Observations & Insight
Short Dated Options at Nasdaq; Sean Feeney, Head of Us Options at Nasdaq, Discusses Shorted Dated Options and Time Value in This Options Discovery Full Interview
In this Options Discovery full interview, Alex Teng sits down with Sean Feeney, head of US options at Nasdaq, in the first ever in person interview in Options Discovery history. Alex and Sean discuss Sean’s career, short dated options, 0DTE options, Nasdaq’s history, and more.
Stock Market’s Fear Gauge Hits Lowest Level in 3 Years Amid New Bull Market
Matthew Fox – Markets Insider
Wall Street’s fear gauge closed at its lowest level in more than three years on Friday, suggesting that the stock market entered a new regime of low volatility following the bear market of 2022.
The decline in the VIX to below the 15 level comes as the S&P 500 continues to move higher, with the index up nearly 12% year-to-date.
Mystery Trader’s Debt-Ceiling Windfall Sparks Insider Concerns; Bullish options bet on Equitrans came days before debt deal; Firm involved in building a pipeline that was included in deal
Austin Weinstein and Geoffrey Morgan – Bloomberg
The US government’s move to greenlight a 300-mile natural gas pipeline as part of legislation to stave off a Treasury default shocked just about everyone, except for a mystery trader who somehow appears to have seen it coming. On Wall Street, analysts had mostly expected vague promises on energy permits to be included in a bill to raise the US debt ceiling. Yet, options trading suggests something bigger may have been in the offing.
Trader Made $7.5 Million on Suspiciously-Timed Debt Limit Deal Trade
Walt Hickey – Business Insider
As part of the debt ceiling deal, one surprise concession that made it into the bill was the approval of the Mountain Valley Pipeline, a 304-mile natural gas connection from northwest West Virginia to southern Virginia.
A pet project of West Virginia Sen. Joe Manchin that had been mired in Congress, the law forces action on permits that should push the project forward.
Understanding Basis Trading on Cboe Digital
Trading the basis is a well-known trading strategy requiring a spot and U.S. regulated futures market. Conveniently, Cboe Digital offers a unique solution by combining both markets into a single, innovative platform.
At its core, basis trading employs an arbitrage approach to capitalize on pricing discrepancies between the spot and futures markets of the same commodity. This difference in pricing is known as the basis.
Biden Debt-Bill Signing Set to Unleash Tsunami of US Debt Sales
Alex Harris and Christopher Condon – Bloomberg
President Joe Biden’s signature of legislation suspending the federal debt ceiling has given the Treasury Department the green light to resume net new debt issuance after months of disruption.
Ever since mid-January, when it hit the $31.4 trillion debt ceiling, the Treasury has been using special accounting measures to maintain payments on all federal obligations. There were just $33 billion of those left available as of May 31.
Bye-Bye, Bear Market
Gunjan Banerji – WSJ
Goodbye, bear market.
That’s the vibe in the stock market, at least: The S&P 500’s recent rally puts it on the cusp of a new bull market, typically measured as a 20% gain from a recent low.
Credit Crunch Will Spark ‘Rolling Blackout’ of Corporate Defaults: BofA
Jennifer Sor – Markets Insider
Tighter credit conditions will bring about a wave of corporate defaults that will roll through sectors of the economy, Bank of America said.
“A rolling blackout is the least disruptive way for credit to align to a new rates regime. As the rates shock steadily makes its way through the credit ecosystem, sectors respond at varying lags,” strategists said in a note on Monday, predicting corporate defaults would hit sectors at different times.
CME Group Reports May 2023 Monthly Market Statistics
CME Group, the world’s leading derivatives marketplace, today reported its May 2023 market statistics, showing average daily volume (ADV) increased 3% to 25 million contracts during the month, the highest May ADV in company history.
May 2023 figures at Eurex
Repo volumes doubled to nearly EUR 400 billion; Strongest growth in daily GC Pooling with volumes rising 142 percent in May y-o-y; Notional outstanding in OTC Clearing up 27 percent. Eurex, Europe’s leading derivatives exchange, reports a 9 percent decrease in total trading volume to 142.5 million contracts in May from 156.5 million contracts in the same month last year. Interest rate derivatives decreased by 8 percent year-on-year in May from 60.1 million to 55.5 million traded contracts. Index derivatives decreased by 13 percent, from 71.7 million to 62.2 million contracts traded. Equity derivatives trading remained unchanged compared to May 2022 with 24.6 million contracts.
Regulation & Enforcement
Crypto exchange Binance sued by SEC in latest blow from US regulators
Scott Chipolina and Stefania Palma – Financial Times
The US securities market watchdog has sued Binance, the world’s largest crypto exchange, accusing it of violations including mixing billions of dollars of customer cash with a separate trading firm owned by its chief executive.
The 13 civil charges filed on Monday by the Securities and Exchange Commission are the latest regulatory blow to Binance and its chief, Changpeng Zhao after another US financial agency sued it in March.
How the Tech Mania Is Rippling Through Markets
Gunjan Banerji – WSJ
Traders are betting that the recent run in technology stocks isn’t over just yet.
Here’s how the trade is trickling through markets.
Volatility And Options On The Lows
In today’s #Vol411, Tim Biggam @Delta_Desk talks about implied volatility and the price of #options getting comparatively cheaper, the put/call ratio being 2:1 today, the $VIX #futures term structure steepening slightly and more.
The 4 Biggest Mistakes Young People Make With Money
Leo Ginsburg – Business Insider
Gerd Kommer is a German investment banker, entrepreneur, and author. He is known for his critical stance towards active investment strategies. He advocates a full reliance on ETFs (Exchange Traded Funds).
Kommer has published several books, including “Investing Sovereignly with Index Funds and ETFs” – a bestseller in Germany. He advocates for a long-term, cost-effective, and risk-diversifying investment strategy based on passive index funds.