Pandemic Exercises Helped OCC Manage Record Trading Volumes
Agam Shah – WSJ
Options Clearing Corp. saw record-breaking trading volume in March as concern over the coronavirus hit markets. But the OCC, which serves as a guarantor for derivatives, was prepared, having organized a companywide exercise in pandemic preparation last November.
The exercise focused on business continuity planning and preparedness training as well as reviews of information technology systems, including bandwidth to handle a surge in connections from home workers.
Goldman Sachs’ top equity strategist worries markets have rallied ‘too far too fast,’ and is predicting a fresh plunge
Saloni Sardana – Markets Insider
Markets have recovered some of the losses seen since coronavirus fears spooked investors, but Goldman Sachs’ chief global equity strategist thinks these gains have been premature and that stocks will drop again before they can stage a true recovery.
“This rally in equity markets is probably too far too fast, and there are probably still downside risks from here,” Peter Oppenheimer, Goldman’s number one stock strategist, said on a call Thursday. Markets Insider has heard a recording of the comments.
Morgan Stanley CEO: Coronavirus global recession to last through 2021
Carmen Reinicke – Business Insider
A coronavirus-induced recession could last through 2021, according to Morgan Stanley CEO James Gorman.
“I think, you know, through the end of next year we’re going to be working through this global recession,” Gorman told CNBC in a Thursday interview.
Going Hyperbolic: Fed Battles Volatility, Everything Else…
This one has a long fuse, but you might enjoy the customary overallocation of pictures as we get into it: In a March 22nd note entitled “The Great Leverage Unwind” published by Guggenheim Investments, Global CIO Scott Minerd estimates the impact of the COVID-19 pandemic like this: “…we would need to see about $4.5 trillion of quantitative easing (QE) before everything was resolved.
Cboe Equities Update: April 16, 2020
Adam Inzirillo – Cboe blog
These past few weeks have challenged us all, as the pandemic puts enormous pressure on our healthcare system and continues to undermine our economy. But if the last month has shown our industry anything, it is the importance of our capital markets. We are especially appreciative to regulators and industry participants for coming together to ensure that equity markets remain open and free to continue performing all necessary functions.
Q1 global futures and options volume jumps 43.2% to record 11.41 billion contracts
Washington, DC—FIA today released data for global futures and options trading in the first quarter of 2020 that shows the total number of contracts traded on derivatives exchanges worldwide rose to 11.41 billion, an all-time quarterly record and an increase of 43.2% over the first quarter of 2019.
Bitcoin Options Trading Hits One-Month High as Price Turns Bullish
Omkar Godbole – Coindesk
Activity in the bitcoin options market picked up pace on Thursday, as bitcoin’s price jumped above $7,000 and opened the doors for stronger gains ahead of the next month’s reward halving. Daily trading volume in bitcoin options listed on major exchanges – Deribit, LedgerX, Bakkt, OKEx, and CME – rose to $86.4 million on Thursday, the highest since March 16, according to data provided by crypto derivatives research firm Skew.
Exchanges and Clearing
Euroclear puts listing option, dividend on ice due to market volatility
Huw Jones – Reuters
Brussels based European stock and bond settlement house Euroclear is halting efforts to float or find other ways for small shareholders to sell stakes and is suspending the payment of dividends, it said on Friday.
Euroclear, which settles securities for exchanges like Euronext and London Stock Exchange, said in its first quarter trading update that approval for the dividends it had already set out have been postponed until the fourth quarter following recent guidance for financial institutions from the European Central Bank.
Regulation & Enforcement
ECB cuts banks’ market risk-related capital requirements
Balazs Koranyi – Reuters
The European Central Bank will temporarily lower commercial banks’ capital requirement related to market risk so they can keep functioning during the current coronavirus-related volatility, the ECB said on Thursday.
Locked-down investors aim algorithms at chaotic currency markets
Tommy Wilkes and Saikat Chatterjee – Reuters
A new breed of trading algorithms has deftly navigated the turbulence in currency markets caused by the coronavirus pandemic, driving up demand for robots and potentially reshaping the world of foreign-exchange dealing beyond the crisis.
Want To Buy Stocks Now? Don’t Wade In, Dive.
Sarah Max – Barron’s
Maybe you’ve been waiting to make your IRA contributions, just got a windfall (or a big severance package), or have been hoarding cash in anticipation of a market selloff. The question now is: Do you plug your nose and jump in feet first, or wade your way into the murky water? The answer depends on market volatility—and how nervous a swimmer you are.
How to Play Coronavirus Bear Market? Exactly Like the Bull Market
James Mackintosh – WSJ
A standard recession doesn’t just upend the economy. It cleans out the excesses in markets, turning winners into losers and, sometimes, losers into winners.
This time is different so far. Rather than breaking the habits investors fell into during the bull market, the coronavirus crisis and economic shutdown have reinforced two of the biggest trends in stocks: U.S. technology and “quality” stocks, those with a steady earnings record, continue to beat the market.
Ray Dalio, Adam Levinson, and other hedge fund bosses posted record losses in an ‘epically turbulent’ March
Theron Mohamed – Markets Insider
Ray Dalio, Adam Levinson, and other hedge fund bosses posted record losses in March as the novel coronavirus pandemic tore through markets in what one fund manager called an “epically turbulent” month.
Around 75% of hedge funds stomached losses last month, including nine in 10 credit funds, according to a Bloomberg analysis of preliminary data. Equity hedge funds delivered their second-worst performance in at least three decades, Bloomberg reported, citing Hedge Fund Research data.