Think Soros Is Right? Traders Chase 76% Returns Shorting Europe

Jun 5, 2018

Jeff Bergstrom

Jeff Bergstrom


Lead Stories

Think Soros Is Right? Traders Chase 76% Returns Shorting Europe
Yakob Peterseil – Bloomberg
Listed structured products help juice bets on stocks, forex; Double-digit coupons also possible for bears on euro project
George Soros says the euro area is in “existential danger” — and the world’s biggest banks are flogging a flurry of products to parlay his warning into tantalizing returns.

****JB: I feel like a comment including Roseanne Barr should go here but I have been advised it is still too soon.

Wall Street Hunkers Down for Summer of Rising Volatility
Natasha Doff and Sid Verma – Bloomberg
Andrew Sheets recommends neutral positioning and paring risk; Italian politics a wild card as populist coalition takes reins
Wall Street strategists have a word of warning for investors hoping to recuperate this summer after a tumultuous stretch of market trading: Don’t rest on your laurels.

****JB: We should bring back laurel wreaths for a job well done.

Volatility Trading Is A Problem
Satyajit Das – Bloomberg
Like postmodern literature that eschews conventional plot, narrative, and characters, financial markets have become increasingly abstract and remote. Volatility trading offers a good example of why this is so dangerous.

After the Bell: Dow Gains 178 Points as Risk Takes a Holiday
Ben Levisohn – Barron’s
Let’s call it the “What, me worry?” market.
Because there were certainly plenty of worries: Trade concerns with China; trade concerns with Mexico; and trade concerns with Europe. OK. Let’s call it trade concerns. And the market certainly doesn’t seem to mind right now, as the Dow Jones Industrial Average rose nearly 180 points today, and the Vix fell back under 13.

****JB: Insert Officer Barbrady from South Park telling us to move along, nothing to see here.

Political Event Risk Raises Stakes for Sudden Price Moves
Bluford Putnam and Erik Norland – CME Group
Political risk is rising – elections in Mexico, Brazil and the U.S.; a leadership battle for Japan’s ruling Liberal Democratic Party (LDP); the U.S. planning protectionist trade tariffs against China, the European Union, Canada and Mexico; a looming Brexit deadline and shifting OPEC and Russian oil production tactics, among other risks. Dates for the elections, Brexit and OPEC are known but not their outcomes, which have very different scenarios. The U.S.-initiated trade disputes ebb and flow, yet the different scenarios could move equity markets.

‘Black swan’ worries resurface on Deutsche Bank stumbles; Sceptics say bank’s myriad problems unlikely to pose systemic threat
William Watts – Financial News
Just when stock-market bulls thought it was safe to go back in the water after Italy’s political crisis stirred a bout of global turmoil, some wary investors and market watchers are ringing alarm bells over Deutsche Bank.

Exchanges and Clearing

Intercontinental Exchange Names Betty Liu Executive Vice Chairman Of The New York Stock Exchange; NYSE to Acquire Radiate, Inc; Entrepreneur and trailblazing journalist will build a community for the NYSE’s network of global leaders, listed companies and entrepreneurs
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Betty Liu, an award-winning business journalist and entrepreneur, is joining the New York Stock Exchange as Executive Vice Chairman. Her appointment takes effect July 9. Liu will also join the NYSE Group Board.

A stock exchange behemoth is quietly powering crypto markets across the world
Frank Chaparro – Business Insider
Nasdaq may not have launched its market for bitcoin futures yet, but it has been quietly powering crypto markets across the world.

Intercontinental Exchange Reports May Statistics
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported May 2018 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at in the Monthly Statistics Tracking spreadsheet.
May Highlights Include:

  • Record Total Futures and Options volume of 11.3 million contracts on May 29
  • Record Total Interest Rate volume of 7.8 million contracts on May 29
  • Record Oil ADV of 2.0 million contracts
  • Record Gilt ADV of 339 thousand contracts
  • Emissions ADV up 96% y/y
  • European Natural Gas ADV up 27% y/y
  • Total Ags & Metals ADV up 18% y/y
  • Euribor ADV up 79% y/y
  • Sterling ADV up 56% y/y
  • MSCI ADV up 36% y/y; FTSE ADV up 15% y/y
  • Equity options ADV up 42% y/y


Euronext Announces Volumes for May 2018
In May 2018, the overall average daily volume on derivatives reached 644,963 contracts, up +24.5% compared to May 2017, and up +12.4% compared to the previous month. In detail:
the average daily volume on equity index derivatives reached 222,156 contracts, down – 0.3% compared to May 2017, and up +6.0% from the previous month,

  • the average daily volume on individual equity derivatives reached 359,306 contracts, up +38.0% compared to May 2017, and up +17.9% from the previous month,
  • the average daily volume on commodities derivatives reached 63,501 contracts, up +81.6% compared to May 2017, and up +6.6% from the previous month.
  • At the end of May 2018, the overall average daily volume on Euronext derivatives stood at 601,259 contracts (+13.1% compared to the end of May 2017). For the first time since 2013, Euronext has reached 20 million contracts of open interest at this time of the year, up at 20,402,408 (+34.7% compared to the end of May 2017).


Regulation & Enforcement

Hedge Fund Sues MiMedx Over Short-Selling Claims
Anders Melin – Bloomberg
Hedge fund Sparrow Fund Management LP said in a lawsuit it was falsely accused by MiMedx Group Inc. of trying to illegally manipulate the biotech firm’s stock price.
MiMedx accused Sparrow of being part of a conspiracy of short sellers and publishing disparaging statements under the pseudonym Aurelius Value, despite knowing the claims had no merit, according to Sparrow’s defamation suit filed Monday in Manhattan federal court.

US derivatives regulator moves to ease swaps dealer rules
Kadhim Shubber – Financial Times
The US derivatives regulator is planning to cement a threshold at which swap dealers become regulated, a move that would exclude smaller companies from rules that would be subject to tougher supervision.
The Commodity Futures Trading Commission agreed to vote on rules that would permanently set the threshold at which swap dealers in the US must register to $8bn of notional swap trading over 12 months.


TTG Capital Ltd Contracts with Trading Technologies to Use the TT Platform
Trading Technologies
TTG Capital Ltd (TTG), a leading London-based global proprietary trading group, and Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, today announced TTG has contracted with Trading Technologies to use the TT futures trading platform. In doing so, TTG will further scale its business and infrastructure technology with access to all TT features and technology, including Autospreader, ADL, charting, functionality for options trading and analytics, and connectivity to all TT-supported markets through TT’s global network of colocated data centers.

Goldman Sachs has ‘more engineers than bankers’ in some divisions, says chairman; Jose Manuel Barroso said at Money 20/20 in Amsterdam this week that Goldman Sachs is hiring professionals in artificial intelligence.
Jon Watkins – The Trade
Goldman Sachs now has more engineers than bankers in some of its divisions due to an increasing focus on technology, according to its chairman Jose Manuel Barroso.


DTCC Adds Two New Members to Board of Directors
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade infrastructure for the global financial services industry, today announced the election of two new members to its Board of Directors during the firm’s Annual Shareholders Meeting. The new directors are Claudine Gallagher, Americas Regional Head for the Securities Services business of BNP Paribas, and Joseph Molluso, Executive Vice President and Chief Financial Officer of Virtu Financial.


Optimism drives farmer sentiment higher; Producers weigh-in on farm bill and crop insurance
CME Group
Agricultural producer sentiment rose last month to its highest level since January 2017, as producers expressed an improved view of current conditions and future expectations of the U.S. agricultural economy, according to the Purdue University/CME Group Ag Economy Barometer.
The May barometer reading of 141 was 16 points higher than April. The rise in the barometer, a sentiment index derived from a monthly survey of 400 agricultural producers across the U.S., was driven both by producers’ improved view of current conditions in the production agriculture sector and, especially, their more optimistic view of the future.

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Past Newsletters

The Spread – July 30, 2021

The Spread – July 30, 2021

Earnings season in full bloom; Options lead year-to-date derivatives volume; Robinhood’s IPO; John gets real with Get Real VR: Conflicting factors underpin volatility; Cboe cleared for fall European competition; and the Cboe Options Institute’s Kevin Davitt talks about vega in this week’s “Term of the Week.”

Charles Farra – The Path to Electronic Trading Has Many Steps and Flights

Charles Farra – The Path to Electronic Trading Has Many Steps and Flights

For Charles Farra, there were many steps on the path to electronic trading that saw him start as a runner for Cargill Investor Services in 1981 and work his way up in the organization. He would serve the firm in Chicago, London and Tokyo during a time when new products and big markets led to incredible growth in the futures industry.

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.”

Ed Tilly: Opportunities at Cboe Global Markets – MWE World of Opportunity

Ed Tilly: Opportunities at Cboe Global Markets – MWE World of Opportunity

Cboe Global Markets Chairman, President and Chief Executive Officer Ed Tilly sat down with John Lothian News over Zoom for the MarketsWiki Education World of Opportunity series to discuss current opportunities at the Cboe as the exchange operator continues to expand globally. He also talked about how Cboe is responding to increased retail investor demand. He noted opportunities are still available on the trading floor and mused about what he would do if he were starting his career today.

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