JLN Options: The New VIX Futures Margin Requirements

Jun 28, 2013

Lead Stories The New VIX Futures Margin Requirements  
Adam Warner – Schaeffer’s Investment Research
It’s a summer Friday, so it’s not likely we see too much intraday volatility in stocks today. CBOE Market Volatility Index (VIX) futures, though, could see some serious action. Margin requirements have changed significantly since last night. My friend Bill Luby has the details here at VIX and More:
http://jlne.ws/12vm2rO Options Investors Remain Wary as VIX Falls  
Kaitlyn Kiernan – The Wall Street Journal
The Chicago Board Options Exchange’s Volatility Index is coming off its highest levels of the year, but options traders are remaining cautious as uncertainty around Federal Reserve easing efforts lingers.
http://jlne.ws/15JX3n1 Lacker Says Markets to Stay Volatile as Fed Debates Tapering
Jeff Kearns – BloombergBusinessweek
Federal Reserve Bank of Richmond President Jeffrey Lacker, who dissented against additional stimulus at every Fed meeting last year, predicted financial markets will remain volatile as policy makers debate how and when to curtail the central bank’s asset purchases.
http://jlne.ws/12vlKBn OPTIONS REPORT: Volatility Fund Changes with the Times
Mary Schroeder – Traders Magazine
Time marches on.
As the financial crisis of 2008 recedes into memory, the market surges upward and volatility subsides, investor demand for options as protection fades. While clients are still concerned about risk, they are also interested in making money in the current low-interest-rate environment.
http://jlne.ws/12vgIVz End-quarter factors added fuel to Fed-sparked sell-off
Simon Jessop – Reuters
Federal Reserve Chairman Ben Bernanke may have lit the touchpaper on the market rout of recent weeks, but some of the fuel was rather prosaic.
http://jlne.ws/12vnFpt A Gauge of Investor Fear in India Goes Largely Unnoticed
Gurdev Singh Virk – The Wall Street Journal
An index that measures investor fear in India’s stock markets recently hit its highest level in nearly a year, but hardly anyone noticed. That may change if the National Stock Exchange of India receives approval to launch trading products linked to the index.
http://jlne.ws/17HV1L6 VIX Falls Back Below 17
Wall Street Sector Selector
Another batch of positive economic reports and a third consecutive advance by the S&P 500 sent the VIX back below 17 on Thursday.
http://jlne.ws/17HVXz1 Videocast: VIX pits look to next week
optionMONSTER
http://jlne.ws/12vnhqY  Brace for More Market Volatility in the Second Half of 2013
JeeYeon Park – CNBC
Investors, buckle your seat belts. Markets in the second half could be driven by more volatility, though most strategists expect equities to ultimately end the year higher than their current levels.
http://jlne.ws/17HWfpA Volatility is here to stay – analyst
4-Traders
Volatility jumped in Q2, with US stock market’s VIX index having its biggest rise in almost 2 years. And higher ‘vol’ is something investors may have to get used to, says Charles Stanley’s Jeremy Batstone-Carr.
http://jlne.ws/12vnvyz NYSE Trader Explains The Importance Of The VIX [video]
Alana Kakoyiannis – Business Insider
The Chicago Board Options Exchange (CBOE) Volatility Index, commonly known by its ticker VIX, measures the implied volatility of the S&P 500.
It is often referred to as the fear index since it tends to move in correlation with major changes in the market.
http://jlne.ws/12vn4UI
 

Exchanges

    
GETCO and Knight Capital Group Combine NYSE Designated Market Maker Units  
Press Release (NYSE Euronext)
GETCO Holding Company LLC (GETCO) and Knight Capital Group Inc. (Knight) (NYSE:KCG), which earlier this week announced shareholder approval of the merger that will form KCG Holdings, Inc., today announced the combination of each firm’s Designated Market Maker (DMM) units. Effective July 2, 2013, the listed securities of the New York Stock Exchange (NYSE) and NYSE MKT DMM units of Knight and GETCO will trade through one broker-dealer, Knight Capital Americas LLC.
http://jlne.ws/12vktu8 MIAX Options Exchange Announces Priority Customer Rebate Program For Exchange Members
Press Release (MIAX)
The MIAX Options Exchange (“MIAX” or the “Exchange”) announced today that it will implement a Priority Customer Rebate Program (the “Program”) for the period beginning July 1, 2013 and ending September 30, 2013. Under the Program, MIAX will credit each Exchange member a per contract amount resulting from each Priority Customer order transmitted by such member which is executed on the Exchange in all multiply-listed option classes, provided the member meets certain volume thresholds in a month.
http://jlne.ws/124Ty8p (PDF)

Regulation

Whose rules apply when derivatives cross borders?
Zachary Warmbrodt – Politico
The Commodity Futures Trading Commission was given new powers by the 2010 Dodd-Frank law to oversee the once opaque derivatives markets that played a key role in the 2008 financial crisis, and it is almost done putting in place the new rules of the road.
http://jlne.ws/13d6n6L Corzine Faces Trading Ban as CFTC Sues Over MF Global
Keri Geiger, Joshua Gallu & Tiffany Kary – Bloomberg
A U.S. regulator’s lawsuit against Jon Corzine could make him the first former leader of Goldman Sachs Group Inc. to be banned from trading, the industry he returned to after serving as a New Jersey senator and governor.
http://jlne.ws/17HVcWy Wall Street watchdog scraps controversial supervision plan
Suzanne Barlyn – Reuters
Wall Street’s industry-funded watchdog has scrapped a controversial plan that would have required brokerages to supervise business lines that are not related to the securities industry, according to a recent regulatory filing.
http://jlne.ws/17HVm0a

Strategy

Profit from this Short-Term S&P Trade with ETFs 
InvestorPlace
The market’s three-day-run has the bulls claiming that the market is set to regain its highs and move through higher through the summer months.  A closer look at the technical picture paints a different scene as the S&P 500 and other indices are already running into technical resistance.
http://jlne.ws/12vmqqs

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