Snap Skeptics May Drive $1 Billion of Short Sales Within a Week
Lu Wang – Bloomberg
All the love for Snap Inc. is sure to draw out the haters.
That’s the view of S3 Partners LLC, a financial analytics firm, which says short interest in the photo-app maker is liable to reach $1 billion within a week, particularly if today’s rally continues. The contrary bet won’t be cheap, either, with the cost to borrow shares likely to start at 25 percent and rise.
Yellen Says March Hike ‘Likely Appropriate’ If Progress Persists
Federal Reserve Chair Janet Yellen said an interest-rate increase would “likely be appropriate” at the central bank’s upcoming meeting if employment and inflation continue to meet policy makers’ expectations.
VIX: The Truth About a Very Misunderstood Index
When the CBOE Volatility Index is red hot, and at a level that indicates extraordinary fear among investors, no one ever questions if it’s broken. However, the opposite is not true when VIX scratches around low levels.
Block Trade Analysis – Huge Bullish EEM Spread Trade
Russell Rhoads – CBOE Options Hub
Early Friday a huge spread trade was executed at CBOE using options on the iShares MSCI Emerging Market Index ETF (EEM). Just a few minutes into the day a trader bought 66,000 EEM Mar 38 Calls at 0.62, sold 132,000 (twice as many) EEM Mar 39 Calls for 0.18 and then took in a little more premium by selling 66,000 EEM Mar 37 Puts for 0.19. The net result was a cost of 0.07 for each short 1 37 Put, long 1 38 Call, short 2 39 Calls spreads. The payoff at expiration on March 17th shows up below.
Marijuana Helped the World’s Top Hedge Fund Gain 145%
Bei Hu – Bloomberg
Bets on marijuana companies helped an Australian manager soar 145 percent last year to become the world’s best-performing hedge fund.
Stock and credit investments in North American marijuana producers contributed to 22 percentage points of last year’s gain for the $200 million Tribeca Global Natural Resources Fund, said Sydney-based Ben Cleary, who co-manages the pool with Craig Evans. The fund has advanced 4 percent this year through February, Cleary said.
Gold books biggest one-day loss of 2017
Myra P. Saefong and Rachel Koning Beals – MarketWatch
Gold futures on Thursday suffered their biggest one-day loss of the year, finishing at a more than two-week low, after the U.S. dollar touched its highest levels since January on the back of increased suggestions from Federal Reserve officials for a near-term interest-rate hike.
Snapchat (SNAP) IPO is Here!
Peter Lusk – CBOE Options Hub
Snapchat is all about sharing who you are in the moment. The Los Angeles based “camera company” (SNAP) went public today at $17 and is now trading around $25 confirming investors like to smile for the camera.
IPO’s can generate as much excitement as a Hollywood movie premier but can sometimes disappoint too. So far today SNAP has proved to be much more than an Adam Sandler movie but over time every stock has a story to tell and SNAP will too.
Exchanges and Clearing
Nasdaq Targets Options Growth
Nasdaq, whose purchase of International Securities Exchange eight months ago increased its share in U.S. options to about 40%, is working to expand what has been a largely stagnant market over the past few years.
Total cleared contract volume was 4.17 billion contracts in 2016, a decline of 1% from 2015 and little changed from 2013 levels, according to OCC data.
London Stock Exchange ‘working hard’ on Deutsche Boerse merger
Earlier this week, the LSE said the deal could collapse as it was unlikely to get European Commission clearance.
The commission had ordered the LSE to sell its 60% stake in MTS, a fixed-income trading platform. The LSE had called the request “disproportionate”.
The LSE’s latest comments came as the exchange reported an increase in profits for 2016.
***JB: Thought they had stuck a fork in this earlier this week but it somehow keeps limping along.
Intercontinental Exchange Reports ICE & NYSE February 2017 Volumes
Press Release – ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported February 2017 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
ICE’s February average daily volume (ADV) for futures was 5.8 million contracts, a decrease of 5% compared to February 2016. ADV increased 3.5% sequentially from January 2017.
CBOE Holdings Plans Listing of Snap Inc. (SNAP) Options
Press Release – CBOE
CBOE Holdings, Inc. (NASDAQ: CBOE) today announced it plans to list options on Snap Inc. (SNAP), the parent company of the picture-taking and sharing mobile app Snapchat.
CBOE Holdings anticipates trading in options on Snap will begin on Friday, March 10, once the underlying stock has been certified as meeting all of CBOE Holdings’ applicable exchanges’ listing criteria.
The company plans to list Snap options on its four options exchanges — Chicago Board Options Exchange (CBOE), C2 Options Exchange (C2), Bats’ BZX Options and Bats’ EDGX Options.
Underlying shares of common stock of Snap Inc. began trading on the New York Stock Exchange (NYSE) today after an initial public offering on Wednesday, March 1, in which they were priced at $17 a share.
The expected Designated Primary Market Maker (DPM) for options on Snap Inc. at CBOE will be Citadel Securities LLC.
CBOE Holdings Announces Election and Proration Results Relating to its Acquisition of Bats Global Markets
Press Release – CBOE
CBOE Holdings, Inc. (NASDAQ: CBOE) today announced the results of the elections made by former stockholders of Bats Global Markets, Inc. (Bats) regarding the merger consideration to be received in CBOE Holdings’ acquisition of Bats. As previously announced, the acquisition was effective on February 28, 2017.
What if the euro imploded? Six trade ideas
John Geddie and Jemima Kelly – Reuters
Frexit, Grexit or jitters about Quitaly – existential threats to the euro are remote but investors are still looking for clever ways to protect themselves against the risk of a euro dropout.
Pricing in arcane reaches of bond markets and elsewhere shows investors are not taking chances.
Headlines have focused on France, where far-right candidate Marine Le Pen has promised to take France out of the euro zone in the event she surprises and wins the presidential election.
The S&P 500’s VIX Divergence Problem
Victor Dergunov – Seeking Alpha
Fundamental Reasons for Divergence
VIX related products are appreciating in value because traders, investors and most importantly the Smart Money are buying up option protection for the very near future. This phenomenon is certainly something that does not occur very often and clearly indicates that a growing number of traders, money managers and investing professionals are anticipating a significant increase in volatility in the near future.