Commentary & Insight
Justin Llewellyn-Jones of Fidessa Talks ISVs, Regulation & Technology
MarketsWiki.tv Justin Llewellyn-Jones, chief operating officer of Fidessa, thinks globally and well, acts globally too. Llewellyn-Jones spoke with JLN editor-in-chief Jim Kharouf about how Fidessa is adapting to the new global marketplace and the demand for multi-asset class platforms and networks. Watch the video »
Lead StoriesStock-Market Volatility Bets at Record Amid Fed Concern: Options
Cecile Vannucci & Nikolaj Gammeltoft, Bloomberg
Widening swings in U.S. shares have prompted options (VXX) traders to make unprecedented bets on equity volatility, pushing bullish and bearish contracts to records amid concern the Federal Reserve will curtail stimulus.
http://jlne.ws/173dbXf SEC Puts Exchanges in Sights Charging CBOE Regulatory Lapses
Sam Mamudi, Bloomberg
Exchange executives, long shielded from legal scrutiny in the U.S., have been put on notice that may be changing after federal regulators fined CBOE Holdings Inc. (CBOE) $6 million for unprecedented lapses in supervision.
http://jlne.ws/10bBMGg Exchanges need a new cop, for the sake of investors
Joe Cahill, Crain’s Chicago Business
How well would Kraft Foods police Wal-Mart’s compliance with retail trade rules? Would Boeing do a good job enforcing airline safety regulations?
We’ll never know, because companies generally don’t play beat cop to their biggest customers. Except, of course, in financial markets, where exchange operators like CBOE Holdings Inc. and CME Group Inc. are supposed to make sure customers play by the rules.
** Fox and hen house comes to mind. -JB JPY Is the New VIX
Randall W. Forsyth, Barron’s
Forget the VIX. The new fear gauge for markets is JPY. A strengthening of the exchange rate of the yen — mainly against the U.S. dollar but also against the euro — has been a warning flag for global markets from stocks to bonds to commodities lately.
http://jlne.ws/18y5SHD For the Dow, 100-Point Days Aren’t What They Used to Be
Murray Coleman, The Wall Street Journal
Officially, market volatility is at a relatively low decibel level. To most investors, a different picture is emerging.
http://jlne.ws/173dyB3 Wall St drops on worry about timing of stimulus cuts
Angela Moon, Reuters
U.S. stocks fell on Wednesday in another volatile session as investors extended a recent selloff that has been driven by the unwinding of bullish bets built on supportive policy from the world’s largest central banks.
http://jlne.ws/173alRW Have We Hit Peak HFT?
Phil Albinus, Advanced Trading
The number of shares traded via high-frequency trading are down and politicians want to roll out a tax to serve as a speed bump. Some are wondering if microsecond dealings are poised to fade away.
ExchangesNasdaq Consolidates Management of Its Stock and Options Exchanges
Nasdaq OMX Group promoted Tom Wittman, head of the exchange operator’s options markets, to run its three stock exchanges as well. Wittman has been running Nasdaq’s options marts since 2008 when Nasdaq bought the Philadelphia Stock Exchange.
http://jlne.ws/173cVYn EOX Exchange files with CFTC for contract market designation
Press Release (via Futures)
OTC Global Holdings LP (OTCGH), the leading independent interdealer broker in commodities markets, formally announced today that its subsidiary, EOX Exchange LLC, filed its application with the U.S. Commodity Futures Trading Commission (CFTC) for designation as a contract market (DCM).
A wide range of derivative products will be offered on the EOX Exchange, including futures and options in natural gas, crude oil and refined products, natural gas liquids, power and agricultural products. The EOX Exchange will leverage OTCGH’s proprietary EOXLive platform, which is well-known in the commodities sector for its ability to combine the transparency and convenience of electronic trading with the execution benefits of voice brokerage.
http://jlne.ws/10bBMWK ASX to introduce VIX futures contract
James Fernyhough, Financial Standard
The Australian Securities Exchange is planning to launch a VIX futures contract, with a launch date earmarked for later this year – possibly as early as July. The ASX will provide a media teach-in to coincide with the launch.
http://jlne.ws/13BNSoH NADEX is the one true Binary
By John J. Lothian
In last week’s story about the binary trading operation charged by the CFTC with violating the CFTC’s off-exchange options trading ban and operating as an unregistered Futures Commission Merchant, MarketsWiki sponsor NADEX received a nice temporary shout out from the CFTC and SEC I say temporary, because the language on the Consumer Alert was changed after it was issued. The release originally said: “To date, only one entity that offers binary options has been granted status as a designated contract market— the North American Derivatives Exchange, Inc. All other entities that are offering binary options that are commodity options transactions are doing so illegally.” You can see the original SEC Investor Alert here: http://jlne.ws/19mjRj8 (PDF) Now it says: “Very few firms are designated contract markets for binary options. To see the most recent list of those that are, check the National Futures Association’s Background Affiliation Status Information Center (BASIC). All other entities offering binary options that are commodity options transactions are doing so illegally.” There are other exchanges that have or do offer binary options, but while others are still stuck on 0, NADEX is the 1.
RegulationAmanda Renteria To Be Nominated CFTC Chief
Shahien Nasiripour, Huffington Post
President Barack Obama is poised to nominate Amanda Renteria, a former Senate staffer, to replace Gary Gensler atop the main U.S. derivatives regulator amid an intensifying fight between Gensler and the world’s major banks and regulators over cross-border transactions.
http://jlne.ws/11zB80m Waiting for Uniform Derivatives Rules Is a Losing Proposition
Mayra Rodríguez Valladares, American Banker
Anybody who thinks the Commodity Futures Trading Commission has been dragging its feet in the Dodd-Frank rule writing process should look at how much commissio ners’ and staff members’ time is taken up meeting with visitors.
TechnologyServer Farm Realty Unveils Its State-of-the-Art Chicago Data Center Facility
Press Release (MarketWired)
Server Farm Realty LLC (SFR), one of the nation’s most innovative data center developers, unveiled the company’s newest, state-of-the-art data center facility in Chicago. The exclusive, invitation only ribbon cutting ceremony featured a number of distinguished guests including Peerless Network’s CEO John Barnicle and Chicago’s Mayor Rahm Emanuel.
http://jlne.ws/11zCmIU Eurex Exchange completes migration to new, state-of-the-art trading architecture
Press Release (Eurex)
Eurex Exchange has been operating since Monday, 10 June, entirely on Deutsche Börse Group’s global trading architecture. The fixed-income derivatives segment, including highly liquid Euro-Bund, Euro-Bobl and Euro-Schatz futures, was the last to migrate from the previously used system…
This technology has already been successfully used since April 2011 by the International Securities Exchange (ISE), the leading U.S. options venue and Eurex Exchange’s partner exchange.
http://jlne.ws/173eEwK Social Media Sentiment Proven To Generate Alpha – Data And Analytics Firm, Knowsis, First To Demonstrate Statistical Significance Of Sentiment Data On Trading Strategies
Press Release (Mondovisione)
Knowsis is the first service provider that can prove analytics, based on listening into social media, actually works. Rigorous testing by the data and analytics firm has established that a trading strategy utilising social media sentiment data significantly outperforms one that does not. The results have been corroborated by a number of leading quantitative funds. It is the first time proof of this kind has been provided in a real trading environment.