The John Lothian Daily Update is a podcast turning the daily JLN hits and takes comments, our original content and the stories and quips in the top box of First Read into a daily podcast.
Hits & Takes
Late yesterday, Citadel filed a lawsuit in which it claims that the SEC did not properly approve the D-Limit order type from IEX.
Here’s is their statement concerning Citadel’s recent filing from Ronan Ryan, president and co-founder of IEX Group:
“Despite the current environment, Citadel has followed through on their attempt to reverse the SEC’s approval of an innovation that is designed to protect all investors from predatory trading strategies. Since IEX launched D-Limit in October, public trading data has shown that it delivers better execution quality and price improvement to investors in volatile markets. We look forward to responding to their submission and protecting our right to offer innovations that help improve the trading experience for all investors.”
Matt Leising had a story from Feb. 1 that I missed titled “Darknet Market Had a Record 2020, Led by Russian Bazaar Hydra.” The subheadline said “Hydra accounts for more than 75% of all darknet sales: report.” Whoever came up with the name “Hydra” for the platform, which only serves Russian-speaking countries, has a great sense of humor. But for some reason, I am not laughing. Hydra of course is the name of the enemy in the Captain America movies from Marvel.
After publishing the article above, I had a conversation with Tom Sosnoff of Tastytrade about participating in our Open Outcry Traders HIstory Project and the Path to Electronic Trading video series. After mentioning the column, I confessed to him the ending, that I had only traded my first single name equity on Monday. It was embarrassing. It was kind of like confessing to the Pope that you only just prayed for the first time.
In the column published above about all the ways I have traded futures, there is also an audio version of me reading this commentary. I am sure I left some ways out, in fact my very first trade was a paper trade while I was a runner for Shearson American Express during the summer of 1981.
Fortune Magazine named U.S. Bank one of the 2021 world’s most admired companies. It is my business and personal bank, one of them, and I admired them enough to buy stock in them.
DePaul professor of finance Lamont Black went onto WGN 720 AM radio in Chicago and explained the GameStop stock craze.
As the OCC begins Black History Month, they announced their newest employee network group, the Black Organization for Leadership and Development (BOLD).
The TRADE’s print publication has gone green with a new eco-friendly magazine printing process.
We have now gone eight days without a donation to the JLN MarketsWiki Education GoFundMe campaign. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
Today we are going to publish our video with John Van Der Bleek for the Path to Electronic Trading series. Look for it on johnlothiannews.com.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
SBI VC Trade, a subsidiary of SBI Holdings, is reportedly adding XRP to its cryptocurrency lending business…surprising, given that many cryptocurrency trading platforms, including Coinbase and Blockchain.com, have been suspending trading or even de-listing XRP from their platforms in the wake of the SEC’s current lawsuit against Ripple, the company that created the digital asset.~MR
John Lothian: A Futures Trader’s Confession; All the Ways I Have Traded Futures Over the Years
John Lothian – Publisher – JLN
I was brought up as a futures trader and the people I knew were futures traders. The people at my first industry-related job that I listened to on long car rides or on the radio talked about futures. The people I worked for after college graduation wrote about or traded, or brokered, or cleared futures. The people who poured my beer at Chuck’s tavern in Fontana, Wisconsin later traded futures.
I have traded futures for discount futures clients and for a house account. I have traded futures for my own account and for a proprietary trading group. I have traded futures as a full-service broker and as a Commodity Trading Advisor.
I have traded futures on the 8th floor of the CBOT Building, and the 12th, the 13th and the 30th. I have traded futures in the CME Building and down at 216 West Jackson and on Exchange Place from the Brokers Building that smelled of fried fish on Fridays.
To read the rest of this commentary, click HERE.
Nasdaq Weathered a “Perfect Storm” in 2020, Led Exchanges in Single Stock Options Volume
Matt Raebel – John Lothian News
While major world events can cause ripple effects in the markets, the effects of the ongoing pandemic have felt more like a series of earthquakes. The year 2020 was an historic one for many reasons; in Nasdaq’s case, it was also the first year that it led all exchanges in total volume traded for equity options.
Options traders had already anticipated that 2020 would be a rocky year even before the pandemic kicked into high gear. The U.S. presidential election was expected to cause significant volatility in the markets between October and December. Nasdaq’s options markets processed 365 million trades consisting of 2.58 billion contracts. A lot of that came from brokers and hedge fund managers scrambling to adapt to fluctuations in the market caused by a myriad of factors, including increased retail trading activity, by hedging their downside risk – and there were a lot of downsides in 2020.
To read the rest of this story, go here.
Ed Tilly – The Path To Electronic Trading
In a recent Zoom interview with John Lothian News for the JLN MarketsWiki Education Path to Electronic Trading series, Cboe Global Markets Chairman. President and CEO Ed Tilly shared the story of his start in the options industry and how that led him on a path towards electronic trading.
Tilly started at the Cboe in 1987 as a clerk working for legendary futures and options trader Steve Fossett. He spent time learning the business from Fossett and his team and finally became a trader for Fossett.
The Robinhood drama teaches us to look beneath the surface; ‘The piece of the financial markets that ordinary investors see is just the tip of an iceberg’
Gillian Tett – FT
Last week, amid the Robinhood market drama in which the trading app’s users produced wild swings in several stocks, I stumbled on one of my favourite small books, Networks of New York: An Illustrated Field Guide to Urban Internet Infrastructure. At first glance, that title might seem distinctly dull — and not obviously connected to the current Wall Street fireworks. The book was penned almost five years ago by Ingrid Burrington, a Brooklyn-based artist turned social commentator, because she was frustrated by so few people truly understanding how the internet works.
*****Gillian Tett makes a strong case for why traders of all stripes should be readers of the John Lothian Newsletter, without saying as much.~JJL
Stonks Are Bonkers, and Other Lessons From the Reddit Rebellion; A tendies-fueled fever upended finance, albeit briefly, and left normies hugging index funds. The serious money is still going long.
Pat Regnier – Bloomberg
There’s been a rebellion in the stock market, in case you hadn’t noticed. The Battle of GameStop, the stampede of the meme stocks, and the rage against Robinhood were as transfixing as the bursting of the dot-com bubble—only this time the action was focused on a handful of companies associated with 1990s culture, and this time everything was going up. Thanks to traders talking it up on social media, the stock of GameStop Corp., the unprofitable mall retailer of video games, climbed as much as 1,745% from the start of the year. The AMC movie theater chain peaked at a gain of 839%; BlackBerry and Nokia, which once made very popular phones people strapped to their belts, spiked 279% and 68%, respectively; and Koss (headphone maker), Build-a-Bear Workshop (chain of stores that … you know what they do), Tootsie Roll Industries (yes, that Tootsie Roll), and, for some reason, silver all shot up.
*****Stonk might be the word of the year so far.~JJL
Bored Lockdown Traders Are a Danger to Themselves; Churning your investment portfolio can erode your returns.
Mark Gilbert – Bloomberg
The Reddit-inspired trading frenzy that lured retail investors to invest in GameStop Corp., AMC Entertainment Holdings Inc. and even precious metals in recent days seems to be abating. But bored, housebound punters are likely to continue to click away their lockdown blues by trading securities. The danger is that they’ll erode the value of their investment portfolios by overtrading.
*****I am not bored. Look, something to trade!~JJL
How to save the world from long Covid; ‘We need to spend whatever it takes on wartime-style mobilisation to make, distribute and inject vaccines’
Simon Kuper – FT
When I listen to scientists talk about where we might be a year from now, two main scenarios emerge. The first one is good: Covid-19 keeps circulating but loses its sting. Most people in rich countries, and the most vulnerable in developing countries, get vaccinated in 2021. The vaccines prevent disease caused by all strains. Covid-19 weakens: once it finds potential victims protected either by vaccination or past infection, it becomes at worst a nasty cold. “The most likely thing is that it will mutate into a more benevolent form. That may solve the problem,” says Anthony Costello, a former director at the World Health Organization.
*****We need to do this, we just need the leadership and the will.~JJL
Deutsche Börse Photography Foundation and Deutsche Gesellschaft für Photographie (DGPh) have awarded prizes for photography publications
Deutsche Börse Photography Foundation and Deutsche Gesellschaft für Photographie (DGPh) have awarded prizes for photography publications; Dr. Carolin Görgen receives research award “Thinking Photography”
“Writing Photography” awarded to Stefan Vanthuyne
For the first time, the Deutsche Börse Photography Foundation and the German Society for Photography (DGPh) jointly awarded their newly launched prizes for research and journalism in the field of photography. Both awards recognize contributions that enrich and promote the scientific exchange on the medium of photography in a special way.
******This is so cool.~JJL
Wednesday’s Top Three
Our top story on Wednesday was Bloomberg Businessweek’s Clearinghouses Are Intended to Reduce Risk. They Can Amplify It, about the DTCC (which was also our MarketsWiki Page of the Day.) Second was the YouTube video from LegalEagle, Illegal Trading on GameStop? or WallStreetBets: The Stonkening. Third was The New York Times’ Robinhood’s C.E.O. Is in the Hot Seat.