This week on The Spread: the CME launches futures trading on the VOLQ, Eurex launches futures and options trading on two ESG indices, and more.
Produced by Mike Forrester.
Welcome to The Spread, I’m Matt Raebel. Things are heating up in the U.S. presidential race. After President Trump and the First Lady’s positive COVID diagnoses last week, the president reportedly underwent treatment for the virus developed by biotech company Regeneron, causing the company’s stock to skyrocket, surprising absolutely no one. Eurex had exciting news this week – the European exchange announced it will launch futures and options trading on the EURO STOXX 50 ESG and DAX 50 ESG indices starting the 9th of November. Both indices consist of companies that aren’t involved in weapons manufacturing, trading fossil fuel, selling tobacco products, or any other part of my typical Friday night. Despite the frenzy of options buying that’s been going on all year, implied volatility for FX options that expire further out than that has decreased recently, reported by the staff of Reuters, who argued that this implies the FX markets are expecting less volatility after the election…yeah, we’ll see about that. The CME launched futures trading on Nasdaq’s VOLQ, which measures the 30-day implied volatility of the Nasdaq-100 Index, on October 5th. Good timing, launching that a month before the election; that’s like selling pickaxes right before a gold rush. The CME’s bitcoin options had a flood of volume on Wednesday, trading $48 million worth of contracts that day. Why so much volume? Eh, who knows with bitcoin?…although it probably had something to do with the U.K.’s Financial Conduct Authority announcing a blanket ban on all cryptocurrency derivatives and other crypto-centric products in the United Kingdom, effective January of next year. Yeah, actually, that’s probably related. Before we say goodbye this week, I’ve got a favor to ask. As you may know, we care about preserving the history of the financial markets. That’s why John Lothian News has started a GoFundMe campaign to help us fund our MarketsWikiEducation projects – that includes MarketsWiki World of Opportunity, our Open Outcry History Project, and Path to Electronic Trading. If you feel so inclined, please go to John Lothian News dot com and click the link at the top left hand corner of the screen to make a donation so you can help us make it through the storm that has been 2020. While you’re there, you can check out the new content we’ve got up on our homepage, including coverage of the STA’s virtual conference by JLN’s Sarah Rudolph and Suzanne Cosgrove, as well as new podcasts by me and John Lothian. And that’s gonna do it for this week – I’ll talk to you next week, until then, stay safe and happy trading.
Trump Took Regeneron’s Covid Treatment. How to Play Its Soaring Stock With Options.
Steven M. Sears – Barron’s
Equity index derivatives: Introduction of futures and options on the EURO STOXX 50 ESG and DAX 50 ESG indexes; Eurex Circular 076/20 Equity index derivatives: Introduction of futures and options on the EURO STOXX 50 ESG and DAX 50 ESG indexes
FX options market reflects more confidence in Biden election win
VOLQ Launches on CME
Bitcoin Options Volume on CME Jumps 300% as Traders Take Bullish Bets
Omkar Godbole – Coindesk
The UK’s financial regulator bans crypto-based products for retail investors after a year-long review
Shalini Nagarajan – Markets Insider