This week on The Spread, the Senate Banking Committee scrutinizes retail trading apps, a proposal is filed with the SEC for an ETF that lets investors bet on FOMO, and more.
Welcome to The Spread, I’m Matt Raebel.
The Senate Banking Committee voted 14-10 in favor of sending the nomination of Gary Gensler, the Biden administration’s pick for the new head of the SEC, to the Senate floor for confirmation. Gensler previously had a stint as the head of the Commodity Futures Trading Commission between 2009 and 2014. Gensler’s nomination still needs to be confirmed, but it sure looks like he’s set to be the new guy.
Speaking of the Senate Banking Committee, a hearing was held Tuesday on the Senate floor to discuss the impact that trading platforms like Robinhood are having on the markets, as well as the economy at large, especially in light of the recent meteoric rise of GameStop stocks, and heightened volatility fueled by retail traders.
One of the hot-button issues debated at the hearing was payment for order flow, which is when market makers pay brokers for their order flows – which is how Robinhood makes a lot of its money. Democrats argued that it creates an unfair conflict of interest and should be illegal, while Republicans argued that if payment for order flow was illegal, zero-commission trading would become a thing of the past. One thing’s for sure: this will continue to be a hotly debated topic for a while.
In other news, if approved, a new ETF will literally trade under the ticker symbol FOMO. The proposal was filed this week with the SEC by Connecticut-based Tuttle Tactical Management LLC. To my non-millennial or Gen Z audience members, FOMO stands for Fear Of Missing Out. The actively managed ETF will target specific stocks, SPACS, derivatives – any investment product that could be considered an emerging trend. The filing says that frequent trading of FOMO may result in “a high portfolio turnover rate.” Ain’t that the truth?
Tuttle Tactical Management is reportedly also working on something called the Fat Tail Risk ETF, a more conservative fund meant to be a kind of hedge for FOMO that focuses on things like gold and Treasuries.
Check out John Lothian News dot com for more news and musings; we’ve got a new article written by John Lothian about sending his oldest son and his friends to Hogwarts – not literally, you’ll have to read the article to see what I mean. We’ve also got an interview by John with Ram Vittal, CEO of Marex North America, an article written by me about a VIX-like bitcoin volatility index executing its first options trade, and an article by Suzanne Cosgrove about climate-friendly investment. That’s it for The Spread this week – stay safe and happy trading.
Gary Gensler, Biden’s Pick to Head SEC, Approved by Senate Committee
Paul Kiernan – WSJ
Senate probes Robinhood business model at GameStop hearing
Chris Matthews – MarketWatch
A New ETF Named FOMO Targets Everything From SPACs to Volatility
Sam Potter – Bloomberg
A new ETF called FOMO aims to invest in market trends including SPACs, derivatives, and volatility
Isabelle Lee – Markets Insider
Harry Potter – Sending My Oldest Son and His Friends to Hogwarts
John Lothian – JLN
Ram Vittal – John Lothian News Zoom Interview
John Lothian – JLN
BitVol, A “VIX-Like” Volatility Index for Bitcoin, Makes Its First Trade
Matt Raebel – JLN
Net-Zero Commitment ‘Not Concessionary’ Amid Climate Transition
Suzanne Cosgrove – JLN