Oil Holds Above $80 as IEA Warns of Volatility, Higher Prices
Julia Fanzeres and Devika Krishna Kumar – Bloomberg
Oil was little changed as traders assessed OPEC’s skepticism around the strength of crude demand even after prices hit the highest since 2014.
Futures in New York pared losses along with equities as the dollar weakened after earlier falling as much as 1.5% on Wednesday. OPEC revised down its estimate for 2021 global oil consumption in its monthly market report. The group said that while the spike in natural gas prices could boost petroleum use in some areas, such as power generation, it could potentially curb demand in other areas, such as refining.
A crypto collapse is ‘plausible’ and regulation of the market is urgently needed, Bank of England’s deputy governor says
Isabelle Lee – Markets Insider
A crash in the cryptocurrency market is “plausible” and regulatory clarity is urgently needed, Bank of England Deputy Governor Jon Cunliffe said on Wednesday.
“Such a collapse is certainly a plausible scenario, given the lack of intrinsic value and consequent price volatility, the probability of contagion between cryptoassets, the cyber and operational vulnerabilities, and of course, the power of herd behavior,” he said during a speech at the SIBOS conference.
FX options flag FX risk from U.S. CPI and Fed minutes
Reuters via Nasdaq
U.S. CPI and Fed minutes Wednesday can give more clarity to the FX outlook, so they carry a risk of increased FX volatility, which is reflected in the price of overnight expiry (10-am New York Thursday) options.
FX volatility is unknown, so dealers use implied volatility to reflect expectations and determine the option premium before expiry, and that’s higher since capturing the CPI and Fed minutes.
No, Volatility is Not an Asset Class for Individual Investors
Martin Tillier – Nasdaq
Over the last few years, there has been a lot of talk about the democratization of investing. Commission-free trading and online access have been the major drivers of narrowing the gap between traders on Wall Street and Main Street for sure, but there is another way in which individuals have caught up with institutions: Retail investors now frequently use strategies and techniques that were, until relatively recently, exclusively used by desk traders in dealing rooms. One of those is to treat volatility as an asset class, something which has become a bit of a catchphrase amongst some financial advisors of late. It sounds good, but is it really a good idea for individual investors?
Before going any further, I should probably clarify what I mean by “volatility.”
Market outages are one area where UK and EU could collaborate amid divergence, says Cboe; According to Cboe Europe’s head of equities, ESMA and the UK are aligned in their approach to how venues should communicate outages to ensure market resiliency.
Annabel Smith – The Trade
Cboe Europe’s head of equities, Natan Tiefenbrun, has said that guidelines around market outages could be one area where the UK and the EU collaborate amid swathes of ongoing Brexit-induced divergence. Both the UK and the EU have stressed the importance of communication in their approaches to how trading venues should manage outages and trading disruptions.
CME Group International Average Daily Volume Reached 5 Million Contracts in Q3 2021, Up 13% from Q3 2020
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that its international average daily volume (ADV) reached 5 million contracts in Q3 2021, up 13% year on year. Reflecting all trading done outside the United States, volume increases were driven by global growth in Interest Rate and Energy products, up 54% and 31% respectively.
Hong Kong Cancels Stock Trading Because of Typhoon Kompasu
Dominic Lau and Jeanny Yu – Bloomberg
Hong Kong suspended schools and the city’s $6.3 trillion stock market canceled trading Wednesday as strong winds and rain from typhoon Kompasu lashed the financial hub.
Hong Kong Exchanges and Clearing Ltd. canceled securities trading, including the Hong Kong-China stock connect and derivatives markets, for all of Wednesday after Kompasu halted after-hours trading the day before. The city raised the storm warning alert to No. 8, the third-highest on its scale, from No. 3 Tuesday afternoon.
ICE Reports Record Volume in September on European Natural Gas Trades
Caroline Evans – Natural Gas Intelligence
Intercontinental Exchange Inc. (ICE) is logging more record trading activity on its European natural gas futures contracts amid increasing volatility in the global market.
An unprecedented 5.5 million Dutch Title Transfer Facility (TTF) futures and options were traded in September, 37% higher than the previous monthly record set in January, ICE said.
The exchange also saw record quarterly volumes. During 3Q2021, ICE reported 13.2 million TTF contracts traded. The previous record of 10.4 million contracts was set in the first three months of this year.
Regulation & Enforcement
SEC to Seek Admissions of Wrongdoing in Some Enforcement Actions
Dave Michaels – WSJ
Wall Street regulators said Wednesday they plan to require companies in some cases to admit wrongdoing when they settle civil enforcement actions.
The announcement is a return to a policy started during the Obama administration that the Securities and Exchange Commission largely abandoned during the Trump administration. The SEC has historically allowed companies and individuals to settle enforcement probes without admitting or denying the agency’s allegations, a practice that has made some liberal critics question the value of its policing efforts.
TRADEZERO Set To Go Public Through $550 MILLION SPAC Merger
New York-based online broker-dealer, TradeZero will go public through a merger with a blank-check firm in a deal that values the combined entity at $556 million, the companies said on Tuesday.
The new company will be called TradeZero Global Inc. upon the closing of the business combination with Dune Acquisition Corp (NASDAQ: DUNE) and is expected to be listed on the New York Stock Exchange under a new ticker symbol, “TRAD”.
This is the latest example of online trading brokers catching the boom of special purpose acquisition companies (SPACs). The most notable example was eToro and US SPAC Fintech Acquisition in a deal that values the social investment platform at a massive $10.4 billion.
Managing Portfolio Tail Risk with OTM Call and Put Options
OptionsBrewTV by Tradier (Video)
Lex and Steven talk with Kris Sidial on how he uses options skew and the “tails” to hedge portfolio risk.
The Stock Market Is Getting Bumpy. Here’s What Advisors Are Telling Clients.
Steve Garmhausen – Barron’s
The stock market has taken investors on a rough downhill ride for several weeks amid worries about how rising inflation and supply-chain disruptions could impact corporate earnings. Since the beginning of September, the S&P 500 index has dropped 3.8%
With stock valuations high and the market appearing to have run out of mojo, at least for now, we asked several advisors what they’re telling clients. How are they framing the situation? What are they suggesting in terms of portfolio moves?
Stock Market Correction: 5 ETF Plays for a Volatile Bear Market
Kari McMahon – Business Insider
After a year of flows mostly leaving AdvisorShares’ hedging exchange-traded funds while the
raged on, the tide is turning.
In the last three months, $4.5 million has flowed into AdvisorShares’ $29 million Dorsey Wright Short (DWSH) ETF, according to etfdb.com. Over the last 12 months, the fund has seen outflows of $37.5 million.
Schaeffer’s Investment Research Review: Using Options to Profit During Earnings Season
Caroline Hunter, Web Presence, LLC
Schaeffer’s Investment Research Review explains how you can use options for profit during the earnings season.
According to Schaeffer’s Investment Research Review, investors can take advantage of the earnings season through options. One way of leveraging the earning seasons via options is applying a long strangle options strategy. The investor simultaneously considers bearish options trade in a long strangle strategy and a bullish options trade. Investopedia says, ” the investor simultaneously buys an out-of-the-money call and an out-of-the-money put option.”
A Beacon of Hope for those in Need: OCC Sits Down with Edu-Futuro’s Jorge E. Figueredo
OCC seeks to support organizations who help people at risk through employee participation and financial donations. Since 2019, OCC has supported Edu-Futuro in their mission to empower immigrant and underserved youth and families through mentorship, education, leadership development and parent engagement.
OCC recently spoke with Edu-Futuro’s Executive Director, Jorge E. Figueredo, to hear firsthand how the organization is helping immigrant and Latino families succeed and learn how the organization has had to adapt to confront the challenges associated with Covid-19.