Observations & Insight
Andre Buckles: MarketsWiki Education Virtual World of Opportunity 2020
Andre Buckles is the vice president of talent acquisition at the Options Clearing Corporation. He has been hiring people for more than two decades for a number of financial companies, including Northern Trust and Zurich North America. At the MarketsWiki Education virtual World of Opportunity 2020 event in June, Buckles had some tips for students looking to get hired in the financial industry. During the pandemic, concern about how to get to an office you are unfamiliar with was replaced by things like making sure you have stable access to the Internet and being transparent with the interviewer about circumstances that couldn’t be dealt with ahead of time. Buckles said that before a virtual interview, it’s important to make sure your devices – phone, laptop, etc. – are charged and have a good signal, and that you have a quiet, private space to conduct the interview. In general, he said, it’s important to connect with your interviewer during the interview by showing them why you are interested in working for their company. “You want to think about how you’re engaging with people,” he said.
Buckles also explained how the OCC has adapted its hiring process to the coronavirus pandemic, bringing in 62 people since March 17, the last day the OCC welcomed new employees in person in its offices. The pandemic brought challenges that tested Buckles’ expertise, but virtual hiring is now the norm, so we all need to be prepared for it.
Stocks Are Soaring — and the Market’s Fear Gauge Is Rising
Ben Levisohn – Barron’s
It was as if investors everywhere just threw their hands in the air, and said “all in.”
How else to explain a day when Salesforce.com (CRM) gained 26%, Facebook (FB) rose 8.2% and Netflix (NFLX) advanced 12%. Stocks of that size are not supposed to move that much. For anyone that’s doubted the tech rally, it feels like it’s time to just hang it up and go home.
Oil Market’s Wild Swings Subdued by Options Trading; Crude prices have crept up amid OPEC production cuts and bets on reduced volatility
Joe Wallace and Pat Minczeski – WSJ
When Laura and Marco barreled toward Louisiana and Texas this week, companies closed more than four-fifths of offshore oil production in the Gulf of Mexico to protect equipment and personnel. Crude-oil prices barely budged. The insouciance was symptomatic of an exceptionally subdued summer in the market.
Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
Omkar Godbole – Coindesk
Bitcoin’s options market foresees little price turbulence in the short-term, even as central bank watchers expect fireworks during a speech by the chairman of the Federal Reserve on Thursday morning. Bitcoin’s implied volatility on one-month options, a gauge of the market’s expectations for price gyrations over the four week period, fell to 52% early Thursday – the lowest level since July 25, according to data source Skew. Short-term price expectations have declined sharply from 70% to 52% over the past two weeks. Over three months, the gauge has pulled back from 80% to 68%, while the six-month line has declined from 80% to 72%.
Investors price for Fed chair to signal inflation can run higher
Karen Pierog and Ross Kerber – Reuters
Investors are awaiting a pivotal speech by U.S. Federal Reserve chair Jerome Powell on Thursday, positioning for rates to be kept lower-for-longer and inflation to potentially run higher. Powell will speak in online remarks to the Kansas City Fed’s annual economic symposium about the central bank’s framework review, an initiative to explore how monetary policy should adapt to changes in the economy.
Exchanges and Clearing
OCC Is Making a Major Transformation to Modernize Its Tech Infrastructure. Here’s Why.
Brendan Meyer – Built in Chicago
OCC’s legacy clearing technology, Encore, has been running smoothly for more than 20 years. So why then is the world’s largest equity derivatives clearing organization in the midst of a major tech transformation?
*****JJL: This is a great time to be doing this. Maybe never more important to have new and improved technology than right now.
Deribit Suffers Outage Over ‘Hardware Issues,’ May Miss Thursday’s Options Expiry
Daniel Palmer – Coindesk
The most popular cryptocurrency options exchange, Deribit, is suffering a severe service outage. According to company tweets early on Thursday, the trading platform is suffering “hardware issues” and a technician has been called to reboot its servers and (hopefully) bring services back to normal functionality. “We are not hacked and your funds are safe,” an initial tweet stated. Deribit went on to warn that it may not have its systems back online in time for today’s daily options expiry. In that case, the firm will “manually adjust the options expiry to reflect the actual market at the time of expiry.”
New statistics quantify record-high equities and derivatives volumes in H1; The World Federation of Exchanges (WFE) has released the trading statistics for equities and derivatives in the first half of 2020 confirming record volumes for both.
Annabel Smith – The Trade
Statistics published by the World Federation of Exchanges (WFE) have shown just how high trading volumes were in the first half of 2020 for equities and exchange traded derivatives (ETDs) with records set and huge upticks in comparison with the 2019 figures.
Cboe Global Markets to List New Cboe S&P 500 ESG Index Options Beginning September 21
Cboe (press release)
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced plans to list options on the S&P 500 ESG Index beginning September 21, 2020, further expanding Cboe’s suite of products tied to S&P Dow Jones Indices, pending regulatory review.
MIAX Exchange Group – Options Markets – Corporate Action Alert: Select Direxion Daily Bear 3x ETFs
Direxion Daily S&P Biotech Bear 3X Shares (LABD) and Direxion Daily Semiconductor Bear 3X Shares (SOXS) have announced reverse stock splits effective for Friday, August 28, 2020. On that date, the current LABD and SOXS option classes will change to LABD1 and SOXS1. The MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange will not list LABD1 or SOXS1 options. Therefore, no options on LABD or SOXS will be available for trading on Friday, August 28, 2020.
Futures and options on EURO STOXX and STOXX Europe 600 Sector Indexes: Introduction of further derivatives following the introduction of new ICB supersectors
The Management Board of Eurex Deutschland took the following decisions:
Position Limit and Large Trader Reporting Requirements in Connection with the Initial Listing of Six (6) Options on Micro E-Mini Standard and Poor’s 500 Stock Price Index Futures and Six (6) Options on Micro E-Mini Nasdaq-100 Index Futures Contracts
In connection with the listing of the Chicago Mercantile Exchange Inc. (“CME”) Six (6) Options on Micro E-Mini Standard and Poor’s 500 Stock Price Index Futures and Six (6) Options on Micro E-Mini Nasdaq-100 Index Futures Contracts on trade date Monday, August 31, 2020 (see SER-8587 published July 14, 2020), please note below and in Appendix C of CME Submission No. 20-295 the corresponding all-month position limit (Rule 559), aggregation allocations (Rule 559.D) and reportable levels (Rule 561) for the Contracts.
Product Modification Summary: Amendments to the Exercise Price Rule of the Options on Three-Month Eurodollar and Three-Month SOFR Futures Contracts – Effective: September 14, 2020
Effective Sunday, September 13, 2020, for trade date Monday, September 14, the Chicago Mercantile Exchange, Inc. (CME or Exchange) will amend the strike listings for Options on Three-Month Eurodollar Futures and Options on Three-Month SOFR Futures, as defined below, on CME Globex, the CME Trading Floor and for submission for clearing on CME ClearPort.
UTP Vendor Alert #2020 – 10 U.S. Market Holiday: Labor Day
The UTP Plan participants and U.S. equities and options markets will be closed on Monday, September 7, 2020, in observance of the Labor Day holiday.
The Bermuda Stock Exchange and Parent Company Miami International Holdings, Inc. Announce $1.35 Billion Debt Listing for the Government of Bermuda
Miami International Holdings, Inc. (press release)
Miami International Holdings, Inc. (MIH), the majority stockholder of the Bermuda Stock Exchange (BSX) and parent holding company of the MIAX Exchange Group, today announced that the BSX has listed Senior Notes totaling principal amount of US$1.35 billion for the Government of Bermuda.
Rare Volatility Jump Flashes Warning for U.S. Stock Rally
Joanna Ossinger – Bloomberg
Fear gauges for the S&P 500 and Nasdaq 100 indexes may be providing fresh reasons for caution about the rally in U.S. stocks.
The S&P 500 and Nasdaq 100 scaled new peaks Wednesday, but their respective measures of implied volatility also rose in tandem. Simultaneous increases in equity and volatility gauges are unusual, and a reason for concern for some.
Nasdaq Volatility Isn’t Necessarily a Warning Sign for Equities, UBS’s Mark Haefele Says: Video
Mark Haefele, global chief investment officer at UBS Wealth Management, comments on Nasdaq volatility and what he sees as the main factors influencing equity markets. He speaks on “Bloomberg Surveillance.”
The biggest problem in the stock market: Bullishness is clouding investors’ thinking
Michael Brush – MarketWatch
Attention, investors: It’s time for caution in the stock market.
Five big challenges have cropped up in the past two weeks. They’re telling us the market will struggle to move higher, and it may even drop sharply in the seasonally volatile months of September and October.
Below, I’ll give you an easy five-point plan for positioning your stock portfolio to help you navigate this new market environment, and get prepared mentally.
Openmarkets Weekly: Options Spreading
Jack Bouroudjian – OpenMarkets
Leading up to the launch of Micro E-mini options, I’ve been reviewing the basics of options markets. In the past two episodes, I’ve focused on the terminology of options. In the video above, I take a look at spreading one option against another as a key strategy in the options marketplace. We’ll concentrate on four basic spreads: a bull spread, a bear spread, a strangle and a straddle.
We asked hundreds of millennial investors for their top long-term stock pick. Here are the top 7 most popular responses.
Ben Winck – Markets Insider
The stock market’s newer participants are betting that mega-cap growth stocks will keep notching record highs after volatility dies down and the coronavirus recession ends.
Millions of novice investors flooded the market in recent months looking to profit on stocks’ rally from March lows. The S&P 500 and Nasdaq composite now sit at record highs, leaving young investors at a fork in the road: stay safe with the market’s growth darlings or find other names for long-term bets.