Observations & Insight
Cboe Global Markets has launched its Cboe Empowers Scholars Program, part of the Cboe Empowers community engagement program announced in June. The Scholars Program will fully fund five “full-ride” scholarships to college for Black or Latinx students from the south and west sides of Chicago. To qualify for one of the scholarships, students will have to meet all of the following four criteria: 1. Self-identify as Black, African American, Hispanic or Latino; 2. Be a current high school senior at a Chicago public or private high school OR be a current college undergraduate that graduated from a Chicago public or private high school; 3. Plan to enroll as a full-time undergraduate at an accredited two or four-year school in the United States for the whole of the upcoming academic year; and 4. Have a minimum Grade Point Average of 2.3 (out of 4.0) or equivalent. The deadline to apply for the scholarship is January 31, 2022 (3pm CT). For more information, you can go here.~SR
Robinhood to Expand Options Contract Feature to More Traders
Mark Gurman and Annie Massa – Bloomberg
Options rolling allows users to extend buy-and-sell rights; Work on options tool discovered in hidden code inside beta app
Robinhood Markets Inc. is working to let more traders use a feature for its mobile app that rolls options contracts, a mechanism that allows traders to extend their options. Options are contracts providing the right to buy or sell a stock at a specific price by a future date. They can be lucrative financial instruments for brokerage firms. At Robinhood, options activity brought in about 61% of the firm’s third-quarter trading revenue. Options rolling allows a trader to close out a position and simultaneously open a new one with another date and price.
Stock Market Slows. Surging Inflation. Dismal Bonds: What Wall Street Expects in 2022
Sam Potter – Bloomberg
Get ready for less of the same.
As 2022 begins, the overriding message from almost 50 financial institutions across Wall Street and beyond is that conditions still look good, but the rip-roaring rallies powered by the reopening are history. Growth will ease. Returns will moderate. Risks abound—but so do opportunities.
For the fourth year, Bloomberg News has collated and condensed the key views from dozens of investment outlooks and presents more than 500 of them below. They can be sorted by institution, asset or theme.
As the ETF world booms, so do the risks
Robin Wigglesworth – Financial Times
In Steven Spielberg’s original Jurassic Park, the chaos theorist played by Jeff Goldblum chastises the theme park father’s folly in resurrecting dinosaurs by noting: “Your scientists were so preoccupied with whether or not they could, they didn’t stop to think if they should.” The exchange-traded fund industry should take note.
This is a heady time for the ETF world. Overall inflows last year topped $1tn for the first time. Coupled with the buoyancy of financial markets, this means that the ETF industry is on the cusp of crossing the $10tn of assets under management mark.
U.S. Natural Gas Faces Wild 2022 as Foreign Crises Exert Pull; At the dawn of 2022, exports of liquefied cargoes are eating up ever bigger chunks of American gas production
Gerson Freitas Jr, Sergio Chapa, and Natalia Kniazhevich – WSJ
U.S. natural gas is in for another wild year as the insularity that once shielded North American energy consumers from overseas turmoil disintegrates. Benchmark American gas futures climbed almost 45% in 2021 for the strongest annual performance in half a decade after a deadly freeze that crippled output was followed by summer heatwaves that lifted demand and hindered efforts to stow away supplies for winter. As 2022 dawns, traders, explorers and utility operators are facing the prospect of continued volatility amid rising competition from buyers as far away as Poland and the Netherlands who are dealing with a crisis so acute that factories have shut down and Goldman Sachs Group Inc. is warning there’s a “clear risk of running out of gas.”
AMERIBOR Term-90 futures to start trading on Cboe from late January; As the Libor era draws to a close, Cboe moves to expand its suite of futures products based on the American Interbank Offered Rate.
Anita Hawser – The Trade
The New Year will see Cboe Global Markets start trading futures based on the AMERIBOR [American Interbank Offered Rate] Term-90 interest rate benchmark, an alternative to the London Interbank Offered Rate, or Libor, which is gradually being phased out. The new futures will commence trading on Cboe’s Futures Exchange on January 24. As the planned cessation of Libor approaches, Cboe said these futures products provide an alternative for market participants to hedge their interest rate risks on loans, or execute interest-rate trading strategies.
****** One door closes (Libor), another door opens wider (Ameribor). Amazing how that works. And do you know what you need to make a good door fit just right? A good Sandor.~JJL
Cboe Futures Exchange to List AMERIBOR Term-90 Futures Beginning January 24, 2022
Cboe Press Release
CHICAGO, Dec. 23, 2021 /PRNewswire/ — Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced plans to launch futures on the AMERIBOR (American Interbank Offered Rate) Term-90 interest rate benchmark. The new futures are expected to begin trading on Cboe Futures Exchange, LLC (CFE) on business date Monday, January 24, 2022.
NYSE Options: *Reminder* Annual Penny Program Rebalancing
Effective January 3, 2022, NYSE American Options and NYSE Arca Option (“NYSE Options”, each an “Exchange”) will update the list of issues in the Permanent Penny Interval Program for Options (the “Penny Program”) pursuant to the Annual Review provided for in the Penny Program, as described below. Detailed changes to Penny Program issues can be found here.
Trading Overview in Year 2021 & December 2021; Japan Exchange Group released Trading Overview in Year 2021 & December 2021.
Cash Equity Market – In 2021, annual trading value for the TSE 1st Section (domestic common stocks) was JPY 765.0885 trillion, an all- time high, For domestic ETFs, annual trading value was JPY 62.3439 trillion, the second-highest on record, In the REIT market, annual trading value was JPY 17.0692 trillion, the second-highest on record.
Derivatives Market – In 2021, total derivatives trading volume was 333,637,832 contracts., In 2021, total derivatives trading value was JPY 2,952 trillion, Annual trading volume for the night session was 119,071,360 contracts and the ratio of the night session was 36.0 %, Mini-TOPIX Futures, DJIA Futures and Nikkei 225 Weekly Options recorded the highest trading volume., Platinum Mini Futures recorded the fourth highest trading volume., In December 2021, total derivatives trading volume was 30,639,207 contracts, In December 2021, total derivatives trading value was JPY 318 trillion.
SGX and SZSE sign MOU to link ETF markets in Singapore and China
SGX Press Release 28 Dec 2021
Singapore Exchange (SGX) and Shenzhen Stock Exchange (SZSE) have signed a Memorandum of Understanding (MOU) to establish an exchange-traded fund (ETF) link, offering investors on both exchanges with a wider range of investment options.
Under the agreement, SGX and SZSE will jointly develop and promote the ETF markets in Singapore and China through the listing of feeder ETFs, which link locally listed ETFs to ones listed on the other exchange. This allows domestic ETF issuers to tap on cross-border capital flows, and investors to access overseas-listed ETFs via domestic exchanges.
Euronext announces volumes for December 2021
Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris – 3 January 2022 – Euronext,
the leading pan-European market infrastructure, today announced trading volumes for December 2021. Monthly and historical volume tables are available at this address: https://euronext.com/investor-relations#monthly-volumes
ComEd turning former CME trading pit into power facility
Crain’s Chicago Business
The exchange operator has sold its longtime trading floor building in the Loop as it leaves most open-outcry trading activity behind.
The Loop building that housed CME Group’s historic trading floor until COVID-19 shut it down in 2020 is about to get a new use: generating more power for downtown.
Robert Birnbaum, who led New York’s two stock exchanges, dies at 94
While at the American Stock Exchange, in 1984, Birnbaum played a role in a high-profile case of insider trading.
Laurence Arnold – Bloomberg
Robert J. Birnbaum, who headed both the American Stock Exchange and the New York Stock Exchange during a 27-year career in market regulation and administration, has died. He was 94.
Regulation & Enforcement
Sebi tweaks exercise mechanism of options on commodity futures
Capital markets regulator Sebi on Monday tweaked the “exercise mechanism” of option contracts on commodity futures.
The decision has been taken based on feedback received from stock exchanges and the recommendations of Commodity Derivatives Advisory Committee of Sebi.
Options Straddles Vs. Options Strangles: What You Need to Know
Schaeffer via Nasdaq
Options straddles and options strangles are two advanced options strategies that can be used to capitalize on changes in implied volatility (IV) and stock price volatility. Options straddles and options strangles are both strategies that involve buying both a call option and a put put with the same expiration date and strike price, but with different premiums. The risk with options straddles and options strangles is limited to the premiums initially paid for the two options. If both options expire worthless, the trader keep keeps the premium as a profit.
In an Obscure Part of the Gas Market, U.K. Prices Went Negative
Stephen Stapczynski and Isis Almeida – Bloomberg
In the midst of Europe’s energy crunch, a surprising twist took hold as the New Year arrived: U.K. prompt gas prices fell below zero.
With Britain registering record-high temperatures on Jan. 1, the obscure U.K. gas price for on-the-day delivery — a balancing market used to fine-tune supply and demand — fell to as low as -2 pence a therm on Saturday and -1 pence on Sunday. Consumption was already expected to decline as businesses close for New Year’s day, but Norway kept on flowing gas, pushing prices below zero.
A Wall Street veteran trader-turned crypto expert breaks down how bitcoin and ethereum could potentially reach $80,000 and $7,500 — and shares the 6 major trends on his radar in the year ahead
Vicky Ge Huang – Markets Insider
After a blockbuster year of breakneck growth in crypto, investors are eager to see what 2022 has in store for the still-nascent industry.
Bitcoin (BTC) notched a 60% gain in 2021, trouncing major risk assets including the S&P 500, which was up 27% on the year. The largest cryptocurrency was trading at around $46,993 as of Monday morning in New York, according to CoinGecko pricing.
Looking ahead, investors and analysts remain sanguine about the continued institutional and retail adoption of crypto. But the fast-spreading Omicron variant and tightened monetary policies of global central banks have clouded the outlook for the performance of major crypto assets.