JLN Options: Regulators, FBI crack down in an effort to curb ‘widespread’ insider trading

Feb 29, 2012

Lead Stories

Regulators, FBI crack down in an effort to curb ‘widespread’ insider trading
Wednesday, February 29, 2012
Bailey McCann, Opalesque New York: Securities regulators in the United States along with the Federal Bureau of Investigation (FBI) are cracking down on insider trading. In a report released Tuesday, the FBI outlined its efforts which include wiretapping, saying that insider trading has become ‘widespread.’ Several regulators including the Securities and Exchange Commission (SEC), Office of Compliance Inspections and Examinations (OCIE), Financial Industry Regulatory Authority (FINRA), and the Chicago Board Options Exchange (CBOE) have issued new guidance on master/sub-account arrangements which they note are often set up to escape scrutiny.
NYSE adjusts and busts erroneous options tradesThe Trade News
NYSE Euronext has told market participants it will either bust trades or adjust prices for executions involved in an erroneous trading incident on its Amex options platform on 24 February.
Around 31,000 single-lot orders across 450 underlying instruments were affected by the incident, which is believed to have originated from a market-making firm early last Friday.
Staff at the bourse now have finished adjusting or cancelling trades and are now looking more deeply into the cause of the situation, determining if further action is required.
For trades that involved two market makers, NYSE said in a memo that executions would be re-valued at a theoretical price, plus or minus US$0.15 or US$0.30, depending on stock value and whether the order was a buy or a sell. Where at least one party to an erroneous transaction was not a market maker, the trade will be busted in accordance with NYSE’s rulebook.

CBOE Launches ETF-Based Volatility Index Products
February 29th at 12:30pm by Tom Lydon, ETF Trends
The Chicago Board Options Exchange and CBOE Futures Exchange are launching ETF-based volatility index products.
The new products hitting the market include:
CBOE Brazil ETF Volatility Index Securities Futures (VXEW) debuted Feb. 21
CBOE Brazil ETF Volatility Index Options (VXEWZ) debuts March 6
U.S. Stock Options With Biggest Changes in Implied Volatility
By Bloomberg News – Feb 29, 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.

EXCHANGESNasdaq OMX Signs CEO Greifeld To New 5-Year Contract WSJ.com 
Nasdaq OMX Group Inc. (NDAQ) has agreed to extend Bob Greifeld’s tenure as chief executive of the transatlantic exchange company by five years, the company disclosed in a regulatory filing Tuesday. The new employment agreement settles lingering questions around Greifeld’s security in the top slot at Nasdaq OMX, a position he has held since 2003 but without a new contract in place since 2007. Greifeld’s position was seen as threatened by some observers last year, after he launched a high-profile attempt to take over archrival NYSE Euronext (NYX) as that exchange group planned to merge with Deutsche Boerse AG (DB1.XE, DBOEF). After U.S. antitrust authorities threatened to block Nasdaq’s effort in May, Greifeld pulled out of several public appearances. http://jlne.ws/zAqsuX

Henri Bergström appointed NASDAQ OMX Armenia Boards head February 29, 2012
PanARMENIAN.Net – Henri Bergström was registered as Chairman of Supervisory Boards of NASDAQ OMX Armenia and Central Depository of Armenia by the Decision of the CBA Chairman on February 28, 2012. Mr. Bergström holds the position of the Director of New Markets at NASDAQ OMX, leading company’s initiatives aimed at identifying and acting upon growth opportunities from Eastern Europe and Central Asia. One of the projects he led was the acquisition by NASDAQ OMX of stock exchanges and central depositories in the Baltic countries followed by their integration and creation of joint Baltic market and joint offering.

Hong Kong Exchanges and Clearing 2011 Profit Up 1%
HONG KONG—Stock-exchange operator Hong Kong Exchanges & Clearing Ltd. emerged from a volatile year for global markets with a 1% net profit rise in 2011, bolstered by a solid string of initial public offerings and a slight increase in average daily trading volume.
Hong Kong’s monopoly stock-exchange operator raised its profit slightly despite an “unusually volatile” year marked by the March earthquake in Japan and the European debt crisis, Chief Executive Charles Li said Wednesday in statement accompanying the results. Hong Kong’s benchmark Hang Seng Index fell 20% in 2011.
The blue-chip company said its net profit for the 12 months ended Dec. 31 was 5.09 billion Hong Kong dollars (US$656.4 million), up from HK$5.04 billion in 2010.
The result was in line with the average HK$5.12 billion forecast of 21 analysts in a Thomson Reuters poll.  The company, which makes money from fees and tariffs related to securities, options and derivatives trading, as well as listing fees, investment income and clearing and settlement fees, said revenue rose 4% to HK$7.86 billion from HK$7.57 billion last year.
U.S. Housing: What More Activity At Lower Prices Means For The Market (VIDEO)
Forbes U.S. home prices hit fresh post-bubble lows in December, according to the latest reading from the S&P/Case-Shiller index, but the drop muddies what is an improving picture for the housing market….
On the investing side it has always been challenging to get a pure play on the housing market. Radar Logic indexes are the basis for housing futures that are now traded on the Chicago Board Options Exchange, one of the first direct plays on housing, but traditionally the only methods were buying home builders, real estate investment trusts or derivative plays like retailers and appliance makers.


Bernanke Comments Hurt Stocks, Treasurys; But Dollar GainsWSJ.com
— Gold, oil and some other commodities also slip
— Investors disappointed as Bernanke didn’t mention QE3
— Selloff in Treasury futures also jolts sentiment
— But dollar gains as higher-yielding currencies pressured
NEW YORK (Dow Jones)–The sense that they’d lost the “Bernanke put” sent financial markets into a spin Wednesday.
Investors looking for Federal Reserve Chairman Ben Bernanke to offer signs of more monetary easing were disappointed as he refrained from mentioning any plans to move toward a third round of “quantitative easing” bond-buying, known as QE3. For some time, market commentators have referred to the notion that bullish investors believe they will be backstopped by the promise of easy money from the Fed as the “Bernanke put,” an idea taken from options trading, where a put allows a buyer to lock in prices by selling at a predetermined price in the future.


Market Data Capacity: 2011 Review and 2012 Outlook February 29
, 2012 By Jeff Wells, Low-latency.com
So, 2011 is now well behind us and we are already in the year of the Dragon. So it is high time to look back to assess the past and to look into the capacity planning crystal ball. It is impossible to know the future of course but we can learn from the careful examination of historical facts.
Fortunately, there is a vast array of data from the Financial Information Forum (FIF) provided mostly by the exchanges as well as detail from www.marketdatapeaks.com that is worth perusing….
The listed equity options markets are normally the leaders in terms of market data output. This didn’t change in 2011 and it isn’t going to change in 2012. The high volume is a result of their enormous array of products, contracts and technical prowess. For example, every time the stock market goes up or down, several hundred thousand options contracts are re-priced automatically and funneled into the OPRA system. This means that investors can be sure that the latest price is accurate.
ConvergEx Prime Services Continues Growth Into 2012
NEW YORK, Feb. 29, 2012 /PRNewswire via COMTEX/ — ConvergEx Group, a leading technology company, today announced that ConvergEx Prime Services, formerly known as NorthPoint Trading Partners, continues to build on the substantial growth experienced in 2011. With year over year growth in excess of 15% in 2011, ConvergEx Prime Services is well poised to continue to expand throughout 2012 and has increased its staffing by approximately 15% to meet those demands.


Playing the Stock Market’s Exquisite Tension
Use cheaply priced call options to take advantage of the tug-of-war in the stock market.
The equities market is increasingly defined by a tug-of-war that is proving bullish for stocks. The exquisite tension between those that have caught the rally, and those that have not, creates the proverbial wall of worry that healthy stock market’s need in order to advance. Mutual-fund flow data from the Investment Company Institute show that even Main Street investors are divided about the stock market.


Derivatives Conference at The John Marshall Law School Focuses on the Dodd-Frank Act, Regulatory Issues
The Center for International Law at The John Marshall Law School in Chicago is hosting a day-long derivatives conference April 17, 2012, that focuses on the role of derivatives as futures, options and swaps in the financial landscape and addresses how the Dodd-Frank Act is transforming the regulatory landscape.
(Press Release) February 29, 2012

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Options Newsletters

Pin It on Pinterest

Share This Story