Observations & Insight
Editor’s Note: In observance of the Thanksgiving holiday in the US JLN Option will not be published Thursday or Friday (Nov 23-24). We will be back on Monday, November 27. For those in the US, have a great Thanksgiving!
Options Discovery Episode 25: The Science Behind Selecting a Strike; Jermal Chandler, Host of “Engineering The Trade,” Discusses Options Strike Price Selection and More With JLN’s Asma Awass.
In this episode of Options Discovery, Asma Awass discusses a vital component of an options contract: the strike price. This episode includes a breakdown of what a strike price is, its value in the contract, how a trader might go about selecting a strike price, and more! Asma then sits down with Jermal Chandler, a seasoned options trader and the host of “Engineering The Trade” on tastylive, and he shares more insight on strike price selection. You can view “Engineering The Trade” here: https://www.tastylive.com/shows/engineering-the-trade
Nvidia Options Hand Rare Gains to Traders Betting on Calmness
Jan-Patrick Barnert – Bloomberg via Yahoo Fianance
Betting that Nvidia Corp.’s shares would barely budge after the chip maker posted results has been a losing wager for most of the last two years. Wednesday was an exception.
Hedge fund short sellers suffer $43bn of losses in market rally; Managers caught out in ‘painful’ rally as investors bet on quicker interest rate cuts
George Steer – Financial Times
Hedge funds betting on a decline in US and European stock markets have suffered an estimated $43bn of losses in a sharp rally over recent days. Short sellers, many of whom had built up bets against companies exposed to higher borrowing costs over the past year or so, have been caught out by a “painful” rebound in “low quality” stocks this month, said Barclays’ head of European equity strategy Emmanuel Cau. That has come as the market has grown more confident that the US Federal Reserve’s cycle of rate rises is finally over.
Top Five Takeaways from SIFMA’s 2023 Market Structure Conference
In this episode of The SIFMA podcast, Joe Siedel, SIFMA’s Chief Operating Officer, and colleague Ellen Greene, Managing Director of Equity and Options Market Structure, discuss why the SEC’s rulemaking agenda continues to raise questions. They dive into some of the key questions around the equity market structure proposals and how they may affect listed options and innovation. With the move to T+1 next May, Joe and Ellen also talk about why customer education is a critical component in the transition.
Crushed FX volatility as dollar, finally, subsides
Mike Dolan – Reuters
If you were looking for a klaxon to mark the end of the interest rate cycle, a crushing of currency market volatility rings loudly.
Deutsche Bank’s CVIX (.DBCVIX) – the currency market’s version of Wall St’s “fear index” of stock volatility and a weighted average of implied “vol” in nine major pairings – has basically imploded.
Is the Stock Market Open on Thanksgiving? Here’s the Holiday Schedule
Hannah Miao and Hardika Singh – The Wall Street Journal
U.S. markets will be closed on Thanksgiving and on Christmas Day. (Andrew Kelly/Reuters)
Is there any U.S. trading on Thursday?
No. The New York Stock Exchange, Nasdaq Stock Market and U.S. bond markets will be closed for the Thanksgiving holiday.
What about Black Friday?
The NYSE and Nasdaq will close early, at 1 p.m. ET, on the Friday after Thanksgiving. Bond markets will also close early, at 2 p.m.
Regulation & Enforcement
Binance and Its CEO, Changpeng Zhao, Agree to Pay $2.85 Billion for Willfully Evading U.S. Law, Illegally Operating a Digital Asset Derivatives Exchange, and Other Violations
The Commodity Futures Trading Commission today announced Changpeng Zhao, and his companies Binance Holdings Limited, Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited (together, Binance) agreed to a proposed consent order for permanent injunction, civil monetary penalty, and equitable relief that, if entered by the U.S. District Court for the Northern District of Illinois, will resolve all charges the CFTC brought against Zhao and Binance for knowingly disregarding provisions of the Commodity Exchange Act (CEA) to profit from their operation of an illegal digital assets derivative exchange.
US Treasury market debate around hedge fund collateral intensifies
Davide Barbuscia and Carolina Mandl – Reuters
As U.S. regulators ready rules that would push more trading in Treasuries to a central clearing venue, the industry’s focus is turning on a key question: how much collateral should hedge funds and others put up to trade there. At issue is whether imposing minimum requirements for collateral, called margin or haircuts, would raise trading costs and curb market liquidity versus the need to guard against a painful collapse in the world’s biggest bond market.
Crypto Traders Load Up on Bitcoin Topside Option Plays After Binance’s Guilty Plea
Omkar Godbole – CoinDesk
Binance chief Changpeng “CZ” Zhao on Tuesday stepped down and pleaded guilty to violating U.S. anti-money laundering laws as part of a $4.3 billion settlement, in what may come across as the most significant blow to the crypto market since the collapse of Sam Bankman-Fried’s exchange FTX last year.
But that’s certainly different from how traders look at the events.
Options Jive: Q3 Earnings Analysis
If you want to trade like a tastylive trader, you have to learn how to talk like a tastylive trader. Sit down with Tom and Tony as they dish out and discuss popular trading topics that give you an edge when opening, closing and managing your trades.
Microsoft Is Trading Near Its Record High. It’s Still Undervalued.
Steven M. Sears – Barron’s
Investors should think of Microsoft as a red-hot stock that trades at a stodgy multiple.
In #Vol411, Joe Tigay @JoeTigay lets us know that the $VIX Index is below the 13 level, making it low even for a holiday shortened week, so far the #markets are higher today, consumer sentiment seems to be in line with expectations and more.