Observations & Insight
The Spread: Reopened for Business
This week on The Spread, Cboe reopens its doors to resume hybrid trading, FIA’s Walt Lukken invites you to a virtual IDX, and more.
Robinhood details possible changes to options offering after suicide by customer
John McCrank, Anna Irrera – Reuters
Robinhood Markets Inc said on Thursday it may make it harder to qualify to do sophisticated options trading on its platform and will improve its user interface after one of its customers took his own life after believing he incurred a large loss using the free trading app. The company said in a blog post that it was also expanding its educational content for options trading, and was making a $250,000 donation to the American Foundation for Suicide Prevention.
Investors Are Spending Fresh Billions Hedging the Market Mania
Yakob Peterseil – Bloomberg
Whether it’s a bearish portent of a sell-off to come or prudent hedging after a fierce stock rebound, traders are bolstering their defenses against an end to this vertiginous rally. Gold and longer-maturity bonds are getting outsized inflows. Protective equity options are outdrawing speculative contracts, while volatility markets are positioning for fresh disruptions.
Robinhood increases guardrails on options trading in the wake of a customer suicide
Kate Rooney – CNBC
Robinhood is making multiple changes to its platform, including making it more difficult to access to its options offering, in the wake of a customer’s death last week. On Friday, 20-year old Alex Kearns, a Robinhood customer, died by suicide and in a note to his family, cited $730,000 losses on the trading platform. “It is not lost upon us that our company and our service have become synonymous with retail investing in America, and that this has led to millions of new investors making their first investments through Robinhood,” the CEOs say.
Short Sellers Made $2.6 Billion Off Wirecard’s Plunge, but Not Without Scars
Paul J. Davies and Juliet Chung – WSJ
Investors betting against shares in Wirecard AG, the stricken German fintech company, hit a prodigious payday this week. For some passionate critics of the company, the reward wasn’t just in money, but in vindication. Before Wirecard revealed more than $2 billion of cash was missing from its business on Thursday, investors who bet on stocks to decline had made it one of their most popular targets. That set up what may have been one of the biggest paydays for short sellers on a single stock in years.
US STOCKS-Futures climb on optimism over swift recovery
Medha Singh, Devik Jain – Reuters
U.S. stock index futures rose about 1% on Friday as investors wagered on a bounce back in post-pandemic economic activity, shrugging off the daily increase in new coronavirus infections in several states. Oil major Exxon Mobil Corp rose 1.7% in premarket trading and Chevron Corp gained 0.4% as Brent crude rose above $42 a barrel amid signs of gradual recovery in demand and oil producers’ promise to meet supply cuts.
Exchanges and Clearing
CME Group and B3 to Jointly Develop New Soybean Futures Contracts Connecting Global Participants to Brazilian Agricultural Markets
CME Group (press release)
CME Group, the world’s leading and most diverse derivatives marketplace, and B3 S.A., one of the world’s largest financial market infrastructure companies, announced an agreement to jointly develop risk management products for both Brazilian domestic and global market participants. Under the terms of the agreement, CME Group and B3 will work together to launch futures on Brazilian soybeans in Q3 2020, pending regulatory approvals.
Crypto derivatives exchange unveils options trading for Chainlink
Alexander Behrens – Decrypt
Move over Bitcoin and Ethereum, options trading is coming to altcoins. Singapore-based crypto derivatives exchange Delta announced on Friday the launch of options trading for two altcoins, Binance’s BNB and Chainlink’s LINK tokens. The move could be seen as evidence of a maturing market for cryptocurrency derivatives and an acknowledgement of the growing importance of Binance and Chainlink in the digital asset ecosystem.
‘The roads can’t handle that many cars’: Employers fear gridlock, economic toll if workers shun Metra, L over COVID-19 risks
Ryan Ori – Chicago Tribune
Downtown Chicago’s economy is unlikely to roar back from the coronavirus pandemic without the accompanying rumble of elevated trains and other public transit packed with office workers. As the city restarts its economic engine in and around the Loop, city leaders, employers and business groups face the challenge of restoring confidence in the area’s public transportation network.