Welcome to The Spread, I’m Matt Raebel.
You know, when I think about options trading, I don’t really tend to think of Michael Bolton – at least, I didn’t used to. He apparently dropped a new single last week called, “Break Up With Your Brokerage.” Now, before you say anything, you should know that the song seems to be about breaking up with Robinhood specifically, with such classic lines as, “tell me who you sell my trades to.” I’d sing you a sample, but whenever I try to sing in Michael Bolton’s voice, it always comes out sounding like Kermit the Frog. Anyway…
While testifying Tuesday at a confirmation hearing before the Senate Banking Committee, Gary Gensler said one of his focuses as the new head of the SEC will be to address the “gamification” of certain trading apps – not that he mentioned any names – *cough *Robinhood* cough* – excuse me.
While that was going on, stock for Rocket Companies, the parent company of Quicken Loans, shot up like…well, like a rocket Tuesday, hitting an all-time high before tumbling back down, with some calling it “GameStop-esque.”
As was the case with GameStop a few weeks ago, Rocket’s stock was heavily shorted and as such, there was a lot of scuttlebutt about trading the stock on the Reddit community WallStreetBets around the time the stock spiked. I looked into it myself, and I did find a lot of posts about the stock Tuesday. If Gensler really intends to address the changes to the markets caused by traders on apps like Robinhood, he may inevitably have to address activity on online communities like the ones on Reddit.
The OCC announced Tuesday that cleared contract volumes in February 2021 were the second-highest on record, with January 2021 being the highest. The trading boom that started last year is showing no signs of slowing down, and neither is the OCC. Year-to-date average daily cleared contract volume was up more than 61 percent compared with the same time last year, and total exchange-listed options cleared volume increased 47 point four percent compared with February 2020.
I asked Phil Mackintosh, chief economist over at Nasdaq, for his key takeaways from 2020, as well as what to expect from 2021. I turned the interview into a podcast that you can listen to on John Lothian News dot com. We’ve also got a new report by JLN Editor Thom Thompson about policy issues facing the cannabis industry this year. Check those out on our site, John Lothian News dot com. That’s gonna do it for The Spread this week – until next time, stay safe, and happy trading.
Michael Bolton – Break Up With Your Brokerage | Public.com
Gary Gensler Says Scrutinizing Trading Apps Would Be Focus at SEC
Benjamin Bain and Robert Schmidt – Bloomberg
Rocket shares soar more than 70% as analysts eye ‘GameStop-esque’ short squeeze
Sinéad Carew – Reuters
Rocket Stock Is the New Meme Trade. Move Over, GameStop.
Orla McCaffrey – WSJ
Rocket Falls as RBC Suggests Reddit-Driven Rally Is Overdone
Paul Jarvis, Suzannah Cavanaugh, and Felice Maranz – Bloomberg
(Content warning: language) RKT Megathread for March 2nd, 2021
Reddit – /r/WallStreetBets
OCC February 2021 Total Volume Up 45.6 Percent from a Year Ago
Cannabis To Face Big Policy Issues In 2021
Thom Thompson – JLN
Looking Back On 2020 With Phil Mackintosh, Chief Economist At Nasdaq
Matt Raebel – JLN