Lead Stories

ProShares Announces ETF Reverse Share Split
BETHESDA, Md., Feb 27, 2012 (BUSINESS WIRE) — ProShares, the nation’s fourth most successful exchange traded fund (ETF) company,(1) announced today a reverse share split on one of its ETFs, the ProShares Ultra VIX Short-Term Futures ETF /quotes/zigman/6849139/quotes/nls/uvxy UVXY -0.52% . The reverse split will not change the value of a shareholder’s investment. UVXY is the only ETF in the United States offering magnified exposure to VIX futures.
http://jlne.ws/znGGMa

Slow Down! VIX Fund To Enact Six-Way Reverse Split
Focus on Funds – Barrons.com
By Brendan Conway
If fundamental investors ever needed a reason to be extremely careful with products tied to the CBOE Volatility Index, look no further that the 1-for-6 reverse split in one of the hottest of those products. The ProShares Ultra VIX Short-Term Futures ETF (UVXY) — which we highlighted last week (“The Fast Money’s Next Volatility Target”) as the next big thing for fast-money volatility trading — will have a 1-for-6 reverse split in a week and a half, ProShares said in a Monday release. The only ETF tied to VIX futures (the others are exchange-traded notes) has plunged on account of very benign market volatility and because of the way the index that this product tracks is constructed. It debuted above $40 on October 4. By October 14, it dipped under $20. It fetched $5.58 in Monday afternoon trading.
http://jlne.ws/zq19yf

NYSE Liffe U.S. Launches Options on Mini Gold and Mini Silver Futures Contracts

NEW YORK, Feb 27, 2012 (BUSINESS WIRE)
–Adds depth and liquidity to precious metals market
–Enhances client risk management capabilities
NYSE Liffe U.S., the U.S. futures exchange of NYSE Euronext (NYX), announced that it successfully launched options on its mini-sized gold and mini-sized silver futures contracts. These new options contracts are designed to meet growing customer demand to trade and invest in the precious metals market. The options on NYSE Liffe U.S. 33.2 oz. mini gold and 1,000 oz. mini silver futures contracts provide traders flexibility by offering multiple trading strategies, enhanced risk management capabilities and added depth and liquidity to the underlying mini gold and mini silver futures market.
http://jlne.ws/xSfNVE

GETCO Appoints New CEO
By Ivy Schmerken, Wall Street & Technology
The global market maker named Daniel Coleman as its new CEO, citing his success and leadership as the firm’s global head of equities and client services since 2010.
February 27, 2012
Global market maker GETCO today announced that Daniel Coleman has been named CEO of the automated, multi-asset trading firm, effective immediately. Coleman assumes the role of CEO after serving as the firm’s global head of equities and client services for the past two years. GETCO Co-Founders Stephen Schuler and Dan Tierney appointed Colmen to the CEO role, citing the unique combination of his business experience, leadership and stability. Schuler and Tierney will continue to serve on GETCO’s Board of Directors, with Schuler assuming the newly created role of executive director.
http://jlne.ws/xJ0SmS

February 27, 2012: Index, ETF option volumes near midday
Chris McKhann | optionmonster.com
Total option volume is a bit light with 4.6 million contracts trading so far today, while activity is mixed in the indexes and ETFs, according to optionMONSTER’s data systems. The SPDR S&P 500 Fund (SPY) trades 585,000 options, 366,000 of which are puts. The iShares Russell 2000 Fund (IWM) is next with 228,000 options as puts outpace calls by more than 2 to 1. The PowerShares QQQ Trust (QQQ) has 143,000 options traded, puts just outnumbering calls.
The S&P 500 Index (SPX) options have changed hands 124,000 times, with a put/call ratio of 3 to 1. The CBOE Volatility Index (VIX) has 80,000 options turning over, with slightly more calls. The SPDR Gold Shares Fund (GLD) has seen 84,000 options trade, more than 67,000 of which are calls.
http://jlne.ws/wHgAHd

U.S. Stock Options With Biggest Changes in Implied Volatility
By Bloomberg News – Feb 27, 2012
The following are the U.S. stock options that had the biggest percentage changes in implied volatility from the previous trading day as of 11:30 a.m. in New York. This {OSCH } search was limited to options that are more than 10 days from expiration, have trading volume of at least 200 contracts and have strike prices within 5 percent of the underlying security’s price.
http://jlne.ws/yPV9mQ

Exchanges

BSE smarts up, narrows options
BSE has done well to tweak the incentive scheme and restrict the payouts to at-the-money options and just a few in-the-money and out-of-the-money options
In The Money | Mobis Philipose | livemint.com
The BSE Ltd has played party-pooper and ended the blast trading members were having in the Sensex options market. In the preceding two weeks, average daily volumes on index options market had skyrocketed to Rs. 36,786 crore, thanks largely to a new market-making scheme BSE introduced effective 1 February. It soon became evident that much of this unusually high volume of trade wasn’t genuine, and some trading members were trying to garner a higher share of the incentive the exchange was doling out. It’s good to see that the bourse hasn’t been carried away by the artificially high volumes, and has taken remedial measures effective this Monday. As a result, volumes in the index options segment dropped drastically to Rs. 2,702 crore, or less than 8% of the average daily volume in the preceding two weeks.
http://jlne.ws/AtwbUj

INSTITUTIONS

Macro Risk Advisors Hires Bier of Nomura as Options Sales Head
Jeff Kearns, Bloomberg News
Feb. 27 (Bloomberg) — Macro Risk Advisors LLC, a firm that specializes in derivatives strategy, hired Brian Bier of Nomura Holdings Inc. as a managing director and head of equity derivatives sales and trading, a new position. Bier, 33, previously oversaw listed equity derivatives trading at Nomura in New York and before that worked in options at Bank of America Corp. and Lehman Brothers Holdings Inc., Macro Risk said in a statement. Bier starts next week and will report to Chief Executive Officer Dean Curnutt, who founded the New York-based firm in 2008, according to the statement.
http://jlne.ws/xHkOQX

Options on Futures

Oil Options Volatility Drops as Crude Falls on Europe Concerns
By Ksenia Galouchko, Bloomberg – Feb 27, 2012
Oil options volatility declined for a second day after crude fell after the Group of 20 nations rebuffed calls from euro countries to increase international lending resources, adding to concern that Europe’s debt crisis will slow the economy. Implied volatility for at-the-money options expiring in April, a measure of expected price swings in futures and a gauge of options prices, was 29.4 as of 1:30 p.m. in New York, down from 30 on Feb. 24.
http://jlne.ws/zfjR3s

Strategy

The Really, Really Leveraged Money Isn’t Worried
By Brendan Conway, Barr
ons.com
You probably don’t trade them, but they’re still worth watching: Put and call options to buy and sell the market’s two and three-times-leveraged exchange-traded funds. These derivatives, which may be the most ridiculously leveraged equity products that aren’t trading over-the-counter, should tell us a thing or two about risk-takers’ view of where the market is headed. The signal right now says something along the lines of, “Don’t worry too much about this Greece business.” At last check, major U.S. stock indexes had about halved their morning losses after better-than-expected pending home-sales data helped offset the negatives of another apparent lurch in Greece’s sovereign-debt crisis. But the market for highly leveraged options on what are already highly leveraged ETFs isn’t going beserk.
http://jlne.ws/AvZEnI
Firing Line: Using Options to Go Long Volatility
TheStreet
Commentary By Matthew Buckley,
MIAMI (Top Gun Options) — The Top Gun Options trading team has discovered an opportunity once again to get long volatility via the CBOE Volatility Index, or VIX, and potentially profit. Europe is a slow-moving train wreck with “austerity measures” certain to fail, while the U.S. stock market has made a nice run to double-digit returns in the first quarter.
http://jlne.ws/zK2WPU

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