Observations & Insight
Bill Brodsky – The Path to Electronic Trading Part 1
Former Cboe Global Markets Chairman and CEO Bill Brodsky’s career in the financial industry spanned multiple decades and took him on a path from Wall Street to LaSalle Street. In a wide-ranging, two-part interview, he gave JLN an eyewitness view of the evolution of the options business, the exchanges and trading technology.
Stock Option Volume ‘Exploded’ in 2020
Andrew Bary – Barron’s
Stock option volume took off in 2020 as individual investors piled into the market and gravitated to hot stocks like Apple, Tesla, and NIO, the Chinese electric vehicle company.
Daily volume in single-stock options averaged 17.3 million contracts during 2020, up 68% from the 10.3 million daily average for 2019. Trading picked up late in the year, with December single-stock option volume averaging a record 23.4 million contracts a day, according to data compiled by Cboe Global Markets, a leading options exchange.
Future Volatility in Stocks Will Be About Vaccines, Not a Blue Wave
Jacob Sonenshine – Barron’s
Market volatility has cooled. If it reheats, it will have far more to do with the slow pace of vaccine distribution in the U.S. than the apparent blue wave in Congress.
The Cboe Volatility Index, or VIX, is falling as much as 11% on Wednesday as many stocks—especially cyclical ones—are rising, The S&P 500 is up 1%. Falling volatility means a calmer market, or less price variance from the average price. With one Georgia Senate seat already going to Democratic candidate Raphael Warnock and the other likely to go to Democrat Jon Ossoff with 98% of the vote in, investors are now expecting heavy fiscal spending. That would spur economic activity and inflation.
Donald Trump Capitol Violence Can’t Stop S&P 500 (SPX) and DJIA Stocks Rally
Ben Bartenstein, Anchalee Worrachate and Selcuk Gokoluk – Bloomberg
An insurrection in the home of American democracy just became the latest shock that’s failed to derail the global bull market.
The armed attack on the seat of government — unprecedented in modern history — is leaving nary a dent in most assets, underscoring both conviction in reflation trades after the Georgia runoff and the privileged position of the U.S. in global finance.
Cboe Sees Record Surge for Options Volumes in 2020
Arnab Shome – Finance Magnates
Cboe Global Markets have posted the trading metrics for December for all its platforms, showing an overall positive trend across most markets. Finance Magnates have earlier reported on the FX figures of Cboe’s institutional spot exchange that saw a healthy uptick year-over-year on the trading volumes. The company has reported a similar trend for almost all of its markets, except for futures contracts. Considering the options volume first, over 234 million contracts changed hands last month, a year-on-year increase of 55.3 percent on the total volumes and 48.3 percent on the average daily volumes (ADV).
Exchanges and Clearing
JP Morgan and Deutsche Bank clear first non-deliverable FX options on LCH ForexClear; The two investment banks were the first to clear the non-deliverable foreign exchange (FX) options that launched today extending the offering at LCH ForexClear.
Annabel Smith – The Trade
Investment banks JP Morgan and Deutsche Bank have become the first members to clear the freshly launched non-deliverable FX options at LCH ForexClear.
Nasdaq Led all Exchanges in 2020 Equity Options Trading; Nasdaq-listed companies fuel investor demand for options trading
Nasdaq (Nasdaq: NDAQ) announced today that 2020 was the first year it led all exchanges in total volume traded for equity options across all categories, including proprietary single-exchange-listed options products. It was also the 11th consecutive year Nasdaq led all exchanges in trading of multiple-listed equity options contracts.
CME Group to Launch Six New Japanese Energy Futures Contracts on February 8
CME Group, the world’s leading and most diverse derivatives marketplace, today announced four new Japanese electricity futures contracts and two new LNG futures contracts will be available for trading on February 8, 2021, pending regulatory review. The four new electricity futures contracts expand CME Group’s already robust suite of global power futures and options and fill a gap in the Japanese electricity futures market, providing traders a robust platform for block-trade submission to CME Clearing. The two new LNG contracts provide Japanese power producers a more efficient tool to manage their price risk.
Cboe Global Markets Reports Trading Volume for December and Full Year 2020
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today reported December monthly and full-year 2020 trading volume, and provided selected revenue per contract (RPC) guidance for the fourth quarter of 2020.
The data sheet “Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report” contains an overview of certain December and full-year trading statistics and market share by business segment, volume in select index products, and RPC, which is reported on a one-month lag, across business lines.
MarketAxess Announces Monthly Volume Statistics for December 2020
MarketAxess Holdings Inc.
MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced monthly trading volume for December 2020 of $472.3 billion consisting of $203.5 billion in credit volume and $268.7 billion in rates volume.
Tradeweb Reports December Total Trading Volume of $18.2 Trillion; Average daily volume (ADV) for the month was $834.5 billion (bn), an increase of 28.0 percent (%) year over year (YoY). Average daily trades for the month totaled 50,774.
Tradeweb fully electronic trading captured a record 10.6% of U.S. High Grade TRACE and 4.5% of U.S. High Yield TRACE in December. Rates Derivatives captured record SEF market share for the month. For the fourth quarter of 2020, Tradeweb reported record ADV of $897.9bn, up 30.9% YoY, Tradeweb captured quarterly record TRACE market share in U.S. High Grade and U.S. High Yield bonds, with fully electronic representing the majority of each. Quarterly ADV records were also set in U.S. High Yield, Chinese bonds and Repurchase agreements.
Off-Exchange Trading To Continue To Grow In US
Shanny Basar – Traders Magazine
There will continue to be an increase in off-exchange equity trading volumes in the US, after record volume last year, according to Greenwich Associates’ Top 2021 Market Structure Trends report. Trade Reporting Facilities (TRFs) run by Nasdaq and NYSE capture trading off-exchange such as in alternative trading systems, internalizers, internal matching by central risk books and single-dealer platforms.
Cboe Silexx: Trading at Your Fingertips
Throughout the many challenges presented by 2020, Cboe Global Markets remained steadfast in providing superior technology solutions and client workflow optimizations to its electronic trading environment. By leveraging its mature and robust proprietary trading platform, which was acquired in 2017, Cboe Information Solutions began to transition its legacy platform into a next generation trading software and connectivity solutions provider.
Options Technology Announces Agreement to Purchase Fixnetix from DXC Technology
Options Technology, a leading provider of IT infrastructure to global capital markets firms backed by Abry Partners, today announced a definitive agreement to purchase Fixnetix, a DXC Technology Company. Financial terms of the agreement were not disclosed. The transaction is expected to close during the first half of this calendar year.
This One ETF Is the Best Way to Play Bank Stocks Now
Steven M. Sears – Barron’s
As we have often counseled, we must take things as they are and try to profit off the folly of the world.
On Wednesday, as the U.S. Senate convened to certify Joe Biden’s election as the next president, supporters of defeated President Donald Trump stormed the U.S. Capitol. The election’s certification was halted, and the nation was captivated and often horrified, by what transpired. The House of Representatives and Senate were evacuated and rioters took over the building.
2020 Annual Trends in Futures and Options Trading
Description: This webinar will highlight the main trends in trading activity in 2020 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings.
Presenter: Will Acworth, Senior Vice President of Publications, Data & Research, FIA
Time: Jan 27, 2021 10:30 AM in Eastern Time (US and Canada)