JLN Options: Stocks Off Lows, but Economic Fears Persist

Jul 16, 2012

Lead Stories

Stocks Off Lows, but Economic Fears Persist
JeeYeon Park, CNBC
Stocks pared some losses in volatile trading Monday, but investors hesitated to jump in amid concerns over the slowing economy and ahead of Fed Chairman Ben Bernanke’s speech later this week…
The S&P 500 and the Nasdaq also dipped after briefly turning higher. The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded near 17.

VXX Hits New All-Time Low – How Far Down Can It Go?
Richard Bloch, Seeking Alpha
On the morning of Friday, July 13, a reader sent me a question ask how low the iPath Short-Term VIX ETN (VXX) could trade, noting that “I have always believed that there is a downside limit for the VXX.”
My reply was that there is no downside limit on how low this ETN can trade. And wouldn’t you know it? By the end of that same trading day, VXX closed at a fresh, new all-time low of 13.35.

Emerging Stocks Advance for Second Day on Stimulus Speculation
Sridhar Natarajan and Stephen Gunnion, Bloomberg
Most Emerging-market stocks retreated as retail purchases in the U.S. unexpectedly fell and the International Monetary Fund lowered its global growth forecast, dimming the outlook for exporters…
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, gained 2.5 percent to 26.99.

Traders Tune Out Noise From Europe
Matt Phillips and Jonathan Cheng, The Wall Street Journal
In months past, as Ann Miletti powered through her early-morning workouts, she would be fixated on the latest headlines out of Europe scrolling across the gym’s televisions.
But after more than two years on the treadmill of the European debt crisis, the portfolio manager at Wells Fargo Advantage Funds says she tunes out and keeps running. Ms. Miletti and many other investors say they suffer from headline fatigue.

Hedge Funds Future: Time to ‘Separate Men From Boys’
Jeff Cox, CNBC
A once promising year for hedge funds has turned into another trudge through the muck, indicating that it may be time for the industry to rethink the way it does business.
Hedge fund returns for the first half of 2011 have hovered around 1.3 percent, underperforming most other asset classes, including stocks and bonds.

Peregrine CEO’s Dramatic Confession
Jacob Bunge, Scott Patterson and Julie Steinberg, The Wall Street Journal
The head of collapsed brokerage firm Peregrine Financial Group Inc. admitted to defrauding clients out of more than $100 million over nearly 20 years by personally doctoring bank statements and duping auditors with the help of a post-office box, federal prosecutors said Friday.

Others at Peregrine Probed
Jacob Bunge, The Wall Street Journal
Authorities are continuing to investigate the actions of top officials at collapsed brokerage Peregrine Financial Group Inc. even though Chief Executive Russell Wasendorf Sr. said last week he was solely responsible for a decades-long fraud, according to people familiar with the investigation.‪

U.S. investigates whether JPMorgan traders hid losses
David Henry and Aruna Viswanatha, Reuters
U.S. federal investigators are looking at whether JPMorgan Chase & Co traders hid trading losses that have since grown to $5.8 billion (3.72 billion pounds), according to a person familiar with the matter, after the bank said its own probe found reason for suspicion.

Broker scandals demand futures industry reform, CME says
Tom Polansek, Reuters
Futures exchange operator CME Group questioned on Friday whether brokers should be allowed to hold their customers’ collateral, following the disclosure of massive fraud at failed brokerage PFGBest.

Spot Trading Honored for Second Consecutive Year as One of “Chicago’s 101 Best and Brightest Companies to Work For”
Press Release
Spot Trading LLC, a leading proprietary equity options trading firm, announced that the National Association for Business Resources (NABR) has again named the firm one of “Chicago’s 101 Best and Brightest Companies to Work For.”  This is the second consecutive year that NABR has recognized Spot as a company that delivers exceptional human resources practices and appreciates employees as its greatest asset.

OptionMonster Daily Volatility Report with Jamie Tyrrell of Group1 Trading:


CME Group Statement
Press Release
“We are appalled by the recent violations of customer segregated funds that have shaken the very core of our industry.  These breaches of trust are completely unacceptable not only to CME Group but also the businesses and individuals who rely on these markets to manage their risk. Without question, the current system in which customer funds are held at the firm level must be reevaluated.  CME Group is committed to working with Congress, CFTC, NFA, FIA and market participants to restore confidence in derivatives markets.”


Cinnober’s clearing technology wins the technical battle at LME
Press Release
The London Metal Exchange (LME) has today announced the appointment of Cinnober as LME’s technology provider for their new clearinghouse, LME Clear.
In December 2011, following an extensive feasibility study, the LME announced that the exchange had taken the decision to pursue self-clearing. The initial phase of the implementation program has included a tender process with more than 20 technology providers. Selecting the right one has involved a thorough process including a design study and hands-on activities covering both functional and non-functional areas.

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