OPTIONS REPORT: Industry Opposes Tax Proposal
Gregory Bresiger – Traders Magazine
Traders’ advocates say a tax proposal now in Congress is bad news for investors and would do serious harm to the options industry.
A draft proposal before the U.S. House of Representatives Committee on Ways & Means calls for taxing unrealized gains and losses on options positions, rather than waiting until any gain or loss is realized as is the current practice. It would also apply ordinary income taxes to any gain rather than capital gains taxes.
http://jlne.ws/15JS1H6 Options Investors Remain Wary as VIX Falls
Kaitlyn Kiernan – The Wall Street Journal
The Chicago Board Options Exchange’s Volatility Index is coming off its highest levels of the year, but options traders are remaining cautious as uncertainty around Federal Reserve easing efforts lingers.
http://jlne.ws/15JX3n1 VIX Drops Despite GDP Disappointment
Wall Street Sector Selector
The VIX fell by more than six percent on Wednesday despite third revision to first quarter 2013 GDP which fell to 1.8 percent annualized growth.
http://jlne.ws/12ofIXo Wall St. climbs as GDP data eases fear of Fed pullback
Alison Griswold – Reuters
Stocks rallied for a second day on Wednesday, recouping some recent losses on reduced concern that the Federal Reserve will begin to withdraw its stimulus in the near future.
http://jlne.ws/12oj2Sm ETF Short Sellers Have Close Eye on Bernanke — Maybe Too Close?
Brendan Conway – Barron’s
JPMorgan Chase derivatives strategist Marko Kolanovic sent clients some interesting data on short interest in exchange-traded funds Wednesday — data which suggests the trade against precious metals and high-yielding assets and in favor of the Federal Reserve “taper” has gotten rather crowded.
http://jlne.ws/12obgrM Fourth of July Complicates VIX Trading Ahead of Jobs Data
Kaitlyn Kiernan – The Wall Street Journal
Normally, traders might look to exit options positions ahead of a holiday and enjoy the time off. But with a key data point expected next Friday morning following the July Fourth holiday, traders who want protection from stock swings following that report are in a bind.
**Don’t rain on my parade! -JB Videocast: Will VIX stay range-bound?
http://jlne.ws/12okkNd IDBs diversify and adapt to the changing market
William Mitting – FOW
On March 19, an application to register a derivatives exchange was received by the Commodities Futures Trading Commission. Should the application be successful, GFI Group will become the third of the big five interdealer brokers to operate or have the licence to operate a derivatives exchange joining US rival BGC and London-headquartered Icap.
http://jlne.ws/12ojG2d The CBOE EFA ETF Volatility Index (VXEFA) – Gauge for Worldwide Investor Sentiment
Matt Moran – CBOE
The new CBOE EFA ETF Volatility Index (VXEFA) measures the expected volatility of the iShares MSCI EAFE Index Fund (EFA), an exchange traded product (ETP) that offers exposure to developed-market stocks in 22 countries in Europe, Australia, Asia and the Far East, as measured by the MSCI EAFE Index.
** Press Release for this below under “Exchanges”. -JB
ExchangesISE ETF Ventures Partners with BlueStar Indexes
Press Release (ISE)
The International Securities Exchange (ISE) announced today the launch of their partnership with BlueStar Indexes to develop a family of indexes and use them as the basis for exchange traded products (ETPs) and other index-linked vehicles.
http://jlne.ws/12ohurG CBOE Expands Its Global Volatility Franchise With Addition Of CBOE EFA ETF Volatility Index
Press Release (CBOE)
The Chicago Board Options Exchange, Incorporated (CBOE) today announced that it will begin disseminating values for a new volatility index benchmark — the CBOE EFA ETF Volatility Index (VXEFA) — on Monday, July 1. The VXEFA Index, the newest addition to CBOE’s suite of volatility benchmarks, expands investors’ ability to track market volatility of major geographic regions outside of the United States.
RegulationCFTC Charges MF Global Inc., MF Global Holdings Ltd., Former CEO Jon S. Corzine, and Former Employee Edith O’Brien for MF Global’s Unlawful Misuse of Nearly One Billion Dollars of Customer Funds and Related Violations
Press Release (CFTC)
Settlement of charges against MF Global, subject to court approval, directs payment of all funds still owed to commodity customers and imposes a $100 million penalty against the company.
** If you read the press release you see words like “unlawful” bandied about freely yet despite that no criminal charges from the DOJ. Anyone want to bet if there will be a settlement with no admission of wrongdoing? Speaking of which… -JB SEC ready to test policy of admissions of guilt
Jean Eaglesham – MartketWatch
Securities and Exchange Commission enforcement chiefs have drawn up a hit list of impending cases where officials intend to test their new policy of requiring admissions of wrongdoing when settling civil charges, according to people close to the agency.
http://jlne.ws/12ob4c2 CFTC Chair Looks to Tie up Loose Ends
Dan Collins – Dan Collins Report
The Commodity Futures Trading Commission (CFTC), which issued a flurry of no action letters yesterday related to swaps regulation, seems to be under considerable stress as swap related deadlines are approaching quickly and it is in a battle with outside regulators over its insistence their rules are applied in overseas jurisdictions and to U.S. entities operating overseas.
http://jlne.ws/12ohXKi U.S. Needs More Time on Overseas Swaps, Democratic Senators Say
Silla Brush & Cheyenne Hopkins – Bloomberg
U.S. regulators will inject risk into the derivatives market if they don’t take more time to coordinate Dodd-Frank Act rules with their overseas counterparts, six Democratic senators said.
http://jlne.ws/1ahIr54 Libor Probe Is Advanced and May Soon Yield Results, Almunia Says
Stephanie Bodoni & Angeline Benoit – Bloomberg
The European Union’s antitrust chief said a probe into rigging benchmark interest rates may bring results soon, as he warned that manipulating benchmarks from Libor to oil reference prices risk “systemic damage.”
TechnologyConnectivity Providers Pile into Equinix LD4 to Offer Access to CBOE Futures Exchange
The Chicago Board Options Exchange (CBOE) is opening the CBOE Futures Exchange (CFE) to European trading markets through exchange hosting and low-latency connectivity solutions at the Equinix LD4 co-location data centre situated to the west of London.
StrategyVolatility is back and you should welcome it.
Volatility is back in a big way. The stock and bond markets are much shakier than last year. Volatility can spook some investors into selling at the worst possible time, but smarter folks use volatility to their advantage.