JLN Options: Option Trader Scalps Gains From Trading Glitch in Alpha Natural

Aug 3, 2012

Lead Stories

Option Trader Scalps Gains From Trading Glitch in Alpha Natural
Kaitlyn Kiernan, The Wall Street Journal
It was machines-gone-wild when Knight Capital Group sent through erroneous stock orders Wednesday, but it was a flesh-and-blood trader who jumped on it to pocket profits.
The investor took advantage of unusual price action in Alpha Natural Resources during Wednesday’s trading glitch to set up an options position that looked to be paying off Thursday.

Selloff Accelerates, Volatility Outlook Darkens A Shade
Brendan Conway, Barron’s
Worth noting: As Thursday’s stock market selloff accelerates, driving the S&P 500 down 1.2% in afternoon trading, the so-called “fear gauge,” the CBOE Volatility Index, is also down a fraction. But the exchange-traded notes tracking volatility futures are actually up on the session.

Futures and Options’ turnover plummets to 2 year low, Sensex slips 33 points (India)
The Economic Times
MUMBAI: Futures and Options’ turnover on the National Stock Exchange fell to a two-year low on Thursday partly due to scant trader participation as indices traded in a narrow range. Analysts said a holiday in some states for Raksha Bandhan also contributed to the lower trader participation.
Equity derivatives turnover on the NSE fell to Rs 55,596 crore on Thursday, the worst since July 5, 2010 when the segment clocked a turnover of Rs 35,804 crore.

VIX Is Weird (VXX)
Wall Street Sector Selector
Bad news from abroad and a solid decline for US indices made no difference to the VIX index today, which registered a 7.33% decline.  VIX ETFs fared a little better, as the NYSEARCA:VXX ETF registered a 2.32% decline.  We all know that the VIX index is typically a measure of “fear” in the marketplace and so it can only be considered peculiar on a day like today when VIX declines in synch with equities.  So why did VIX decline along with stocks with no encouraging words or actions from the ECB or Fed this week regarding fiscal stimulus?

Bristol-Myers Executive Is Accused of Insider Trading
William Alden, Dealbook
 Federal prosecutors have charged a Bristol-Myers Squibb executive with insider trading, saying he had profited from confidential information about pending deals by the pharmaceutical company.
Robert D. Ramnarine, the executive, was accused of buying call options in ZymoGenetics, Pharmasset and Amylin Pharmaceuticals before the companies were acquired by Bristol-Myers Squibb.

OptionMonster Daily Volatility Report with Jamie Tyrrell of Group1 Trading:


NYSE Euronext Announces Second Quarter 2012 Financial Results
Press Release
NYSE Euronext (NYX) today reported net income of $125 million, or $0.49 per diluted share, for the second quarter of 2012, compared to net income of $154 million, or $0.59 per diluted share, for the second quarter of 2011. Results for the second quarter of 2012 and 2011 include $12 million and $18 million, respectively, of pre-tax merger expenses and exit costs. Second quarter 2012 results also include a net $2 million loss from disposal activities related to the previously announced wind down of NYSE Blue. Excluding merger expenses, exit costs, disposal activities and discrete tax items, net income in the second quarter of 2012 was $128 million, or $0.51 per diluted share, compared to $160 million, or $0.61 per diluted share, in the second quarter of 2011.

TMX Group – Consolidated Trading Statistics July 2012
Press Release
TMX Group Inc. today announced July 2012 trading statistics for its diversified group of exchanges – Toronto Stock Exchange, TSX Venture Exchange, Montreal Exchange (MX) and Natural Gas Exchange (NGX), as well as TMX Select, TMX Group’s alternative trading system.
Volume on Toronto Stock Exchange fell 17% in July 2012 from June 2012, and was down 11% from July 2011. Volume on TSX Venture Exchange was down 8% compared to June 2012, and was down 34% from July 2011.
Volume on MX in July 2012 was down 12% from June 2012, and was down 4% compared to July 2011. Open interest at the end of July 2012 was up 4% from the end of June 2012, and was up 14% compared to the end of July 2011.
NGX experienced an 18% decrease in trading volume in July 2012 compared to June 2012, and was also down 18% compared to the same month a year earlier.

Eurex ADV is 8.1 million contracts in July
In July 2012 the international derivatives markets of Eurex Group recorded an average daily volume of 8.1 million contracts, down from 10.1 million in July 2011.
Of those, 5.8 million were Eurex Exchange contracts (July 2011: 7.2 million), and 2.3 million contracts (July 2011: 2.9 million) were traded at the US-based International Securities Exchange (ISE).
In total, 127.6 million contracts were traded at Eurex Exchange and 48.1 million at ISE.
At Eurex Exchange, the equity index derivatives segment totalled 63.8 million contracts (July 2011: 72.5 million). The single largest contract was the future on the Euro Stoxx 50 Index with 25.8 million contracts. The option on this blue chip index totalled 25.3 million contracts.

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