The Bitcoin halving is coming — How are options traders positioned?

Apr 9, 2024

Observations & Insight

In the latest episode of the Alpha Exchange podcast series hosted by Dean Curnutt, CEO of Macro Risk Advisors, Mandy Xu, head of derivatives market intelligence at Cboe Global Markets, discusses various aspects of financial markets, risk management, and capital allocation within the alternatives industry. Xu explores critical market risk indicators such as skew, implied correlation, and the innovative VIXHY (high yield), alongside insights into ODTE and the nuanced dynamics of capital flows, shedding light on the motivations driving buyers and sellers in today’s market landscape. ~JJL

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Volatility Insight of the Week: CME Group’s volatility index indicates Soybean Oil Skew Ratio is reaching a 3-month high. To learn more about CME Group’s Volatility Index, please visit here

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Lead Stories

The Bitcoin halving is coming — How are options traders positioned?; Crypto traders expect the upcoming halving to send BTC price much higher, but what does the options market say about pro traders’ expectations?
Marcel Pechman – CoinTelegraph
As the Bitcoin halving event draws nearer, market participants, especially professional traders, are keenly observing the shifts within the ecosystem. Historically, the anticipation surrounding halving events has fostered a bullish sentiment, especially in the months that follow rather than on the exact date of the halving. This is attributed to the delayed impact of the reduced mining output on the market.
/jlne.ws/3VTMMsm

Stock-market rally has likely reached a ‘tipping point’ following spike in Wall Street’s ‘fear gauge’; Analysts warn a rising Vix coupled with increased demand for bearish options likely signals more weakness for stocks ahead
Joseph Adinolfi – MarketWatch
After five months of calm, the stock market’s incredible march higher was interrupted last week as Wall Street’s “fear gauge” spiked. Some analysts believe it signals the beginning of a more serious pullback.
/jlne.ws/3Jfx7Mp

VIX remains above 15 even as market moves muted
Jamie Chisholm – MarketWatch
Gold hit another record high early Tuesday, flirting with $2,360 an ounce for the first time. Silver sits above $28 an ounce, its most expensive in nearly 3 years.
Sustained central bank buying has been underpinning the yellow metal of late, with some analysts arguing that heightened geopolitical tensions are also encouraging buyers of such so-called haven assets.
/jlne.ws/3Jb5zYn

Yen Traders Are Targeting Slump Beyond Key 152 Per Dollar Level; Options with a 153 strike are gaining interest, DTCC data show
Vassilis Karamanis – Bloomberg
Currency traders are betting that the yen will tumble beyond the closely-watched 152 per dollar level, and are ramping up wagers on a slide toward 155.
Options looking for a 2% fall in the yen to around that level represent 18% of total bets against the currency as of Tuesday, compared to around 5% last month, data from the Depository Trust & Clearing Corporation show.
/jlne.ws/49ylPxg

Exchanges

New Equity Option Class
Bourse de Montreal
Bourse de Montreal Inc. (the Bourse) and Canadian Derivatives Clearing Corporation (CDCC) hereby inform you that at the opening of trading on Wednesday April 10, 2024, the following new option class will be listed: Foran Mining Corporation (FOM .
/jlne.ws/4cThPKX

New Product Summary: Initial Listing of the Options on Euro Short-Term Rate (euroSTR) Futures Contract – Effective May 20, 2024
CME Group
Initial Listing of the Options on Euro Short-Term Rate (euroSTR) Futures Contract
/jlne.ws/3vGnGCz

TAIFEX April Newsletter
Taiwan Futures Exchange
I. News and Events. TAIFEX Posted Volume Increase in Q1. The Taiwan Futures Exchange (TAIFEX) experienced a notable increase in trading volume during the first quarter of 2024. The total trading volume reached 84,497,330 contracts, with an average daily trading volume (ADV) of 1,508,881 contracts, marking a 20.51% increase from 2023. Notably, the ADV of TAIEX Options (TXO) rose to 820,776 contracts, a growth of 21.32%, Single Stock Futures (STF) surged to 262,005 contracts, significantly up by 65.39%, and TAIEX Futures (TX) grew to 153,172 contracts, an increase of 10.83%, compared to the same period in the previous year. Moreover, the night trading session played a pivotal role, posting an ADV of 431,922 contracts and accounting for 28.63% of the market’s total volume. This extended trading window provided investors with enhanced flexibility and accessibility, enhancing market participation and liquidity. Another noteworthy contributor to TAIFEX’s performance was the uptick in foreign institutional participation, climbing from 28.35% in 2023 to 31.20%.
/jlne.ws/3Jc5yn5

Regulation & Enforcement

SEC delays decision on proposed rule change for spot bitcoin ETFs options
Kathie O’Donnell – Pensions & Investments
The Securities and Exchange Commission has delayed a decision regarding a proposed rule change sought by NYSE American that would permit the listing and trading of options on spot bitcoin ETFs, an April 8 SEC news release said.
/jlne.ws/49pAyL2

European T+1 Industry Task Force comments on recent UK report on moving to T+1 and outlines its next steps ; FIA joins industry associations in welcoming a recent UK report on moving to T+1 settlement
FIA
The European T+1 Industry Task Force, comprised of industry associations including FIA and FIA EPTA, has welcomed the recent publication of a report by the UK Accelerated Settlement Task Force.
In a statement issued today, the European T+1 Industry Task Force says:
“The European T+1 Industry Task Force welcomes the recent publication of a report by the Chair of the UK Accelerated Settlement Task Force, and in particular the statement that the ‘UK and other European jurisdictions should continue to explore opportunities for close collaboration…to see if they can align their moves to T+1.’ The members of the European T+1 Industry Task Force emphasise the need for a coordinated approach between the EU/EEA, Switzerland and the UK.”
/jlne.ws/43QTVvq

Moves

Miami International Holdings Announces Troy Kane Joins Executive Management Team as President of MGEX
MIAX
Miami International Holdings, Inc. (MIH), a technology-driven leader in building and operating regulated financial markets across multiple asset classes and geographies, today announced Troy Kane has joined the company as President of Minneapolis Grain Exchange (MGEX™) where he will be responsible for day-to-day operations of the exchange. Mr. Kane has also been appointed CEO of MIAX Futures, a newly formed company that will manage the futures businesses of MIH where he will be responsible for the development of the company’s futures business strategy. Mark Bagan will continue as CEO of MGEX during a transition period after which time he is expected to continue with MGEX as Executive Vice Chairman of the Board.
/jlne.ws/3vCwKsa

Strategy

JPMorgan Says Use ‘Cheap Options’ to Bet on Chinese Stocks; Favors buying options on larger cap indexes for a rebound
John Cheng – Bloomberg
Chinese stock investors should consider using “cheap options” as safer ways to seize gains in the country’s potential cyclical upturn, according to JPMorgan Chase & Co.
The brokerage’s strategists, including Tony SK Lee, favor buying options on larger cap indexes to position for a potential rebound in Chinese stocks, according to their note issued on Monday. Specific trade recommendations include buying a narrow call spread on H-shares or FTSE China A50, and buying Chinese equities call, contingent on the dollar not falling against the offshore yuan.
/jlne.ws/49DzxPO

Put/Call Ratio
Cboe (Video)
In #Vol411, Tim Biggam @Delta_Desk updates us on the $VIX futures term structure, the #VIX Index options put/call ratio so far today and more.
/jlne.ws/3PVnlTm

Education

Debunking Options Myths
Cboe
Are the misconceptions fueled by recent 0DTE confusion preventing you from fully harnessing the potential benefits of options trading? We’re turning to the facts to set the record straight.
Among the critical building blocks of a well-diversified investment portfolio are options. Yet, options trading ranks high among the most well-preserved myths about the industry. “Trading options is only for seasoned professionals,” they say. The list goes on, perpetuating the myth that options are only for certain people, and you’re not smart enough to join that club. This rhetoric scares people from even exploring options trading, ruling out an entire spectrum of tools for investors.
/jlne.ws/3UbfFyV

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