In a win for the ISE and NYSE Euronext, who had spoken out against the practice, three of the four options exchanges that offered dividend trading have seen volumes in that trade disappear, Traders Magazine reported. The three exchanges ended the practice after earlier eliminating the caps on fees for such trades — which largely eliminated the incentive to do the trades in the first place. Nasdaq OMX PHLX is the lone holdout still offering such trading.
The Chicago Board Options Exchange‘s Bill Brodsky announced he would step down as CEO of the CBOE after 16 years as its chief, having transformed the exchange from a small member-run organization into the world’s largest options exchange and a public company with a half-billion dollars in revenue. He will turn the job over to COO Edward Tilly. Brodsky is expected to become executive chairman of the board.
An investigation into insider trading at SAC Capital Advisors led to a 2010 lawsuit involving options trades in InterMune Inc., in which an investor allegedly bought InterMune options before an EU regulatory panel urged approval of the company’s drug to treat a fatal lung disease, Bloomberg reported.
Options trading in India is growing at the fastest pace in the world, according to the World Federation of Exchanges, reflecting speculation by Indian investors but also hedging by international money managers.
The VIX failed to spike despite the impending fall over the fiscal cliff. The spread between the cash VIX and the most active front month contract was about 100 basis points, whereas the spread is normally at least 200 basis points.
Hedge funds’ short positions on the VIX were “huge” at more than five standard deviations’ difference versus the average since 1005, Barron’s reported, apparently from the conviction that the acceleration of the Fed’s balance sheet is incompatible with increased volatility in the near future, according to SocGen.