Stocks edge back to kick off earnings week as Powell says U.S. economy at ‘inflection point’; Money managers flirting with all-time record CBOT corn long

Apr 12, 2021

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Observations & Insight

OCC reports highest volumes in its history in Q1 2021; CFTC cracks down on binary options – The Spread
JohnLothianNews.com

This week on The Spread, the OCC and several major exchanges report trade volumes, the CFTC orders a Brooklyn man to pay $1 million in penalties over a binary options scheme, and more.

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Richard Sandor Makes History With Financial Futures – John Lothian News
JohnLothianNews.com

Richard Sandor is known as the “father of financial futures,” a name given to him by the Chicago Tribune and the Chicago Board of Trade for his work in helping to create 30-Year Treasury bond futures and many other financial contracts at the Chicago Board of Trade when he was their chief economist.

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Lead Stories

Stocks edge back to kick off earnings week as Powell says U.S. economy at ‘inflection point’
Mark DeCambre and Andrea Riquier – MarketWatch
U.S. stocks traded modestly lower Monday at the start of a week that will see the unofficial start of first-quarter earnings, headlined by some of the nation’s largest banks, including JPMorgan Chase & Co. and Goldman Sachs Group.
Market participants were also weighing comments from Federal Reserve Chairman Jerome Powell, who spoke during a “60 Minutes” interview that aired on Sunday.
/on.mktw.net/3mGH8pB

Money managers flirting with all-time record CBOT corn long
Karen Braun – Reuters
Speculators’ hugely bullish corn gamble that was set in motion late last year has paid off so far with recent outlooks suggesting global corn supplies could remain tight into 2022. Chicago corn futures last week hit contract highs in nearby and deferred months, further backing that thesis.
/reut.rs/3dg09fP

Fund managers sell petroleum as pandemic lingers
John Kemp – Reuters
Hedge funds have cut their position in petroleum for the second time in three weeks in response to a resurgence of coronavirus infections and the likely postponement of a resumption to airlines’ international passenger flights.
/reut.rs/3mDXM9m

Exchanges and Clearing

MIAX and Vesica Advance Strategic Partnership
Press Release
Miami International Holdings (MIH), the parent holding company of MIAX, and Vesica Technologies (Vesica), a trading analytics startup making financial data more accessible to individuals, today announced that MIH has completed a follow-on equity investment in Vesica and the finalization of their licensing agreement. The parties previously announced MIH’s initial investment and partnership in late 2020.
As part of the license agreement, Vesica’s SHIFT SearchSM (SHIFT) platform will be made available for options and equities data through the MIAX website, www.MIAXOptions.com. The first phase of SHIFT for options data is now live and accessible via the MIAX website.
/prn.to/3g8qmP1

SGX reports market statistics for March 2021
SGX
Securities market turnover and SDAV rose in March, capping robust first quarter; Derivatives perform strongly across multiple asset classes
Singapore Exchange (SGX) today released its market statistics for March 2021. Global markets were buoyed by investor optimism on the strength of the economic recovery, with Singapore’s stock market in particular ranking amongst the strongest of the global benchmarks. Total securities market turnover value on SGX increased 50% month-on-month (m-o-m) in March to S$38.7 billion, the highest since March 2020. For the January-to-March period, turnover was up 12% from the preceding quarter (q-o-q) at S$94.2 billion. Securities daily average value (SDAV) rose 24% m-o-m to S$1.7 billion, gaining 18% q-o-q to S$1.52 billion. The average securities clearing fee for the quarter was 2.68 basis points, comparable with the preceding quarter.
/bit.ly/2OGLOzj

Options Trader Alert #2021 – 23 Nasdaq PHLX Introduces Monday and Wednesday Weekly Expirations For QQQ Options
NasdaqTrader.com
Options Trader Alert #2021 – 23 Nasdaq PHLX Introduces Monday and Wednesday Weekly Expirations For QQQ Options
/bit.ly/3db2Oae

March 2021 monthly figures at Eurex
Eurex
Following on from a 20 percent year-on-year rise in February, notional outstanding volumes at Eurex grew by 21 percent in March compared to the same month last year – from 17,575 billion to 21,226 billion EUR. Average daily cleared volumes (ADV) jumped by 140 percent – from 75 billion to 181 billion EUR – with the IRS ADV showing a 96 percent rise. Year-on-year volumes fell back across other areas, largely due to the unprecedented volatility seen at the start of the pandemic in March last year. European equity index derivatives and European interest rate derivatives saw drops in volumes of 51 percent and 3 percent, respectively. However, European equity derivatives posted 7 percent growth – from 32.6 million traded contracts in March 2020 to 34.7 million this year.
/bit.ly/3s529vq

New Product Summary: Initial Listing of the USD Malaysian Crude Palm Oil Day 15th Bullet Futures USD Malaysian Crude Palm Oil Day 10th Financial Options Contracts – Effective May 03, 2021
CME Group
Initial Listing of the USD Malaysian Crude Palm Oil Day 15th Bullet Futures USD Malaysian Crude Palm Oil Day 10th Financial Options Contracts
/bit.ly/2OI7T0z

Product Modification Summary: Amendments to the Options on Black Sea Wheat Financially Settled (Platts) Futures and Options on Black Sea Corn Financially Settled (Platts) Futures Contracts to Convert from European Style to American Style Expiration
CME Group
Amendments to the Options on Black Sea Wheat Financially Settled (Platts) Futures and Options on Black Sea Corn Financially Settled (Platts) Futures Contracts to Convert from European Style to American Style Expiration.
/bit.ly/3sa3tgv

Regulation & Enforcement

FINRA Reminds Members About Options Account Approval, Supervision and Margin Requirements
FINRA
With the recent increase in the number of customers seeking to open brokerage accounts and trade options, FINRA reminds members of the requirements for determining whether to approve a customer to trade options. Regardless of whether the account is self-directed or options are being recommended, members must perform due diligence on the customer and collect information about the customer to support a determination that options trading is appropriate for the customer. In addition, FINRA reminds members that options accounts are subject to specific supervisory reviews, including, among others, reviewing the compatibility of options transactions with investment objectives and with the types of transactions for which the account was approved, and are subject to other FINRA rules that apply when opening customer accounts, including among others, customer identification requirements under anti-money laundering rules. FINRA also reminds members of the margin requirements for options transactions.
/bit.ly/3d8Ums8

US put off derivatives rules for a decade before Archegos blew up
Joe Rennison, Eric Platt, Colby Smith and Philip Stafford – Financial Times
Rules written in the aftermath of the 2008 financial crisis to limit the potential for a blow-up like Archegos Capital have still not been fully implemented, throwing a spotlight on regulators in a fiasco that has shocked Wall Street and raised questions on Capitol Hill.
Crucial parts of the 2010 Dodd-Frank Act, an 848-page law that was meant to shore up big banks and temper excessive risk taking in the derivatives market, have been delayed again and again.
/on.ft.com/3mHoDS7

Technology

How Market Data Powers Brokerages
Finance Magnates Staff
With Stephen Dorrian, Senior Director and Head of Market Data at Cboe Europe.
Why is market data important?
Exchange operators, such as Cboe Global Markets, provide fair and orderly marketplaces that bring together financial participants to create deep and liquid markets and aid price discovery.
Market data is the output of this trading activity in the form of bids, offers, and traded prices.
/bit.ly/3mHB3ct

Itiviti’s OEMS named Best Sell-Side Front Office Platform at WatersTechnology Awards 2021
Itivit
Itiviti, a leading trading technology and service provider to financial institutions worldwide, today announced that Itiviti’s order and execution management system (OEMS) was named Best Sell-Side Front Office Platform at the WatersTechnology’s Sell-Side Technology Awards 2021. Judged by a panel of industry experts from across the market, the highly valued Sell-Side Technology Awards are designed to acknowledge excellence in trading technology.
/bit.ly/3mDbycy

Moves

Millennium builds out risk management with ex-Goldman Sachs hires; Hedge fund is set on business expansion after navigating market volatility through pandemic
Laurence Fletcher – FT
Millennium Management, one of the biggest hedge fund winners from last year’s coronavirus-driven market turmoil, has further beefed up its risk management by hiring three former Goldman Sachs partners.
/on.ft.com/326y6Jd

Education

Fundamentals of Futures & Options (also applicable to Series 3 Exam)
IFM
For more than 30 years, IFM has consistently provided learners with a solid foundation and understanding of futures and options markets and trading including terminology, risk management, pricing, and basic trade strategies. This instructor-led virtual course includes lectures from an engaging instructor with real-world expertise and supported by class discussion, practice exercises and educational materials. The course fee includes two must-read industry books – Futures and Options and the Guide to U.S. Futures Regulation.
Date May 10, 2021 12:00 p.m. – May 14, 2021 2:00 p.m.
Location: Virtual Live. 2-hour sessions over 5 days.
Early-bird $495
Fee $595
Instructor: Marti Tirinnanzi
Class size registration is limited to approximately 20 participants to promote student participation and interaction.
/bit.ly/3fcGe2D

Events

Q1 2021 ETD Volume
FIA
May 5, 2021; 10:00 a.m. to 11 a.m. ET
The webinar will highlight the main trends in trading activity in Q1 2021 in the global exchange-traded derivatives markets, with category and regional breakdowns as well as exchange and contract rankings. The webinar also will feature two guest speakers from UBS discussing the rise of retail participation in the U.S. ETD markets.
/bit.ly/3msVZEj

A New Virtual Experience
OIC
The Options Industry Conference is Going Virtual in 2021. Join OCC and the options exchanges for the 39th annual Options Industry Conference, April 28-29, 2021. While the conference will be held virtually for the first time in its history, the focus will continue to be the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
jlne.ws/2PPGgQh

DOJ enforcement priorities in commodities & derivatives markets: A discussion with DOJ leadership
FIA.org
April 13, 2021; 1:00 p.m. – 2:00 p.m. ET
During this discussion, James McDonald, Sullivan & Cromwell Partner, will interview Robert Zink, U.S. Department of Justice, Acting Assistant Attorney General (and Chief of the DOJ Fraud Section from January 2019 to August 2020), regarding DOJ’s enforcement priorities in the commodities and derivatives markets and white collar area more generally.
/bit.ly/3se39y9

Miscellaneous

Unions and Taxes Aren’t the Problem. It’s the Abuse of Power.
Dylan Ratigan – tastytrade
Listen, for better or worse we have adopted a Modern Monetary approach in this country. When we need money for things like banking crises or pandemics, we dole out however much cash we feel is necessary without concern for how we’ll pay for it. It’s essentially indiscriminate spending. But when we’re not in the throws of a crisis, spending comes to a standstill and how we’ll fund projects takes center stage. In the corporate world, a similar approach reigns supreme. Thanks to ultra low interest rates, companies can essentially borrow money for free. How they’ll actually pay off that debt is the forgotten part of the conversation when the debt itself is financing stock buybacks and increasing share prices.
/bit.ly/3g4PPck

(Podcast) VV 441: The Return of the Volatility Hedgers?
Volatility Views – Options Insider
Host: Mark Longo, The Options Insider Media Group
Matrix Hot Seat: Mark Sebastian, The Option Pit
MIAX Hot Seat: Shelly Brown, Miami Exchange Group
/bit.ly/3g0KNgR

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