JLN Options: Skittish Options Traders Pay Up for Protection

Jun 13, 2013

Lead Stories Skittish Options Traders Pay Up for Protection  
Steven M. Sears – Barron’s
VIX calls trade above asked prices amid fears of a stock plunge as the S&P 500 hovers at a key level.
http://jlne.ws/196F267 An Ideal Day for the VIX
Wall Street Sector Selector
Wednesday’s stock market swoon was based on pure fear about the demise of quantitative easing, bringing VIX the nourishment it needed.
http://jlne.ws/16jjzpC Mini Options’ Early Successes Attract Prop Shops, Divert Tech Spend
Timothy Bourgaize Murray – Waters Technology
Introduced in March, five “mini options”—or options tied to a minimum number of 10 shares, smaller than their conventional larger relatives that usually require 100—are steadily attracting proprietary trading shops behind the retail investors they were originally built for, offering the right balance of liquidity and arbitrage opportunities for cross-asset trading, if the technology can be turned around fast enough.
http://jlne.ws/16jmQ8m Myths About Options – Take 1 
Jim Bittman, Senior Instructor, The Options Institute At C.B.O.E. (via Investors Business Daily)
Options may have more myths about them than any subject related to investing and trading. These myths persist despite the industry’s existence in the U.S. for 40 years. This is the first in a series of articles that address several myths about options and try to set the record straight.
http://jlne.ws/16jsqrj Traders Pay for an Early Peek at Key Data 
Brody Mullins – Michael Rothfield, Tom McGinty and Jenny Strasburg – The Wall Street Journal
On the morning of March 15, stocks stumbled on news that a key reading of consumer confidence was unexpectedly low.
One group of investors already knew that. They got the University of Michigan’s consumer report two seconds before everyone else.
http://jlne.ws/175Z4R7 Hedge fund lobby group CEO to step down
Tommy Wilkes – Reuters
The chief executive of hedge fund lobby the Alternative Investment Management Association, Andrew Baker, will step down at the end of 2013, AIMA said on Wednesday.
http://jlne.ws/16jhwSh High-Frequency Trading Affects Few Stocks, Report Claims
Traders Magazine
A new report by Abel/Noser shows fears of high-frequency trading are overblown. Only 184 stocks out of 13,000 issues traded in May were subject to super-fast trading. The agency brokerage defines stocks subject to high-frequency trading as those that trade at least once per second.
http://jlne.ws/16jiIoM Absolute Volatility Arbitrage Plus: Amundi Asset Management
Margie Lindsay – Risk Magazine
Interview with Eric Hermitte, co-head of volatility and convertible bonds at Amundi AM, about the Absolute Volatility Arbitrage Plus fund, winner of best volatility hedge fund in the 2013 awards
http://jlne.ws/12qzNhm

Exchanges

NYSE Euronext has ETF plan approved
Chris Flood – Financial Times
US regulators have approved plans to improve the liquidity of the US exchange traded funds market.
The Securities and Exchange Commission has agreed that NYSE Euronext, the exchange operator, can allow ETF managers to pay market makers in order to encourage them to offer competitive price quotes for US listed exchange traded funds and products.
http://jlne.ws/11YNmyC Proposed EOX Exchange to Boost OTCGH Data, Curves
Max Bowie – Waters Technology
Energy and commodities interdealer broker OTC Global Holdings plans to deliver more comprehensive commodities datasets and analytics as a result of creating a new commodities exchange, having filed an application with the Commodity Futures Trading Commission to create the new exchange last week.
http://jlne.ws/16jlXwq LSE names Isda chairman as non-exec
Philip Stafford – FT.com
The London Stock Exchange has appointed two non-executive directors as it continues to refresh its board. Stephen O’Connor, the new chairman of the International Swaps and Derivatives Association, and Stuart Lewis, head of risk at Deutsche Bank, join with immediate effect.
http://jlne.ws/140gwAn

Regulation

CFTC’s Chilton blasts exchanges on block thresholds
Alexander Osipovich – Risk Magazine
Commissioner says lowering futures block trade thresholds skirts the intent of Dodd-Frank.
http://jlne.ws/11izlwM CFTC’s O’Malia fights for more time on swap rules, Chilton takes different tack
Automated Trader
Commissioner Scott O’Malia of the Commodity Futures Trading Commission (CFTC) said he would keep pressing for more time to work out the final shape of cross-border swap rules and he outlined some of the elements he believed needed to be in the guidance, whenever it came.
http://jlne.ws/16jiWwj U.S. swaps regulator faces leadership shake-up
Douwe Miedema – Reuters
The top U.S. derivatives regulatory agency is facing a leadership shake-up just as it deals with some of the thorniest issues in its overhaul of rules for Wall Street, lobbyists and people inside the agency say.
http://jlne.ws/16jjhz5 Giancarlo Said to Be Vetted for Republican CFTC Commissioner Job
Silla Brush and Robert Schmidt – Bloomberg
J. Christopher Giancarlo, executive vice president at interdealer broker GFI Group Inc. (GFIG), is the top candidate for a Republican appointment this year to the U.S. Commodity Futures Trading Commission, according to three people briefed on the matter.
http://jlne.ws/140gx7y

Strategy

Currency Questions and Answers
Sam Evans, The Options Insider
Dear Sam. I know that you have mentioned and talked about the different ways to trade Currency and I am very interested in getting into FX Options but I am not sure where to begin. Can you shed some light on this for me as I am very new to Options on FX? I appreciate the help, Marcus A.
http://jlne.ws/16jtds8 Risk and the Currency Carry Trade
Bill Luby – MoneyShow.com
Anyone who has been active in the financial markets during the past five years knows that there are many types of risk, many ways to think about and measure risk, and invariably some risks lurking around the next corner that many of us have never bothered to contemplate.
http://jlne.ws/16jrXoU

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