Observations & Insight
The Spread: NO Mo’ FOMO
This week on The Spread, the Senate Banking Committee scrutinizes retail trading apps, a proposal is filed with the SEC for an ETF that lets investors bet on FOMO, and more.
Jack Sandner: Chicago Success Story, Fighter, Lawyer, Trader, Brokerage Executive, Exchange Leader, Civic Leader and Investor
John Lothian – John Lothian News
Jack Sandner was all the things listed in the headline above, but also many more. He might be remembered for all of them, but I will remember him as a determined defender and proponent of Chicago’s futures markets, especially the Chicago Mercantile Exchange’s.
I was lucky enough to interview Jack for our Open Outcry Traders History Project in 2019. The JLN video team and I went to his offices in the CME Building and amidst the clutter of his office and, bedazzled with memorabilia of a lifetime of service to the Chicago Mercantile Exchange and the CME Group, we set up the lights and cameras.
To read the rest of this story, go here.
JJL: Our friends at FEX Global have big news today with the launch of the FEX Global Australian Futures Exchange on March 26. Best of luck to our friends Down Under! See the notices in Exchange News from the CME about “Initial Listing of Australian Coal, Power and Asia Crude Futures and Options for FEX exchange Cleared at CME Clearing” and “CME Clearing to Launch Clearing Partnership with FEX Global.”
Tech’s Volatility Roller Coaster Is Back at Pandemic-Crash Level
Elena Popina – Bloomberg
A year after the crash, March is proving to be another brutal month for investor nerves. The Nasdaq 100 Index has moved at least 1% in either direction on eight of March’s 10 trading days, a string not seen since the depths of the pandemic-fueled bear market a year ago. After enjoying bullet-proof status for most of 2020, uncertainty over tech stocks is building as 10-year Treasury yields push above 1.6% and the strengthening economy focuses more attention on cheaper cyclical companies.
How to Pay Taxes On Your Options Trading
Paul Price – The Street
Successful investing in options can generate both income and capital gains. Once you’ve made a profitable trade, it becomes important to know the rules regarding the tax treatment of your earnings. Understanding IRS rules allows for nuanced tweaking of positions to legally lower your tax bills in a number of ways. Here are a few basic principles on this topic. I’ll explain each of these items in detail later on.
Bond Market’s ‘Game of Chicken’ With Fed Is Set for a Reckoning
Vivien Lou Chen – Bloomberg
Investors are again reassessing one of the bond market’s premier reflation trades — the curve steepener — as expectations for growth and inflation perk up at a clip that was hard to imagine just a few months ago. Whereas back in December the thought was that the Federal Reserve might tamp down long-term Treasury yields, the issue now lies with shorter-dated ones — 5-year rates. Yields on that maturity have become unmoored in recent weeks, surging amid speculation that the central bank will need to start a cycle of rate hikes perhaps a full year earlier than officials have indicated. That shift has roiled the outlook for a classic iteration of the reflation wager, a widening gap between 5- and 30-year yields, even as the narrative of a stimulus-fueled recovery has only gained momentum.
Deep hedging strays when volatility gets rough – study
Mauro Cesa, Rob Mannix – Risk.net
For derivatives hedgers preparing to throw out their Black-Scholes models in favour of new data-driven algorithms, a recent study may give pause for thought. Banks such as JPMorgan have experimented in recent years with so-called deep hedging, in which machine learning systems are trained to hedge complex derivatives books.
Exchanges and Clearing
The dawn of Australia’s new futures exchange, FEX Global
Rick Steves – Finance Feeds
FEX Global has partnered with CME Clearing to act as the counterparty in the trades. The firm’s reputation within the industry will certainly back FEX Global’s first steps and ensure its Asia-Pacific customers are being offered world standard clearing services. Australia is about to have a new exchange catering to the APAC region. FEX Global will offer centrally cleared futures and options for the energy, environmental, and commodity product classes. To be launched on March 26, 2021, the futures exchange aims to optimize hedging and risk management for market participants by providing futures and options for both commodity and energy markets, as well as emerging renewable energy and environmental markets.
Launch of FEX Global Australian Futures Exchange, March 26, 2021
FEX Global announced the launch date of March 26, 2021 for its futures exchange. The exchange will offer centrally cleared futures and options for the energy, environmental and commodity product classes. FEX Global is focused on enabling the optimisation of hedging and risk management for market participants by providing futures and options for both commodity and energy markets, as well as emerging renewable energy and environmental markets
New Product Summary: New Product Summary: Initial Listing of Australian Coal, Power and Asia Crude Futures and Options for FEX exchange Cleared at CME Clearing – Effective March 25, 2021
New Product Summary: Initial Listing of Australian Coal, Power and Asia Crude Futures and Options for FEX exchange Cleared at CME Clearing.
Eurex and Korea Exchange expand long-standing cooperation with further Futures
Eurex and Korea Exchange, KRX, are further expanding the range of products accessible via their joint link. As of 22 March, Eurex will list futures on the Korean benchmark index KOSPI 200. The new product listing emphasizes once again the partner exchanges’ commitment to connecting markets globally. Eurex is the only venue that offers international investors access to the Korean market outside Korean trading hours. Overnight KOSPI 200 Options and Mini-KOSPI 200 Futures have been listed on Eurex since 2010 and 2016, respectively. The launch is of high strategic importance for KRX and Eurex. KOSPI 200 Options are among the four most heavily exchange traded index contracts globally. The opportunity to trade these options on one platform, together with KOSPI 200 Futures, allows for better exposure to and hedging of the Korean derivatives market.
Registration is open! – FIA Boca 2021
A New Virtual Experience
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 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.
(Podcast) Volatility Views 438: The Great Volatility Sucking Sound
Options Insider Radio Network
Host: Mark Longo, the Options Insider Media Group
Co-Host: Mark Sebastian, the Option Pit
MIAX Hot Seat: Simon Ho, T3 Index
Matrix Hot Seat: Matt Amberson, Option Research & Technology Services