Options Traders Are So Bullish It’s Sending Warning Signals; Northern Trust’s Cherry on Options

Feb 18, 2020

Lead Stories

Options Traders Are So Bullish It’s Sending Warning Signals
Joanna Ossinger – Bloomberg
Trading in U.S. stock options has by at least one metric reached a level of bullishness not seen since the height of the dot-com boom.
Investors bought to open almost 24 million call options last week, more than ever before, Sundial Capital’s Jason Goepfert wrote in a note Saturday. At the same time, selling of calls to close dropped nearly 30% from its level a couple of weeks ago, he said, attributing that to investors’ desire not to miss out on any gains. That puts the difference between the two at a record high.

Northern Trust’s Cherry on Options
John D’Antona Jr. – Trader’s Magazine
The options market, much like its exchange-traded fund counterpart, is on fire. Single stock options drove a strong start to 2020 for the options team at Northern Trust Capital Markets, as executed volumes were up +23% year-over-year in January, according to Northern Trust Global Head of Options Jon Cherry. “Coronavirus, the U.S. impeachment trial and a handful of earnings surprises were all contributing factors to a spike in implied volatility towards the end of the month,” Cherry said. “With volatility comes opportunity for many investors, and our clients seized the moment.”

Exchanges and Clearing

Intercontinental Exchange Announces Record Open Interest in Multiple Global Energy Markets
Intercontinental Exchange, Inc., a leading operator of global exchanges and clearing houses and provider of data and listings services, announced record open interest in several of its energy markets on February 13 and 14, 2020. This included total oil, other crude and refined products, and TTF natural gas.

Derivatives Exchange Deribit Launches Daily Ether Options
Omkar Godbole – Yahoo Finance
Panama-based cryptocurrency derivatives exchange Deribit has listed daily options on ether (ETH).
The platform announced the news on Twitter on Monday. The new product will have strike price intervals of $5 and can be traded in the 24 hours preceding the expiry at 08:00 UTC every day. They will have a lifetime of two trading days at the time of introduction.
From Feb. 19, the exchange will also be reducing the tick size for all ether options from the current 0.001 ETH to 0.0005 ETH, Deribit CMO Andras Caron said.

Regulation & Enforcement

LIBOR’s death has one debt guru horrified Asia isn’t ready
Apple Lam, Rebecca Choong Wilkins and Annie Lee – Bloomberg
When Andrew Ferguson talks to financial professionals across Asia about the looming demise of LIBOR, he’s often shocked at how little they seem to know about one of the most far-reaching changes to the global financial system in decades.
“A lot of people aren’t ready,” says Ferguson, a nearly 40-year veteran of the banking industry who’s now chief executive officer of the Asia Pacific Loan Market Association.


Four Key Ways to Improve Equity Market Structure
Adam Inzirillo – Cboe blog
In January, Cboe published its vision for equity market structure reform. Our goal in drafting this report was to create a new dialogue – to shift the focus to what’s working well and what could be enhanced. Our customer-first approach means we value investor choice and we are dedicated to defining markets that are beneficial to all those who participate in them. We’ve already received great industry feedback on this document and want to keep the momentum going.

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