Andrew Mauck, Ernesto Pinto, Charlie Carey
Observations & Insight
Trading Technologies Announces Matching Program to Benefit GoFundMe Campaign
for MarketsWiki Education Video Series and John Lothian News
As a pioneer of electronic trading, we at Trading Technologies value our industry’s rich history. We recognize the need to preserve our legacies and lessons to broadly educate and inspire those to come. This is what John Lothian News is doing through the Open Outcry Traders History Project, The Path to Electronic Trading, The History of Financial Futures series and MarketsWiki.
JLN established a GoFundMe campaign during the pandemic to support this work. So far, it has generated $33,626 of its $300,000 goal.
To encourage broader giving, we are stepping up and announcing that we will match the next $20,000 in donations to this campaign. And we are challenging the other sponsors of JLN to launch their own matching programs.
Why support JLN?
As the saying goes, you’ll never get to where you’re going if you don’t know where you came from. This is why it’s so important to support these initiatives.
Through rich storytelling, the JLN team is working to capture the history that led us to this modern era, where anyone—from a small family farm to a global corporate conglomerate—can efficiently and effectively manage risk. They’re celebrating the game changers who catalyzed innovation and growth, sharing personal anecdotes through a series of fascinating on-camera interviews in the Open Outcry Traders History Project and The Path to Electronic Trading series. And they’re offering valuable insights and advice to students considering employment in this industry through the MarketsWiki World of Opportunity events.
JLN needs funding to continue this ambitious work. It’s critical to educate not only those who have already built careers in this industry, but also the next generation of capital markets professionals.
Our first donation to be matched is from Charlie Carey, a CME Group board member, former CME Group vice chairman and former CBOT chairman, in the amount of $1,000. Please join us in making your contribution here.
Options Traders Preparing for ‘Bounce’ in Archegos-Linked Stocks
Joanna Ossinger – Bloomberg
U.S. stock-option activity shows somebody’s betting that stocks taken down by the Archegos Capital Management saga will rally in the next few weeks.
The American depositary receipts of Vipshop Holdings Ltd. and GSX Techedu Inc. both saw bullish options activity on Tuesday as the stocks rose. Vipshop gained 5.8% to $31.50. Volume on the 30-April $35 calls was 18,633, compared with open interest of 452, while 5,607 16-April $36 calls changed hands versus open interest of 2,616.
Short Bets in $14 Billion Treasury ETF Say Yield Calm Will Break
Katherine Greifeld – Bloomberg
As Treasury yields stall near their prepandemic highs, investors are wagering that the tranquility will be short-lived.
Short interest in the $14 billion iShares 20+ Year Treasury Bond exchange-traded fund (ticker TLT) has climbed to about one-fifth of the shares outstanding, the highest since early 2017, according to data from IHS Markit Ltd. Bearish bets have risen from 7% at the start of 2021 amid the fund’s 13% year-to-date drop.
US stocks decline as investors digest volatility from Archegos meltdown
Emily Graffeo – Markets Insider
US stocks ended lower on Tuesday, with the Dow Jones Industrial Average and S&P 500 retreating from record highs reached the previous day.
New trades linked to Archegos added unease to markets after US data highlighted an economic rebound.
‘Investors are still misunderstanding the Fed,’ says this chief investment strategist
Christine Idzelis – MarketWatch
The stock market still has room to run this year despite investors’ rising concern over inflation, according to Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company.
“I think investors are still misunderstanding the Fed,” Schutte told MarketWatch in a phone interview Tuesday. “The Fed isn’t tightening anything, even if we get inflation in the coming months, until they make up all the losses and more back on the employment side.”
Months After the GameStop Saga, Retail Traders Still Haven’t Checked Out
Evie Liu – Barron’s
Housebound retail traders made a splash in late January, when a group of Reddit users pushed stocks like GameStop and AMC Entertainment through the ceiling. Their increasing participation in the market, especially via speculative options trades, has caused concern that stock trading could be more volatile.
Those market players are still highly active, even though vaccinations are helping restore a semblance of normal life, and stocks keep hitting new highs, likely leaving less space for big gains like those in 2020. Retail trading has receded from the peak seen early in the year, but mom-and-pop investors still remain way more aggressive than they have been over the past two decades.
Inside Volatility Trading: Forgetful Volatility Measures
Kevin Davitt – Cboe
April 6, 1909: Robert Peary, Matthew Henson and four Inuit believed they were the first explorers to reach the North Pole. The veracity of the claim has been contested, but there’s no doubt the group got close to 90.00° N, 135.00° W. Peary was an engineer and a military man. He had been exploring previously unknown portions of Greenland and the Artic for decades. Henson, who had accompanied Peary on several journeys, returned to say, “I think I’m the first man to sit on top of the world.”
Short-seller Carson Block discussed GameStop, SPACs, and Archegos in a recent interview. Here are the 10 best quotes.
Theron Mohamed – Markets Insider
Short-seller Carson Block argued in a recent RealVision interview that retail investors would struggle to pull off another GameStop-style short squeeze, dismissed many recent SPACs are worthless, and suggested Archegos Capital was managing a $150 billion-plus portfolio before it blew up.
The Muddy Waters boss also defended short-sellers, warned that many investors won’t be sufficiently hedged when the market crashes, and cheered day traders for making it easier to establish short positions.
Exchanges and Clearing
Cboe Global Markets Reports March 2021 Trading Volume; European Equities ADNV up 9 percent and Global FX ADNV up nearly 4 percent over February 2021; Options ADV up 18 percent and U.S. Equities – Exchange Matched ADV up nearly 20 percent year-to-date; In March, Cboe successfully launched trading in Mini-Russell 2000 Index options and U.S. Equities Early Trading Hours
Cboe Global Markets, Inc.
CHICAGO, April 6, 2021 /PRNewswire/ — Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today reported March monthly trading volume statistics across its global business lines and provided guidance for selected revenue per contract/net revenue capture metrics for the first quarter of 2021.
Position Limit and Large Trader Reporting Requirements in Connection with the Initial Listing of European Style Wednesday Weekly and Monday Weekly Options Contracts on E-mini Nasdaq-100 Index Futures
In connection with the listing of the Chicago Mercantile Exchange Inc. (“CME”) European Style Wednesday Weekly and Monday Weekly Options Contracts on E-mini Nasdaq-100 Index Futures (the “Contracts”) on trade date Monday, April 12, 2021 (see SER-8731 published on March 17, 2021), please note below and in Appendix B of CME Submission No. 21-102 the corresponding all-month position limit (Rule 559), aggregation allocations (Rule 559.D) and reportable levels (Rule 561) for the Contracts.
Regulation & Enforcement
CFTC Orders New York Man to Pay More than $1 Million for Role in Fraudulent Binary Options Scheme
The Commodity Futures Trading Commission today issued an order filing and settling charges against Glenn Olson formerly of Brooklyn, New York, for his role in a binary options fraud that harmed U.S. customers involving Blue Bit Banc, a United Kingdom company, and Blue Bit Analytics, Ltd, located in Turks and Caicos.
*****It is really heads or tails if the CFTC will ever get its money.~JJL
Regulators need to look at leverage in the prime brokerage business at the center of the Archegos meltdown, Guggenheim’s Millstein says
Will Daniel – Markets Insider
Guggenheim’s co-chairman Jim Millstein believes regulators should keep an eye on leverage in the prime brokerage business at the center of the Archegos meltdown.
In an interview with Bloomberg on Tuesday, Millstein said that the Financial Stability Oversight Council, which was formed under the Dodd-Frank Act of 2010, should “take another look at the prime brokerage business and the kinds of leverage that’s being extended both through the derivatives markets and directly.”
The GameStop Frenzy Appears to Be Over. What Investors Are Buying Instead.
Randall W. Forsyth – Barron’s
The much-vaunted stimulus-driven boom in stock trading is turning out to be something of a bust.
With the major averages steadily setting records, individual investors still appear to be pouring money into equities. But it appears they’re now investing in traditional mutual funds and exchange-traded funds. At the same time, they have slowed their previous manic buying of single stocks that sent once-obscure names such as GameStop (ticker: GME) soaring earlier in the year.
Months After the GameStop Saga, Retail Traders Still Haven’t Checked Out
Evie Liu – Barron’s
Housebound retail traders made a splash in late January, when a group of Reddit users pushed stocks like GameStop and AMC Entertainment through the ceiling. Their increasing participation in the market, especially via speculative options trades, has caused concern that stock trading could be more volatile. Those market players are still highly active, even though vaccinations are helping restore a semblance of normal life, and stocks keep hitting new highs, likely leaving less space for big gains like those in 2020. Retail trading has receded from the peak seen early in the year, but mom-and-pop investors still remain way more aggressive than they have been over the past two decades.
Fundamentals of Futures & Options (also applicable to Series 3 Exam)
For more than 30 years, IFM has consistently provided learners with a solid foundation and understanding of futures and options markets and trading including terminology, risk management, pricing, and basic trade strategies. This instructor-led virtual course includes lectures from an engaging instructor with real-world expertise and supported by class discussion, practice exercises and educational materials. The course fee includes two must-read industry books – Futures and Options and the Guide to U.S. Futures Regulation.
Date May 10, 2021 12:00 p.m. – May 14, 2021 2:00 p.m.
Location: Virtual Live. 2-hour sessions over 5 days.
Instructor: Marti Tirinnanzi
Class size registration is limited to approximately 20 participants to promote student participation and interaction.
Q1 2021 ETD Volume
This webinar will highlight the main trends in trading activity in Q1 2021 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings. The webinar also will feature two guest speakers from UBS discussing the rise of retail participation in the U.S. ETD markets.
A New Virtual Experience
The Options Industry Conference is Going Virtual in 2021. Join OCC and the options exchanges for the 39th annual Options Industry Conference, April 28-29, 2021. While the conference will be held virtually for the first time in its history, the focus will continue to be the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
DOJ enforcement priorities in commodities & derivatives markets: A discussion with DOJ leadership
April 13, 2021 • 1:00 p.m. – 2:00 p.m. ET
During this discussion, James McDonald, Sullivan & Cromwell Partner, will interview Robert Zink, U.S. Department of Justice, Acting Assistant Attorney General (and Chief of the DOJ Fraud Section from January 2019 to August 2020), regarding DOJ’s enforcement priorities in the commodities and derivatives markets and white collar area more generally.
(Podcast) OIR: Talking Risk, Volatility and Modeling Meme Stocks
Options Insider Radio Interviews
On this episode, Mark is joined by Jim Nevotti, president, Sterling Trading Tech, and Ravi Jain, director of risk & derivatives, Sterling Trading Tech.
Mark, Jim and Ravi discuss: What is Sterling Trading Tech, what a banner year it has been for risk and volatility, their real-time risk margin engine, the Sterling Crypto Widget, and much more…