Traders Are Flocking to Risky Zero-Dated Options.

Jul 1, 2024

Observations & Insight

Volatility Insight of the Week: Soybean Oil convexity (SOCO), which measures where options traders are positioning along the volatility curve, has reached a 4-year high. Learn more about CVOL here.


SIFMA’s Ellen Greene Discusses Key Concerns and Expresses Optimism at Options Industry Conference

Ellen Greene, managing director of equity and options market structure at the Securities Industry and Financial Markets Association (SIFMA), shared insights on key industry concerns at the Options Industry Conference in Asheville, North Carolina, in an interview with John Lothian News sponsored by the OCC.

Watch the video »

Lead Stories

Traders Are Flocking to Risky Zero-Dated Options. ‘You Can Go Completely Broke.’; Bets on market moves have taken off with these options. Stocks like Nvidia and Apple could be next.
Paul R. La Monica – Barron’s
Jin Wang has taken some wild rides as a day trader. A software product manager in Houston, he says he turned $26,200 into $73,000 one day in November 2022. On another day, he lost $20,000.

‘Roaring Kitty’ is sued for alleged GameStop manipulation
Jonathan Stempel – Reuters
Keith Gill, the investor known as “Roaring Kitty” who helped spur the meme stock mania of 2021, was sued by GameStop investors who said they lost money through his “pump-and-dump” scheme for the videogame retailer.
A proposed class action accusing Gill of securities fraud was filed on Friday in the Brooklyn, New York federal court.

BlackRock Enters Booming Market for Stock ETFs With a 100% Hedge
Emily Graffeo – Bloomberg
BlackRock Inc. is the latest asset manager to launch an exchange-traded fund that offers a way to ride the stock rally – while hedging 100% of the downside if markets plunge. The iShares Large Cap Max Buffer Jun ETF is set to begin trading under the ticker MAXJ on Monday. Using options, it will provide investors with upside exposure to the S&P 500 to a cap of around 10.6% and hedge all of the downside over a 12-month period. Such offerings may appeal to investors looking to tap into stocks’ record-setting rally even as worries mount around the outlook for growth and earnings. At the same time the Federal Reserve is signaling plans to keep interest rates elevated, while the US presidential election adds another potential wild card for markets.

Volatility Is Only Certainty for Traders Parsing French Results; Marine Le Pen’s National Rally wins first round of voting; France’s stocks and the euro rebounded, bond spread tightened
Julien Ponthus, Allegra Catelli, and Alice Gledhill – Bloomberg
Traders are preparing for another volatile week in French markets, with focus on politicians’ strategies to curb the advance of Marine Le Pen’s party in the second round of voting on Sunday.
France’s assets rebounded on Monday after the National Rally won the first round of the nation’s legislative election by a smaller than expected margin. But gains pared later as investors said uncertainty remains about whether the far-right party will secure an absolute majority that could enable and embolden its anti-immigration and euro-skeptic agenda.

Prime Broker Hidden Road Adds Major Crypto Exchanges, Expands Use of BlackRock’s BUIDL Token; Hidden Road is now integrated with Coinbase International Exchange, OKX, Deribit, Bitfinex, AsiaNext, SIX Digital Exchange and Bullish.
Ian Allison – CoinDesk
Hidden Road has expanded the use of BlackRock’s BUIDL token by accepting it as collateral across its network. In addition to the new crop of exchanges, liquidity providers B2C2, IMC and Laser Digital, and software vendors Talos and TT have also joined Hidden Road. Hidden Road, a global credit network for institutions that includes trading in digital assets, said it added a clutch of major exchanges to its prime brokerage platform. It also expanded the use of BlackRock’s BUIDL token by accepting it as collateral across its network. The company is now integrated with Coinbase International Exchange (following a tie-up with Coinbase Exchange in 2022), OKX (including Nitro Spreads), Deribit (including options), Bitfinex, Bullish (the owner of CoinDesk), AsiaNext and SIX Digital Exchange, the company said in a press release on Monday.

Hedge-Fund Whales Rocking Latin America Are Exposed in Mexico
Vinícius Andrade and Michael O’Boyle – Bloomberg
Early in the morning of June 7, interest-rate futures spiked wildly in Mexico. All week long, they had held steady even as the peso plunged in the wake of the ruling leftist party’s landslide election victory. But now, the selloff was suddenly spilling into the rates market. As yields soared throughout that day – over a quarter percentage point on some contracts – word spread quickly across trading desks in Mexico City: “It’s the Brazilians.”


CME Group Launches €STRWatch to Help Clients Manage Risk Around ECB Policy Decisions
CME Group
CME Group, the world’s leading derivatives marketplace, has today launched €STRWatch, which enables clients to understand the potential impact of ECB rate decisions on futures settlement prices and builds on the success of CME Group’s FedWatch, SOFRWatch and TreasuryWatch tools.
Using €STRWatch, clients will be able to analyze their expectations of the impact of ECB policy decisions in upcoming meetings, providing a view of where CME Group €STR futures prices could settle if their expectations prevail. Given the high correlation between the ECB’s deposit facility rate and the €STR rate, the tool takes into account the spread between these rates to project forward €STR rates.


4th of July
Cboe (Video)
Watch #Vol411, where Joel Hawthorne @louiswinthrop gives updates on Friday’s trading action, today’s most active $VIX and $SPX options, and economic data to look out for this week.

Pity Hedge Funds That Lost in Electricity Chaos — No, Really

Pity Hedge Funds That Lost in Electricity Chaos — No, Really

First Read Hits & Takes John Lothian & JLN Staff Rep. Jennifer Wexton (D-Va.), who has been battling a degenerative disease that has severely weakened her voice, recently introduced a new, AI-generated version of her speaking voice to her constituents, The...

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

The Spread

Past Options Newsletters

Firms launch options on swap-based Bitcoin ETF

Firms launch options on swap-based Bitcoin ETF

Observations & Insight Vermiculus Chairman Envisions Future of Exchange Tech: Microservices and AI Lead the Way In a recent interview at London's Park Plaza Westminster Hotel during the FIA's International Derivatives Week, [[Nils-Robert...

Pin It on Pinterest

Share This Story