SoftBank abandons its ‘Nasdaq whale’ bets; While OPEC+ Fights, Mexico Wins Over $2 Billion With Oil Hedge

Dec 2, 2020

Observations & Insight

FIA Asia-V: Asia-Pacific Exchanges Look Back and Ahead
Sarah Rudolph and Suzanne Cosgrove – John Lothian News

In the first panel at FIA’s Asia-V 2020 Expo, exchanges in the Asia-Pacific looked back at their successes during a turbulent year and ahead toward opportunities for cooperation in 2021.

During the unprecedented uncertainty of the past year, Asia-Pacific markets responded with innovation, and the exchanges are thriving, said Ian Nissen, the moderator of the panel.

Amid enormous volatility in March, widespread government actions and continuing global tensions, the exchanges remained liquid and transparent and handled rolling without issues, said Helen Lofthouse, executive general manager, derivatives and OTC markets at ASX.

To read the rest of this story, go here.

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FIA Asia-V: Adapting to the New Normal
Matt Raebel – John Lothian News

“Never let a good crisis go to waste.” This quote by Winston Churchill (or former Chicago Mayor Rahm Emmanuel, depending on who you ask) was brought up by Stella Gan, the FIA’s head of operations for the Asia-Pacific region on the first day of FIA Asia-V, as speakers from all over the derivatives industry discussed via Zoom how the industry has adapted to the “new normal” in the wake of the coronavirus pandemic.

To read the rest of this story, go here.

Lead Stories

SoftBank abandons its ‘Nasdaq whale’ bets; Japanese group will let its options on tech stocks expire after strategy questioned by investors
Kana Inagaki, Leo Lewis and Robert Smith – FT
SoftBank has decided to unwind its large US equity options trades, pulling back from a controversial strategy that has cost the group $2.7bn in derivatives losses and earned it the nickname “Nasdaq whale”.
/jlne.ws/2Jw4xuN

****JB: Also see Bloomberg’s story, SoftBank Is Winding Down Options Bets After Investor Fallout and Business Insider’s story, SoftBank will unwind the ‘Nasdaq whale’ options trades that cost the firm nearly $3 billion, report says.

While OPEC+ Fights, Mexico Wins Over $2 Billion With Oil Hedge
Nacha Cattan and Javier Blas – Bloomberg
Mexico will cash in its oil price insurance policy this year for the fourth time only in the last two decades, receiving a payout of about $2.5 billion from its 2020 sovereign oil hedge, people familiar with the transaction said.
In an ironic turn of events, Mexico is making a hedging profit just as the OPEC+ deal the Latin American country walked away from earlier this year is threatened by infighting over production levels.
/jlne.ws/37sZXpd

Derivatives a big part of suddenly popular bond ETFs
Ari I. Weinberg – Pensions & Investments
From index futures and ETF options to total return swaps, many of the largest and most liquid equity exchange-traded funds are supported by a swath of derivatives and a ready market for borrowing ETF shares. These features allow market makers to hedge risk with precision, investors to buy or sell protection, and speculators to leverage their exposures. Now, a similar ecosystem for fixed-income ETFs is rapidly emerging, thanks to a flood of assets and an overt endorsement of ETFs by their inclusion in the Federal Reserve’s Secondary Market Corporate Credit Facility.
/jlne.ws/3g1ngdO

Options Trading Is More Popular Than Ever Despite the Risks
WSJ (VIDEO)
Traders are buying and selling stock options at a record pace. WSJ explains how call and put contracts work, and why they carry hidden risks for amateur investors.
/jlne.ws/3g6B9r6

OCC November 2020 Total Volume Up 71 Percent from a Year Ago
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that November 2020 total cleared contract volume was 677,190,590 contracts, up 71 percent from November 2019. This marks the highest November ever and the second-highest month on record. Year-to-date average daily cleared contract volume through November was 29,295,206 contracts, up 48.4 percent from November 2019.
/jlne.ws/36sYkZs

Japanese Stocks Are Rocketing. Overseas Investors Are Fearful of Missing Out, Technical Analyst Says.
Steve Goldstein – Barron’s
The S&P 500 may have set its 27th record of 2020, but the U.S. isn’t the only market heating up. The Nikkei 225 enjoyed its best November in 30 years, and the benchmark Japanese index has matched its U.S. counterpart with a 13% gain in 2020, including a 62% rise from the lows of March.
/jlne.ws/3lwwLmh

Nasdaq retail rush powers intraday momentum trade
Helen Bartholomew – Risk.net
A surge of retail activity in options and exchange-traded funds linked to technology stocks is causing the Nasdaq and S&P 500 indexes to behave differently at the close, prompting investors that seek to capture intraday trading patterns to adjust their strategies. The now-predictable end-of-day rush from dealers and ETF managers looking to hedge retail flows has powered the returns of intraday momentum strategies on the Nasdaq.
/jlne.ws/3qoHsuD

Exchanges and Clearing

Cboe Global Markets to Present at the Goldman Sachs 2020 U.S. Financial Services Virtual Conference Tuesday, December 8
Cboe
Cboe Global Markets, Inc., a market operator and global trading solutions provider, announced today that Ed Tilly, Chairman, President and Chief Executive Officer, and Brian Schell, Executive Vice President, Chief Financial Officer and Treasurer, will present at the Goldman Sachs 2020 U.S. Financial Services Virtual Conference on Tuesday, December 8 at 1:40 p.m. ET.
/jlne.ws/3lxjHwP

CME Group Reports November 2020 Monthly Market Statistics
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today reported November 2020 market statistics, including average daily volume (ADV) of 19.3 million contracts during the month. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
/jlne.ws/3ogsWU1

MIAX Exchange Group – Options Markets – Delisting of Neurotrope, Inc. (NTRP)
MIAX Options
Neurotrope, Inc. (NTRP) will be de-listed from the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange effective on Thursday, December 3, 2020. All GTC orders resting on the MIAX order books in NTRP will be canceled at the close of business on Wednesday, December 2, 2020.
/jlne.ws/37ItBaj

MIAX Exchange Group – Options Markets – Corporate Action Alert: National Beverage Corporation (FIZZ)
MIAX Options
National Beverage Corporation (FIZZ) has announced a Special Cash Dividend. Associated strike price adjustments will become effective on Thursday, December 3, 2020. FIZZ options will continue to trade without interruption on the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange. All GTC orders resting on the MIAX order books in FIZZ will be canceled at the close of business on Wednesday, December 2, 2020. Additional details about the National Beverage Corporation (FIZZ) dividend are provided in the attached OCC Memos.
/jlne.ws/37rU8Z7

Options Trader Alert #2020 – 36 Nasdaq Announces Changes to the Penny Interval Program, Effective December 2, 2020
NasdaqTrader.com
Effective Wednesday, December 2, 2020, all Nasdaq options exchanges, per an industry-wide initiative will add the following issues to the Penny Interval Program:
Additional Issues:
Corsair Gaming, Inc. (CRSR)
FuboTV, Inc.(FUBO)
Nano Dimension Ltd (NNDM)
Palantir Technologies, Inc. (PLTR)
Switchback Energy Acquisition Corporation (SBE)
A complete list of Penny Program Issues, as of December 2, 2020, can be found here.
/jlne.ws/37vC3Jx

Options Trader Alert #2020 – 35 Nasdaq GEMX, MRX & PHLX Changes Minimum Quote Size Requirement
NasdaqTrader.com
Effective Wednesday, December 2, 2020, Nasdaq GEMX,LLC (GEMX), Nasdaq MRX,LLC (MRX) & Nasdaq PHLX LLC (PHLX) are changing the minimum quote size requirement in the following symbols to 1-up: ADBE, ADSK, ALLK, AMED, ANET, APD, ASML,BA,BABA, BGNE, BIO, CACC, CACI, CHE, CHTR, CMG, COUP, CRL, CSGP,CTAS, CVNA, DECK, DPZ, DXCM, EL, ENPH, EPAM, FDS, FLT, HUBB, HUBS, HUM, ICUI, IDA, INTU, KOD, LII, LIN, LRCX, LULU, MCO, MDB, MDGL, MED, MRTX, MSCI, MTCH, MTN, NKLA, NOC, NVDA, NVRO, OKTA, PAYC, PH,PODD, QDEL, RH,RNG,ROKU,ROP,SAM,SBAC, SEDG, SIVB, SNOW, SPGI, SPOT, SRPT, TECL, TFX,TMO,TTD,TWLO,UI, VEEV, W, WDFC, WIX, and ZM.
Effective Wednesday, December 2, 2020, Nasdaq PHLX LLC (PHLX) will also change the minimum quote size requirement in QS to 1-up.
/jlne.ws/3mswuSB

Product Modification Summary: Amendments to the Termination of Trading Rule of Four (4) European Natural Gas Option Contracts – Effective: December 9, 2020
CME Clearing
Effective Tuesday, December 8, 2020, for trade date Wednesday, December 9, 2020, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “the Exchange”) will amend the Termination of Trading rule of four (4) European natural gas option contracts (the “Contracts”) in the table below to align the Contracts’ last trade date (“LTD”) with current over the counter market practices.
/jlne.ws/39C4xUO

Product Modification Summary: Expansion of the Listing Schedule of Monthly Options on Euro/US Dollar and Japanese Yen/US Dollar Futures Contracts – Effective: January 11, 2021
CME Group
Effective Sunday, January 10, 2021, for trade date Monday, January 11, 2021, and pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, please be advised that the Chicago Mercantile Exchange, Inc. (“CME” or “Exchange”) will expand the listing of contract months for the products listed below on CME Globex, Open Outcry, and for submission for clearing only on CME ClearPort.
/jlne.ws/3qprrF4

Regulation & Enforcement

U.S. CFTC issues record number of enforcement actions, as fines remain largely flat
Katanga Johnson – Reuters
The U.S. derivatives regulator issued a record 113 enforcement actions for corporate wrongdoing in 2020 – the most in the agency’s history – the agency said on Tuesday, even as total monetary fines remained almost flat.
The Commodity Futures Trading Commission (CFTC) had a total of $1.32 billion in penalties, the “fourth highest total on record and the third straight year-over-year increase,” it said, although the figure is only slightly up on last year’s $1.33 billion in fines.
/jlne.ws/37ooQlU

*****JB: Isn’t $1.32 billion less than $1.33 billion from the previous year?

SR-NASDAQ-2020-084
Nasdaq
A Proposal to amend NOMs Pricing Schedule at Options 7, Section 2 and Options 7, Section 3
/jlne.ws/39ARZgk

SR-NASDAQ-2020-083
Nasdaq
A proposal to amend the rules of The Nasdaq Options Market LLC at Options 1, Section 1; Options 2, Section 5; Options 3, Sections 5, 7, 10, 15 and 23
/jlne.ws/2JDW20E

Miscellaneous

China Has a Lesson for Robinhood Traders in the U.S. A rising share of retail investors would be a good thing for Wall Street. No one knows that better than mainland traders.
Shuli Ren – Bloomberg
Covid-19 has awoken an army of retail investors. They now account for a fifth of the U.S. stock market’s volume, doubling their presence from a decade earlier. Day traders are even dabbling in exotic products, from thematic exchange-traded funds to short-dated call options on Big Tech stocks.
/jlne.ws/3odfEHO

Women outpace men in signing up to investment platforms; Companies report a rush of interest from women this year
Madison Darbyshire – FT
Women are signing up to investment platforms at faster rates than men, as investors flock to trading to take advantage of market volatility and lower prices.
/jlne.ws/33CsqrA

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