The Spread: A Penny Stock For Your Thoughts?

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.



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

Michael Tobin – Bloomberg

CME Expands Volatility Indexes

Traders Magazine

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

PR Newswire (press release)

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

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

Suzanne Cosgrove – JLN

The CryptoMarketsWiki Podcast Episode 17: The Ripple Effect

Matt Raebel – JLN

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

Suzanne Cosgrove – JLN


The Spread


Options Discovery

John’s Take

John’s Take: Why I hate Chuck Mackie and Thoughts on FTX’s CFTC Request

John’s Take: Why I hate Chuck Mackie and Thoughts on FTX’s CFTC Request

I have a love/hate relationship with Chuck Mackie. I love him because he is a great guy, good citizen and cheerful practitioner of solving the world’s problems with market based solutions. I hate him because he really knows how to make me work, and work hard. Don’t worry, there are others on this list too (Hello Barbara).

On Thursday Chuck emailed me and asked when I was going to write a comment letter for the FTX request to the CFTC for LedgerX LLC, doing business as FTX US Derivatives, “to amend its order of registration as a DCO to allow it to modify its existing non-intermediated model.”

Term Of The Week


Options Discovery

Options Discovery

Today John Lothian News is kicking off a new segment of The Spread called Options Discovery, hosted by Alex Teng.  In this series viewers will learn the ins and outs of options along with Alex. He will take viewers through a wide variety of topics in the options industry, aided by interviews with experts and his own research.

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