LEAD STORIES

Of pits and puts: the case for options algos
Eva Szalay – Automate Trader
With about a quarter of options now executed electronically in the US, European markets are expected to increasingly move to screens in the coming years. But challenges in both markets remain as pit traders still rule execution in complex contracts.
http://jlne.ws/152IIoV

Why Hasn’t the CBOE Volatility Index (VIX) Spiked?
Adam Warner – Schaeffer’s Investment Research
The market has quietly had a somewhat ugly couple of weeks thanks to … Fear of Tapering, I guess? Who knows for sure, and it really doesn’t matter much. It’s far from a crash, but we’ve drifted about 3.5% off the highs on Aug. 2.
http://jlne.ws/152IiPs

Japan Exchange Group set for major derivatives push
Michelle Price – Financial News
The Japan Exchange Group – created by the $1.7 billion merger of the Tokyo Stock Exchange and the Osaka Securities Exchange in January – is planning to boost its derivatives volumes by almost 50% within two years and revive trading in the local commodities market.
http://jlne.ws/152Jfr4 

Traders beware: Six weeks of intense volatility ahead
Katie Holliday – CNBC
A relatively light few weeks of market news might have lulled traders into false sense of security, but one analyst told CNBC investors should now prepare for an intense period of volatility.
http://jlne.ws/12jxnQj
**The VIX saw its shadow?  — SR

Is the S&P; 500 ‘crashing’ now?
Avi Gilburt – MarketWatch
This market will not likely die easily, and still has some potential moves that can yet shake the bears, assuming there are any devoted ones left. I mean, this past week, even David Rosenburg, the noted deflationist, has switched sides.
http://jlne.ws/152KmqG

S&P; 500 June Quarter Earnings Growth Was Negative When Excluding The Financials
Chuck Jones – Forbes
What is a bit disturbing is when the Financial sector’s earnings results are removed the remaining S&P; 500’s earnings growth rate turns negative and was down 3.1% in the quarter.
http://jlne.ws/152KKpe

Videocast: Playing VIX settlement
optionMONSTER
http://jlne.ws/152JHWa

Is the futures market transparent enough?
Lynne Marek – Crain’s Chicago Business
Federal regulators are re-examining the controversial policy of allowing big futures trades to be kept temporarily secret from the public market, a practice that financially benefits Chicago futures exchange company CME Group Inc.
http://jlne.ws/12jxdbV

EXCHANGES

CME under fire over cash for trades in Brent
Ajay Makan and Gregory Meyer – Financial Times
The biggest US futures exchange’s campaign to break into North Sea oil has been marked by unusual trading patterns as computerised firms engineer ways to exploit a cash-for-volume scheme, according to market participants.
http://jlne.ws/19tQzgt

CME and ICE mull joining new European repositories body
Philip Stafford – Financial Times
CME Group and IntercontinentalExchange, the US derivatives groups, are among the market participants considering taking part in a new trade body being set up to resolve issues around repositories, the new derivatives data warehouses mandated by global regulation.
http://jlne.ws/1alqPFV

It’s Going To Take Something Really Spectacular To Derail The ICE-NYSE Merger Now 
Joe Shazar – Dealbreaker
The Securities and Exchange Commission approved the IntercontinentalExchange Inc.’s planned takeover of NYSE Euronext, moving the mega-exchange merger one step closer to completion.
http://jlne.ws/152GS7N

REGULATION

Obama to meet with financial regulators on Wall Street reform law
Sarah N. Lynch – Reuters
President Barack Obama will sit down with the leading U.S. financial market regulators on Monday to discuss their progress in implementing the 2010 Wall Street reform law, the White House said on Sunday.
http://jlne.ws/12jxQSB

STRATEGY

Ways to monitor shifting sentiment
Chris McKhann – optionMONSTER
I am mathematically inclined by nature and like to look at the numbers, but I also really like looking at the market from the perspective of sentiment.
There are a number of ambiguous ways of getting a read on sentiment. While calling tops or bottoms is almost impossible, I do look for signs that the market is running out of steam in either direction.
http://jlne.ws/152Lhr2

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