JLN Options: Options traders get set for fiscal cliff, close vote

Oct 8, 2012

Lead Stories

Options traders get set for fiscal cliff, close vote
Doris Frankel, Reuters
Options traders in the U.S. stock market are getting their bets in place in case the U.S. economy tumbles down the “fiscal cliff,” or worse, if the U.S. presidential election is so close that the result is disputed.
The stock market has been relatively calm in recent weeks in the face of uncertainty over the November 6 election and concerns that the economy could be pitched into a new recession because of substantial tax rises and government spending cuts – the so-called fiscal cliff – due to hit early next year unless Congress agrees to cancel or delay them.

Stock indexes fall ahead of earnings
David Russell from optionMONSTER (via NASDAQ)
Stocks are falling this morning as the S&P 500 consolidates near long-term highs and investors brace for a negative earnings season.
S&P 500 futures are lower by about 0.4 percent. That’s less than the losses of about 1 percent in Europe, where finance ministers are meeting to discuss Spain’s debt problems. Asian markets declined by a smaller amount in the overnight session after U.S. stocks failed to hold early gains on Friday. Commodities are also lower.

Hedge Funds End Rout as Prices Reach Two-Month Low: Commodities
Joe Richter, Bloomberg
Hedge funds increased bullish bets on commodities for the first time in three weeks as prices dropped to a two-month low on signs of slowing Chinese growth and rising supplies of everything from crude oil to coffee.
Money managers raised net-long positions across 18 U.S. futures and options by 0.2 percent to 1.24 million contracts in the week ended Oct. 2, Commodity Futures Trading Commission data show. They fell 6.6 percent in the previous two weeks. Silver wagers climbed to the highest in almost two years while bullish oil bets fell to a seven-week low. Gold holdings rose for a seventh week before prices reached an 11-month high.

Trouble Not as Close as It Appears
Spencer Jakab, The Wall Street Journal
In the stock market, trouble comes when you least expect it.
With the S&P 500 up 16% year to date ahead of Tuesday’s unofficial start of earnings season, and an unusual amount of short-term political and economic uncertainty, some fear investors have become complacent. But the fact the question is being asked so frequently is, in itself, evidence they aren’t.

Record Crash Prompts Indian Exchanges to Seek New Limits
Santanu Chakraborty, BloombergBusinessweek
Indian exchanges asked the market regulator to narrow the range it allows some stocks to trade after erroneous orders caused a record plunge in the S&P CNX Nifty (NIFTY) Index, according to officials familiar with the proposal.
Price limits for 216 of the biggest and most liquid stocks should be lowered from 20 percent to 9 percent, the three officials said. The measure was proposed to the Securities & Exchange Board of India by exchange executives at a meeting in Mumbai on Oct. 6, said the people, who asked not to be identified as the talks were private.


ISE Announces Launch of Two New Wealth Indexes
Press Release
The International Securities Exchange (ISE) today announced the launch of two new indexes in collaboration with Horizon Kinetics: the Horizon Kinetics ISE Asia ex-Japan Wealth Index (Ticker: WEALTHAX), which tracks publicly-held companies that are managed by some of the wealthiest individuals in Asian countries excluding Japan; and the Horizon Kinetics ISE Global Wealth Index (Ticker: WEALTHGL), which tracks the performance of publicly-held companies that are managed by some of the wealthiest individuals in the world.

BATS Chi-X Europe Wins Four Awards Including “Best Stock Exchange / MTF” at Financial News Awards for Excellence in Trading & Technology 2012
Press Release
BATS Chi-X Europe, the largest pan-European equities exchange, has been awarded the “best stock exchange / MTF” award at the Financial News Awards for Excellence in Trading &Technology Europe, 2012.
In addition, BATS Chi-X Europe was named “best equities trading platform”, “best equities dark pool” and shared an award for “best clearing service or initiative” for its successful efforts to put in place four-way interoperable clearing with its four central clearing counterparties (CCPs): EMCF, EuroCCP, LCH.Clearnet and SIX x-clear.


Judge weighs whether to strike CFTC investment fund rule
Aruna Viswanatha, Reuters
The U.S. commodity regulator went to court on Friday to try to fend off an industry challenge to its rule requiring that certain investment funds register with the agency.
The hearing came just one week after the regulator saw another one of its rules tossed out.


To Regulate Rapid Traders, S.E.C. Turns to One of Them
Nathaniel Popper and Ben Protess, The New york Times
As billions of shares course through the stock market each day, investors rely on the government to keep up with Wall Street’s rapid-fire traders.
But in an acknowledgment that the Securities and Exchange Commission has fallen behind the firms it regulates, the agency is turning to one of those high-frequency traders for help.

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