The Spread: That’s a Wrap

Suzanne Cosgrove

Suzanne Cosgrove

Editor

This week on The Spread, Cboe announces new products, Massachusetts regulators file a complaint against Robinhood, and JLN says goodbye to Mike Forrester.

Produced by Mike Forrester.

 

Transcription:

Welcome to The Spread, I’m Matt Raebel. Remember last week when I said during the run-up to Christmas, usually nothing much happens? Well, there are a lot of major stories in the options world this week, and it seems we’ll have no shortage of stuff to talk about in early 2021, so I guess it’s time to eat my words. I’d rather eat Christmas ham, but that’s next week. Cboe made a couple of big announcements. First, they’ve announced a deal with digital asset market data firm CoinRoutes, which will allow the exchange to start designing indexes for digital assets. Because you knew Cboe would get back into bitcoin eventually. Second, Cboe announced that they’re going to list Mini-Russell 2000 Index Options in Q1 of 2021. They’re like standard Russell 2000 options, but one-tenth the size, you know the drill. These mini-derivatives are popular with retail investors because they’re useful when you need a scalpel rather than a sledgehammer. Personally, I wouldn’t be surprised if we see some mini or micro bitcoin derivatives in the future. Between rising open interest on bitcoin options and the price of bitcoin itself hitting all-time highs this week, it’s no coincidence cryptocurrency derivatives have been in the news and all over social media lately. Knowing crypto Twitter though, people posting obsessively about bitcoin isn’t that out of the ordinary. Honestly, I’d be more concerned if there was radio silence. And finally, Massachusetts securities regulators have filed a complaint against Robinhood, the popular trading app that’s especially popular with amateur options traders. The complaint alleges that Robinhood has “gameified” trading and failed to protect their customers and assets from themselves. Things haven’t been all fun and games for Robinhood this year, though. The SEC also charged them Thursday with providing misleading information to investors and other missteps, which they did not admit to or deny, but have agreed to settle for $65 million. It’s impressive that trading apps have gotten big enough that they’re able to throw around that kind of money; I remember when the only folks trading options with smartphones were the ones who were already good enough that they could AFFORD smartphones. That’s gonna do it for The Spread this week. I’d also like to give a quick shoutout to Mike Forrester, JLN’s camera expert, who has worked hard to edit and/or shoot every episode of The Spread. Mike is moving on to a new company, and I just want to say we’ve been lucky to have him as long as we did, and we wish him all the best. Be sure to check out John Lothian News dot com for more news, musings and occasional malarky. Excluded from the latter category is a new interview with Eurex’s Randolph Roth, who discussed the future of Eurex’s MSCI offerings. Until next time, stay safe and happy trading.

Sources:

Cboe to launch crypto indices following major data deal with CoinRoutes
Annabel Smith – The Trade
http://bit.ly/3mqZCIW

Cboe Options Exchange to List Mini-Russell 2000 Index Options in First Quarter 2021
Cboe
https://bit.ly/3r7dkoc

Bitcoin options’ daily trading volume crosses $1 billion as bitcoin surges above $23,000
Yogita Khatri – The Block
http://bit.ly/3p1xLAO

Massachusetts Regulators File Complaint Against Robinhood
Caitlin McCabe – WSJ
http://on.wsj.com/37lVshg

Robinhood Pays $65 Million to End a Key Probe, But Others Fester
Robert Schmidt and Matt Robinson – Bloomberg
http://bloom.bg/2WvatqN

SEC Charges Robinhood Financial With Misleading Customers About Revenue Sources and Failing to Satisfy Duty of Best Execution
SEC
http://bit.ly/34opaQZ

Eurex’s Randolf Roth Talks MSCI With JLN
John Lothian – JLN
https://bit.ly/38gZ5nR

 

 

John Lothian Newsletter

Today’s Newsletter

Crypto Nomads: Surfing the World for Risk and Profit

Crypto Nomads: Surfing the World for Risk and Profit

First Read $51,906/$300,000 (17.3%) ++++ Hits & Takes John Lothian & JLN Staff The STA is holding the 88th Annual Market Structure Conference in person on October 6-8 at the JW Marriott in Washington, DC with the title "The Great Return." That is a very good...

We visit more than 100 websites daily for financial news (Would YOU do that?)

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.”

Pin It on Pinterest

Share This Story