The Spread: A Penny Stock For Your Thoughts?

Suzanne Cosgrove

Suzanne Cosgrove

Editor

Welcome to The Spread, I’m Matt Raebel.

First off: a Texas Oil company, Ring Energy, made headlines this week when Bloomberg reported on an explosion of trading in out-of-the-money call options on the company, ending the trading day Monday as the eighth-most traded equity option of the day. Ring Energy had been featured on /r/PennyStocks – a lesser-known Reddit trading community – so Bloomberg referred to this as a “meme” stock, which isn’t technically true since no memes were created to drive its volume up or down, but I guess if you’re unfamiliar with the vernacular of the internet, it could seem like a catch-all term. 

CME Group announced it added 11 implied volatility benchmark indexes, to its CVOL volatility index suite on Tuesday. This means that clients of the CME can access two years of historical implied volatility data on 19 CVOL indexes for a number of assets, including Treasuries, Henry Hub Natural Gas, gold, silver, corn, soybeans, wheat, and even WTI light sweet crude oil – which sounds like something that would be really good on a salad. 

Cboe Global Markets announced Monday that it will start offering early trading hours at the Cboe EDGX Equities Exchange beginning at 4:00 a.m. Eastern time, and will start taking orders at 3:00 a.m. The earlier open will begin on Monday, March 8, pending regulatory approval. Currently, the exchange starts trading at 7 a.m. Eastern time and starts taking orders at 6 a.m. but the company wants to meet demand for trading in the wee hours of the morning — especially from retail traders — because the internet never sleeps, and neither do a lot of retail traders, apparently.

And finally, the City is dead – long live the City! According to data from Cboe Europe, an average of 9.2 billion euro shares a day were traded in January on Euronext Amsterdam, CBOE Europe and Turquoise, while volumes in London fell to 8.6 billion euros. Since Brussels stopped recognizing UK exchanges and trading venues as having the same supervisory status as its own after the new year, London’s volumes have taken a painful hit and Amsterdam has won big.

We’ve got a couple of new reports by JLN Editor Suzanne Cosgrove up on the site now, one about the options markets and the other on Illinois’ cannabis industry; they’re good reads, so head to John Lothian News dot com to check that out, as well as our other content, including the most recent edition of the CryptoMarketsWiki podcast with Thom Thompson and myself. That’s gonna do it for The Spread this week – stay safe and happy trading.

 

Sources:

Oil Meme Stock Draws Trading Frenzy in Out-of-the-Money Options 

Michael Tobin – Bloomberg 

https://bloom.bg/3aWcfrI

CME Expands Volatility Indexes

Traders Magazine

https://bit.ly/3jJWFUb

Cboe EDGX Equities Exchange To Introduce Early Trading Hours, Beginning March 8

PR Newswire (press release)

https://prn.to/3aU7NtU

Amsterdam ousts London as Europe’s top share trading hub; UK’s departure from the EU prompts shift in dealing of stocks and derivatives

Philip Stafford – FT
https://on.ft.com/3acwuT8

Explosion In Retail Options Trade Not A Short-Term Blip, Cboe’s Schwartz Says

Suzanne Cosgrove – JLN

http://bit.ly/3jViUqB

The CryptoMarketsWiki Podcast Episode 17: The Ripple Effect

Matt Raebel – JLN

http://bit.ly/3d4UqcU

Update: Illinois Offers Object Lesson on Pros Vs. Cons of Cannabis Business

Suzanne Cosgrove – JLN

https://bit.ly/3tVhn8v

John Lothian Newsletter

Today’s Newsletter

Libor’s Final Days Begin With Push to Shake Up Swaps Market

Libor’s Final Days Begin With Push to Shake Up Swaps Market

First Read $51,906/$300,000 (17.3%) ++++ Hits & Takes John Lothian & JLN Staff The SEC issued an "Opinion of the Commission" on Monday in a case between ABN AMRO Chicago LLC and Chicago Board Options Exchange, Inc. and C2 Options Exchange, Inc. Here is a...

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Past The Spread Episodes

The Spread – July 23, 2021

The Spread – July 23, 2021

Volatility makes a return appearance as the Delta variant jangles nerves; Treasury bond yields perk up; July options expire; John Lothian chats with Cboe’s Ed Tilly about a World of Opportunity; UBS and SEC reach a settlement; FIA Tech expands; and the Options Institute’s Kevin Davitt explains why contract size matters in the “Term of the Week.”

The Spread – July 16, 2021

The Spread – July 16, 2021

Options traders torn between higher Inflation and steady Fed policy; June market share up at MIAX; John Lothian talks about a World of Opportunity; SEC charges binary options shop with fraud; Moscow Exchange set to offer quarterly options on U.S. stock index futures; and the Options Institute’s Kevin Davitt talks about implied volatility in the “Term of the Week.”

The Spread – July 9, 2021

The Spread – July 9, 2021

Chicago, a data destination; SEC, Robinhood and payment for order flow; John Lothian weighs in with his take; Retail trading continues to percolate; and Cboe’s Kevin Davitt explains the differences between equity and index options in the “Term of the Week.”

The Spread – July 2, 2021

The Spread – July 2, 2021

Finra socks Robinhood with its biggest-ever fine; Cboe acquires Chi-X Asia Pacific; OCC reports another volume gain; NIO takes its cue from options; John Lothian weighs in with his take; Looking for volatility; and Jermal Chandler explains hedging in the options “Term of the Week.”

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