC Derivatives Trading Platform” in the 2013 Wall Street Letter Institutional Trading Awards for its Front Arena solution.
http://jlne.ws/ZAQmlU R.J. O’Brien Introduces Mobile Trading Application for iPhone, Android
Press Release (Sacramento Bee)
R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced the release of the firm’s first-ever mobile trading application, RJO Mobile Trader (RJO MT). Available for clients of the firm and its introducing brokers (IBs) who use an iPhone or Android phone, RJO Mobile Trader is a secure application accessible via Apple’s App Store and Google Play.
http://jlne.ws/ZARpSO

Strategy

A skewed perspective: how to use implied volatility skew data 
FOW
Jared Woodard and Brandon Henry evaluate different implied volatility skew formulas and expalin their practical uses in investor’s portfolios.
http://jlne.ws/V9JgWO How to Short the Sequester] ]>

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