Options Can Reduce Risk (No Matter What Larry Fink Suggests): Najarian
Jeff Macke, Yahoo Finance
On Wednesday morning BlackRock (BLK) chairman and CEO Larry Fink took an indirect swipe at the options industry…
Perhaps not surprisingly Jon Najarian, co-founder of OptionMonster, takes vigorous offense to the sweeping generalization and suggests Fink check his homework.
** Both gentlemen offer a valid point of view. Yes; when used properly, options are a prudent risk management tool, income generator and insurance vehicle. But in the hands of a non-sophisticated investor, options trading can be a dangerous (and expensive) endeavor. Some of the charlatans hawking premium-selling programs tend to downplay the risks and, in a low-volatility environment such as we are experiencing today, transaction costs can substantially erode profitability. -DA The European FTT Is Finished
Rebecca Healey, TABB Group
In a supposed victory for banks and trading organizations, the European Commission apparently will scale back the financial transaction tax significantly. But here are 5 reasons why the anti-FTT lobby should not relax just yet.
http://jlne.ws/11tQn9C Volatility: Big in Japan
Adam Warner, Schaeffer’s Investment Research
In our never-ending series of “Where’s the Volatility At,” I bring you, “The Nikkei.”
Well actually, our own Chris Prybal brought it to you, or at least brought it to my attention.
Anyways, it turns out the Nikkei VIX has hit highs not seen since 2008.
** I hope I am not the only one this reminds of the 1984 Alphaville song Big in Japan (YouTube link). Alphaville…Alpha…hmmm. -JB Investors flee Treasury markets
Michael Mackenzie and Ralph Atkins, Financial Times
The worst month for US Treasuries in two years was on Friday capped by more investors fleeing the government bond market , concerned that an improving economy will prompt the Federal Reserve to rein in its hefty stimulus.
http://jlne.ws/18EzX4S Interest Rate Volatility and the New VXTYN Index – up 57% Since April 25th
Matt Moran, CBOE
Interest rate volatility recently has been a hot topic in the news, as the new CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (VXTYN) rose from 3.9 on April 25th to 6.6 on May 29th. On May 30th the VXTYN closed at 6.11 (up 57% since April 25th).
http://jlne.ws/11tQe6d Options Trade Sees Fed Uncertainty Trapping Financial Shares
Kaitlyn Kiernan, The Wall Street Journal
Financials have been a strong driver of the rally in stocks so far this year, but one bet in the options market sees them stalling out.
http://jlne.ws/11tPdLw VIX Sinks Despite Disappointing Economic Data
While investors welcome downbeat economic reports as a reduction of any threat to quantitative easing, stocks rose and the VIX sank.
Wall Street Sector Selector
ExchangesCME Group Sanctions Goldman Sachs and Top Wall Street Trader
Susanne Craig, Dealbook
Goldman Sachs and Glenn Hadden, one of Wall Street’s top traders, have been fined by the CME Group over a Treasury futures trade in 2008.
http://jlne.ws/11tNVQu MIAX Options Exchange Announces Temporary Transaction Fee Waiver For MIAX Market Makers, Completion of Symbol Roll Out and Performance Statistics
Press Release (MIAX)
The MIAX Options Exchange (“MIAX” or the “Exchange”), the newest U.S. equity options exchange, announced today that it will temporarily waive all transaction fees that apply to MIAX market makers for the period beginning June 3, 2013 and ending July 31, 2013. Non-market maker transaction fees and other fees including connectivity and data fees will still remain in effect during this time.
http://jlne.ws/19tVmPv (PDF) OCC Wins Gold for Best Annual Report at the PCC Golden Trumpet Awards
CHICAGO, IL–(Marketwired – May 31, 2013) – OCC announced today that its 2011 annual report won gold in the Best Annual Report category at the 2013 Golden Trumpet Awards presented by the Publicity Club of Chicago at a dinner honoring the award winners on May 30, 2013.
RegulationRBC Loses Finra Arbitration Over Lehman Stock Advice
Zeke Faux, Bloomberg
Royal Bank of Canada, the country’s largest lender, was ordered to pay more than $800,000 to a U.S. couple over their losses on investments including Lehman Brothers Holdings Inc. preferred stock.
StrategyIs Now the Time For A Bullish Collar?
Jim Bittman, The Options Institute At C.B.O.E. (via Investor’s Business Daily)
Now that many Leaderboard stocks have pulled backed to near their initial buy points, an options trader might ask, “Is there is a low-cost way to make a commitment to one of these stocks without the full risk of buying stock at the current price?” The answer is a resounding, “Yes!” An options strategy known as the bullish collar allows stock-oriented investors — for a minimal cost — to position themselves for a resumed rally in a stock if they are also willing to purchase the stock at a lower price.
http://jlne.ws/10EU9BR Modeling The VIX Futures Curve
Michaeil Nau, Seeking Alpha
Confusion between the spot VIX and VIX futures has caused portfolio pain for some, because futures products have their own quirks that investors ignore at their peril.
http://jlne.ws/11tOjyz Hedging Risk: It’s Better To Be Safe Than Sorry
Jon Haghayeghi, Seeking Alpha
This article was written to help investors protect their portfolios from market risk over the next few months. Because holders of the index are sitting on phenomenal twelve-month gains, many individuals are ready to lock in profits or hedge their portfolios.
EventsChicago Algorithmic Conference Draws FinTech Professionals
Developers of algorithmic trading software will be gathering in Chicago on Wednesday, June 12, to network and exchange ideas about the rapidly changing trading environment.
The Chicago Algorithmic Trading Conference, which is hosted by OptionsCity Software, has as its tagline “For Developers, By Developers,” signifying the emergence of trading software development as a discipline in its own right.
For agenda information and to register for the 2nd Annual Chicago Algorithmic Trading Conference on June 12th at W Chicago City Center, visit http://www.regonline.com/builder/site/Default.aspx?EventID=1210182
Top Tech Trends 2013 (in conjunction with the FIA IT Division Annual Meeting)
Join our panel for a discussion on the latest technologies that are shaping decisions being made across the financial industry. Representatives from a range of vendors will discuss topics including enterprise level social media, financial services cloud computing and microwave communications. Find out what value these technologies add to the financial industry and how they are being adopted.