Tesla Stock Is Splitting 5 for 1; Gold’s Wild Ride Continues With Prices Rebounding After Rout

Aug 12, 2020

Lead Stories

Tesla Stock Is Splitting 5 for 1. Here’s What Happens to Its Options.
Al Root – Barron’s
Tesla is splitting its stock 5 for 1. News sent shares up in premarket trading Wednesday. But what happens to the company’s stock options?
The short answer is nothing. Options contracts adjust when things such as stock splits happen. There is no risk to call-option holders and no windfall profit for put-option owners.
/bit.ly/33TykW0

Gold’s Wild Ride Continues With Prices Rebounding After Rout
Thomas Biesheuvel and Justina Vasquez – Bloomberg
Gold rebounded Wednesday, extending a series of wild swings that saw the metal hit a record on Friday before plunging to below $1,900 an ounce.
After surging about 30% this year, gold’s rally came to a sudden halt Tuesday as U.S. bond yields rose, cutting into the negative real rates that had supported the metal. A measure of gold volatility over the past month jumped to the highest since April. U.S. equities followed European stocks higher on Wednesday, with the S&P 500 edging toward a record, helping limit gains for bullion.
/bloom.bg/31NSPRx

Goldman Loves a Good Crisis
Matt Levine – Bloomberg
When there is a big economic and financial crisis, like the one precipitated by Covid-19, an investment bank’s trading division will probably either make a lot of money or lose a lot of money. Financial asset prices are moving around a lot, and you’re either going to be on the right side of those moves, or the wrong side. As we have discussed before, it is more likely that you will be on the right side: The banks’ trading divisions are mostly in the business of providing liquidity to clients, not holding a bunch of assets; what happens in a crisis is not only that asset prices go down (though, in the case of Covid, also rapidly up again) but also that the price of liquidity goes up, and if you are selling liquidity you make a lot of money. But the banks are exposed to asset prices too, one way or the other, and if they’re on the wrong side of the assets they can lose a lot of money.
/bloom.bg/2XRE9Qg

Charting the approach of record highs, S&P 500 rises amid market rotation
Michael Ashbaugh – MarketWatch
Technically speaking, the U.S. benchmarks’ already-bullish backdrop has strengthened amid rotational August price action.
Against this backdrop, S&P 500 has registered a seven-session winning streak — rising within view of record territory — while the Nasdaq Composite pulls in, digesting a decisive early-month break to all-time highs.
/on.mktw.net/31NTNNF

Bitmain spin-off’s crypto exchange to launch bitcoin options as pricing competition heats up
Frank Chaparro – The Block
Matrixport’s crypto exchange Bit.com is launching bitcoin options. The firm’s launch comes amid an increase in interest among Chinese family offices. At the same time, fees in crypto options are seeing compression.
/bit.ly/33QxGZy

Exchanges and Clearing

ABN Amro Exit Threatens Commodity-Trader Liquidity Squeeze
Andy Hoffman and Ruben Munsterman – Bloomberg
Options for trade finance are waning as another bank retreats; ABN Amro’s loans to wind down in next three to four years: CFO
ABN Amro Bank NV became the latest bank to exit the commodity and trade finance business, further shrinking the pool of funds available to trading houses moving trillions of dollars of oil, metals and grains around the world every year. The Amsterdam-based lender, once a key pillar of a triumvirate of Dutch banks providing short-term loans to traders, said Wednesday it’ll close the division after racking up losses from a series of trading scandals. Following similar retreats by one-time stalwarts BNP Paribas SA and Societe Generale SA, it’s a blow for commodity traders dependent on such credit to fund their operations.
/bloom.bg/3kBUSkb

SGX reports market statistics for July 2020
SGX
Cash equity activity still at elevated levels year-on-year, moderating slightly from strong June;Equity index futures volumes up with continued risk management focus; China economic reopening fires up optimism on Asia recovery, stokes iron ore derivatives
Singapore Exchange (SGX) today reported its July 2020 market statistics. Markets continued to be focused on the ongoing reopening of global economies and news of fresh waves of COVID-19 infections in some countries. Equity market activity remained higher than a year earlier but moderated from a strong June. Equity index futures trading was more active as risk management remained in focus. Iron ore derivatives reflected optimism about China’s recovery and a broader Asian economic rebound from the pandemic.
/bit.ly/3ixs4r3

MIAX Exchange Group – Options Markets – Corporate Action Alert: Companhia Energetica de Minas Gerais – CEMIG (CIG)
MIAX Exchange Group
Companhia Energetica de Minas Gerais – CEMIG (CIG) has announced a stock dividend effective for Thursday, August 13, 2020. On that date, the current CIG option class will change to CIG1. The MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange will not list CIG1 options. Therefore, no options on CIG will be available for trading on Thursday, August 13, 2020.
/bit.ly/2Cpi9Vi

MIAX Exchange Group – Options Markets – Corporate Action Alert: Devon Energy Corporation (DVN)
MIAX Exchange Group
Devon Energy Corporation (DVN) has announced a Special Cash Dividend. Associated strike price adjustments will become effective on Thursday, August 13, 2020. DVN options will continue to trade without interruption on the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange. All GTC orders resting on the MIAX order books in DVN will be canceled at the close of business on Wednesday, August 12, 2020.
/bit.ly/3fSzkMH

MIAX Exchange Group – Options Markets – Corporate Action Alert: Sturm, Ruger & Company, Inc. (RGR)
MIAX Exchange Group
Sturm, Ruger & Company, Inc. (RGR) has announced a Special Cash Dividend. Associated strike price adjustments will become effective on Thursday, August 13, 2020. RGR options will continue to trade without interruption on the MIAX Options Exchange, MIAX PEARL Options Exchange and MIAX Emerald Options Exchange. All GTC orders resting on the MIAX order books in RGR will be canceled at the close of business on Wednesday, August 12, 2020.
/bit.ly/2FjXbZ5

Strategy

5 reasons why gold can keep climbing from current levels
Shalini Nagarajan – Business Insider
Gold has retreated this week below the $2,000-an-ounce-mark, notching up its biggest one-day fall in over seven years on Tuesday, as investors cashed in on a rally that has driven the price to unprecedented levels.
In the last few weeks, gold vaulted to record highs above $2,000, driven by hopes that US lawmakers would approve another trillion-dollar stimulus bill aimed at cushioning the economic impact of coronavirus.
/bit.ly/3ajHIUn

Miscellaneous

Shareholders Benefiting From Virtual Communication: Broadridge CEO
Bloomberg (VIDEO)
Broadridge Financial Solutions Chief Executive Officer Tim Gokey sees a significant increase in virtual shareholder meeting participation. He speaks with Bloomberg’s Caroline Hyde, Romaine Bostick and Taylor Riggs on “Bloomberg Markets: The Close.”
/bloom.bg/2DCnOYQ

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