The Stock Market Has Rarely Been This Sleepy

Jun 21, 2024

Lead Stories

The Stock Market Has Rarely Been This Sleepy
Gunjan Banerji – The Wall Street Journal
It’s eerily calm out there in the stock market.
The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices tied to the S&P 500, measures expected volatility in stocks and has closed below 20, its long-term average, for 160 days now, the longest stretch since 2018, according to Dow Jones Market Data.
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The stock market’s volatility gauge remains subdued. What that may say about rest of 2024.
William Watts – MarketWatch
Despite a Thursday uptick, a closely watched measure of expected stock-market volatility remains under wraps – which isn’t a bad sign when it comes to future returns, a technical analyst noted.
The Cboe Volatility Index VIX, or Vix – an options-derived measure of expected volatility over the coming 30-day period – rose 0.98 points to 13.28 on Thursday as tech-related stocks finally took a breather amid a torrid 2024 rally. Market leader Nvidia Corp. NVDA retreated 3.5% after taking over the mantle as the world’s most valuable…
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Roaring Kitty Ditches GameStop Options, Scoops Up Stock. He Now Has a $262 Million Stake.
Connor Smith, Angela Palumbo and Brian Swint – Barron’s
GameStop stock closed higher on Thursday, and Roaring Kitty was among the buyers.
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The bull market has crushed the shorts. That leaves stocks more vulnerable to bad news, says JPMorgan.
Jamie Chisholm – MarketWatch
A roughly 7% peak to trough range in Nvidia NVDA on Thursday, which left the AI chipmaker ultimately down 3.5% on the day, is the talk of Wall Street as futures on Friday indicate a cautious start to the new session.
Does the reversal signal an end to the exuberance that saw Nvidia briefly become the world’s most valuable company, dragging many AI plays higher in its wake? Or is it just a brief bout of profit taking for a stock that momentum indicators suggested was deep in overbought territory?
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MSCI Keeps South Korea Listed as Emerging Market Amid Ban on Shorts
Youkyung Lee – Bloomberg
South Korea’s attempts to win a market upgrade from MSCI Inc. have been dealt a setback by the nation’s unexpected move last year to reimpose a full ban on the short-selling of stocks. In its annual classification review, the index provider decided to maintain South Korea’s status as an emerging market, as expected. While the nation’s efforts to reform capital markets and currency trading hours had spurred hope for an upgrade to developed status, its prohibition of a common trading strategy is still seen as a barrier.
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StanChart Plans Spot Crypto Trading Desk for Bitcoin, Ether
Emily Nicolle – Bloomberg
Standard Chartered Plc is setting up a trading desk for Bitcoin and Ether, people familiar with the matter said, making it one of the first global banks to enter spot cryptocurrency trading.
The new crypto desk is close to starting operations and will be part of the bank’s FX trading unit, two of the people said, asking not to be named discussing private information. It will be run from London, according to one person.
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India Might See Derivatives Trading Similar to Lottery: Report
Arnab Shome – Finance Magnates
The Indian derivatives market is expected to receive a jolt as the government considers labelling the head of futures and options trading “speculative income” from the existing “business income,” local media outlet Financial Express reported.
Other proposed steps include imposing a 30 percent tax deduction at source (TDS) for all futures and options transactions. Although traders can claim these deducted taxes back, they can only do so when filing the tax return in the following financial year.
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Regulation & Enforcement

SEC Chair Gensler Says UK, Other Markets Should Move to Faster Currency Settlement
Lydia Beyoud – Bloomberg
The head of the Securities and Exchange Commission is encouraging the UK and others to shorten the settlement time for currency trading to better align their markets with those in Asia and North America. The UK is debating a transition to next-day settlement, known as T+1, for securities transactions, with its Treasury calling for the shift by the end of 2027. But SEC Chair Gary Gensler is nudging the UK to go bigger by adding more asset classes for shorter settlement.
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“Shortening the Settlement Cycle: Benefitting Everyday Investors” Prepared Remarks before the Accelerated Settlement in the U.K. Conference
Chair Gary Gensler – SEC
Last month, the U.S. smoothly shortened the settlement cycle for equities, corporate bonds, and municipal securities to one day after the transaction date (T+1). This step better unifies the U.S. market structure, where Treasuries, options, and mutual funds already largely settle in one day. For everyday investors, this means you now can sell your stock on a Monday and get your cash on a Tuesday. This makes a real difference-you don’t have to wait until Wednesday. With 58 percent of American households holding stocks,[1] this is significant. This step also helped better unify the U.S. market structure, where Treasuries, options, and mutual funds already largely settle in one day.
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SEC’s AI Crackdown Signals Trickle of Cases Will Turn to Flood
Will Kubzansky – Bloomberg
A spate of recent US enforcement actions is likely just the beginning of a crackdown on companies overhyping artificial intelligence to investors. Since March, the Securities and Exchange Commission has accused three companies of so-called AI washing, or misrepresenting how they use machine learning and other tools. The moves follow multiple warnings from Gary Gensler, the agency’s chair, and the regulator’s top enforcement attorney over misstatements around the technology.
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The SEC Is Turning Its Gaze to ‘AI Washing’
David Rovella – Bloomberg
It’s AI’s turn. Since March, the US Securities and Exchange Commission has accused three companies of misrepresenting how they use machine learning and other tools-so-called AI washing. The moves follow multiple warnings from SEC Chair Gary Gensler and the regulator’s top enforcement attorney over misstatements around artificial intelligence. While Gensler has referred to AI as “most transformative technology of this generation,” he has also said it could spark a financial meltdown. Even before the recent SEC cases, the agency had proposed new restrictions for brokerages and advisers using AI. Lawyers contend the enforcement actions brought so far around AI washing are similar to those involving statements some companies made about Covid treatments and ESG.
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Technology

Trading Technologies wins Best Algo Trading Solution for TT platform at WatersTechnology Asia Awards 2024
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global capital markets technology platform provider, announced that its TT platform won the award for Best Algo Trading Solution in the WatersTechnology Asia Awards 2024. The winners were announced yesterday at an awards ceremony and reception in Hong Kong. This marks the firm’s third award this year for excellence in its TT platform, which handled 2.2 billion transactions in 2023. TT won the award for Best Listed Derivatives Trading Solution both this month at the TradingTech Insight USA Awards 2024 and in March at the TradingTech Insight Europe Awards. Last year, Trading Technologies won the Waters Rankings Award for Best Algorithmic Trading Provider, and the TT platform was named Derivatives Trading System of the Year at both the FOW Asia Capital Markets Awards and the FOW International Awards.
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******* One wonders what TT does with all this lucite. ~JJL

Strategy

Market Influence
Cboe (Video)
With it being a triple expiration Friday, Dan Deming @Djd551 covers 10-day & 30-day realized volatility, options trading activity so far today and events to watch out for next week in #Vol411.
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Miscellaneous

Why Triple-Witching Day Matters on Wall Street
Bloomberg Brief (Video)
It’s “Triple-Witching Day” again on Wall Street. About $5.5 trillion worth of options tied to indexes, stocks, and exchange-traded funds will expire, according to an estimate from options platform SpotGamma. Bloomberg’s Simon White explains why it all matters on “Bloomberg Brief.”
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Wall Street Starts Calling Time on ESG Labels After Backlash

Wall Street Starts Calling Time on ESG Labels After Backlash

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The Spread

Traders Betting on China Easing Boost Bearish Options on Banks

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Options Bulls Come Out to Play

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