This week on The Spread, we catch up on the last two weeks’ news, including a number of exciting updates from our friends at the OCC.
EDIT: Correction – the OCC cleared over 693 million contracts in June, not 693 thousand.
Welcome to The Spread, I’m Matt Raebel. A lot happened while we were taking a break over Independence Day last week, and I’m not just talking about all the fireworks the neighbor kids set off. We’ve got a lot to talk about today, so without further ado, let’s jump right in.
Cboe’s acquisition of EuroCCP wrapped up recently, and on July 1st the exchange announced it will launch Cboe Europe Derivatives, a new futures and options market, at its new trading hub in Amsterdam in the first half of 2021, pending regulatory approval. As for what they’ve been getting into back home – it’s time for a little shameless self-promotion. It’s been a few weeks since Cboe reopened their options trading floor, so I checked in on the world’s oldest options exchange to see what’s been going on since then. You can read about the reopening process on John Lothian News dot com.
Also, JLN’s Suzanne Cosgrove has published two stories on our site – one covering Cboe’s recent investor call, and the other an interview with Adam Inzirillo, head of U.S. equities at Cboe Global Markets.
All the big exchanges, including Cboe, reported their volumes last week and this week, of course – as did our sponsors at the OCC. Speaking of fireworks, the OCC’s volumes have really been blowing up. Cleared options volumes for June were up almost 81 percent from a year ago! The OCC cleared over 693 million contracts last month, yet again setting a new record. Is there a record for setting and breaking your own record several months in a row? Because they probably broke that one, too.
The OCC has made a number of big changes lately. In the past few weeks, they released their annual report, which looks back on 2019 and lays out their plan for the next year. You can find the link to the report in our “Sources” section below this video.
The company announced that Jennifer Baum, a compliance expert who has been working at the OCC as first VP of regulatory and corporate compliance for almost three years, has become its new chief compliance officer, taking over for Joe Adamczyk. John Davidson and Scot Warren of the OCC said in a release that Baum has been souping up the OCC’s compliance department for years, so the role seems like a natural fit for her. Congratulations to Jennifer Baum and to the OCC.
The OCC also announced that they’re taking you back to school with the launch of OCC Learning. Even if it’s been awhile since you’ve seen the inside of a classroom, it’s never too late to learn something new, right? I mean, it worked for Rodney Dangerfield! Although the OCC supports the OIC’s educational materials, they’re also looking to amp up their own educational offerings to the public with online courses, knowledge checks, podcasts, and videos to help new and veteran traders alike improve their knowledge of options trading.
And finally, the OCC announced the launch of the SEC-approved Phase III of the Financial Safeguards Framework, which was implemented on June 29. Phase I began almost two years ago, when the OCC began working with the SEC to improve its Clearing Fund allocation methodology using data from stress-testing their systems based on historical and other “extreme but plausible scenarios.” Boy, that turned out to be serendipitous! Phase III will focus on improving the resiliency of the OCCs internal systems by improving its liquidity framework and methodology, among other things.
Finally, a few announcements from JLN: MarketsWiki World of Opportunity is happening this year on July 22, and like IDX, we’re going virtual. This year we’re sponsored by the OCC and Barchart, and our speakers will include OCC’s Vice President of Talent Acquisition Andre Buckles, Chicago Federal Reserve Vice President Alessandro Cocco; author, former regulator and lawyer Eileen Flaherty, and more. It’s an especially great opportunity for students and interns looking to learn more about the industry. We know this has been a weird year for students, so we’re doing our best to help them out. You can register for the event on our website.
That’s it for The Spread this week – stay safe out there and happy trading.
Cboe to launch Dutch derivatives hub in 2021
Huw Jones – Reuters
Cboe Brings US Market Structure To European Derivatives
Shanny Basar – Markets Media
So Far, So Good – Updates From Cboe’s Options Trading Floor
Matt Raebel – JLN
OCC June 2020 Total Volume Up Nearly 81 Percent from a Year Ago
OCC Learning Is Now Live!
OCC Implements Phase III of Financial Safeguards Framework
OCC Names Jennifer Baum as New Chief Compliance Officer
OCC Financial Safeguards Framework Approved by SEC
Marketswiki Education World Of Opportunity 2020 Virtual Event Announced
John Lothian – JLN
Cboe Betting U.S.-Style Equity Derivatives Trade, Clearing Translates To Europe
Suzanne Cosgrove – JLN
Equity Volatility Aside, Market Structure Debate Back In The Fray
Suzanne Cosgrove – JLN