JLN Options: Russell Posts Preliminary Lists of Global / U.S. Index Additions as Part of Annual Reconstitution Process

Jun 11, 2012

Lead Stories

Russell Posts Preliminary Lists of Global / U.S. Index Additions as Part of Annual Reconstitution Process
Press Release
Russell Investments has posted its official lists of companies set to join or leave the U.S. broad-market Russell 3000® Index and Russell Microcap® Index when its industry-leading institutional U.S. equity indexes are fully reconstituted on June 22. These lists of U.S. companies—and lists of additions and deletions for the Russell Global Index—are available at the Russell reconstitution website.
Key measures of market size are lower this year due to market performance over the past year. The combined capitalization of stocks in the Russell 3000, which reflects about 98% of the investable U.S. equity universe, will decrease from $16.7 trillion at May 31, 2011 to $15.8 trillion as of May 31, 2012. Similarly, the median market capitalization will decrease from $1.04 billion to $910 million.
http://jlne.ws/LO4IrL

Beware the Stocks Behind the Exchanges
NYSE Euronext, NASDAQ OMX face problems beyond their control
 James Brumley, InvestorPlace
If you’re licking your chops over the dirt-cheap valuations of stock exchange names like NASDAQ OMX Group (NASDAQ:NDAQ) or NYSE Euronext (NYSE:NYX), you might want to keep your powder dry for a while. Why? Because an uber-cheap stock is only a bargain if the odds of future price appreciation are better than average…
To give credit where it’s due, last year’s per-share income of $17.04 was a big record-breaker for CME Group. The exchange — which focuses on new market-darling commodities like energy, metals and agricultural products — is drawing an expanding crowd of futures and options traders. Since more trading activity means more revenue and more traders means more trading activity, that’s roughly as it should be.
http://jlne.ws/N4ATbF

Oil Gains Most in Five Months on Spain Bailout, China
Lananh Nguyen and Ramsey Al-Rikabi, Bloomberg
Oil rose the most in more than five months in New York on speculation fuel demand will increase after Spain requested a European bailout to shore up its banks and China’s imports of crude climbed to a record…
Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 57,751 lots, the London-based exchange said today in its weekly Commitment of Traders report. That’s the least since Nov. 22, according to data compiled by Bloomberg.
http://jlne.ws/LmE6ke

Despite record volumes, equity markets need a policy correction (India)
Mobis Philipose, livemint.com & The Wall Street Journal
The average daily turnover of the National Stock Exchange’s (NSE) equity cash and derivatives markets in India stood at a massive Rs. 1.33 trillion in the first five months of the current calendar year. But this impressive turnover figure masks the fact that India’s equity markets lack depth, and that they are getting increasingly shallow…
About two-thirds of the above-mentioned turnover comes from trading in Nifty options contracts. Growth in options trading is a sign of a maturing market, but in India, there has been a disproportionate increase in the share of options trading, thanks to lower transaction taxes applicable in this segment. Turnover in almost all other segments of equity trading have been declining.
http://jlne.ws/Ko9eBL

OptionsMonster Volatility Sonar Report with Jamie Tyrrell of Group1 Trading:

Technology

FIX Protocol Ltd. Expands Risk Control Guidelines for Trade Messaging
Timothy Bourgaize Murray, WatersTechnology
The industry group adds recommendations for futures and options derivatives and directions on effective control for paused orders, among other guidelines.
http://jlne.ws/L0rkbd

Strategy

Predicting Volatility: The ‘Regular’ VIX Vs. The Apple VIX
Richard Bloch, Seeking Alpha
For all the worry over its every little nuanced moves, the VIX is really just a number at heart, a derivative embedded in option prices for the S&P 500 index. But some interpret it as volatility that’s actually expected in the future.
http://jlne.ws/LittLX

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