Traders Ready in Case Stocks Start to Swing

Apr 3, 2024

Observations & Insight

In a recent interview conducted by The Options Insider with Cboe Global Markets‘ Head of Global Derivatives Catherine Clay, topics explored included the future trajectory of 0 Days to Expiration (0DTE) options and the feasibility of introducing 1-day VIX trading. The conversation also touched on the necessity of launching cash-settled equity options prior to Tesla and Nvidia 0DTE options, the status of options on bitcoin ETFs, and the potential arrival of tradable dispersion products. Furthermore, Clay shed light on CBOE’s role in reintroducing variance to the market, hinting at forthcoming developments in the derivatives landscape. ~JJL

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Options Discovery Episode 31: Technical and Fundamental Analysis in Options; Bret Kenwell, Options Analyst at eToro, Discusses This and More With JLN’s Asma Awass.
JohnLothianNews.com

In this episode of Options Discovery, Asma Awass discusses technical and fundamental analysis in options. This episode includes a breakdown of why price movements are essential to technical analysis and why intrinsic value is the main indicator in fundamental analysis. Asma then sits down with Bret Kenwell, an options trader at eToro, who shares more insight into these two types of analysis. You can check out eToro here: https://www.etoro.com/en-us/

Watch the video »

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Technical and Fundamental Analysis in Options; Bret Kenwell, Options Analyst At eToro, Discusses Options Analysis Strategies In This Options Discovery Full Interview
JohnLothianNews.com

In this Options Discovery full interview, Asma Awass speaks with Bret Kenwell, an Options Analyst at eToro. Bret addresses a variety of topics from his career, including his background in financial journalism. He gives more insight into the different kinds of technical analysis, technical indicators, and price trends. Bret also talks about the basics of fundamental analysis and the influencers behind it. You can check out eToro here: https://www.etoro.com/en-us/

Watch the video »

Lead Stories

Traders Ready in Case Stocks Start to Swing; Investors Position For Black Swan Event Over A Slight Pullback
David Gura and Alexander Sugiura – Bloomberg
With the stock market hitting record highs, many are wondering if it will continue to soar or come crashing down. One way to tell what’s on the mind of investors is to look at the options market. Bloomberg’s Carly Wanna tells host David Gura that average daily call volume on the VIX, often called the “fear gauge,” was up in the first quarter.
/jlne.ws/3PMosoi

Short Sellers’ Activity Surges in US Stocks, Goldman Data Show; Tech stocks made up 75% of net selling last week: Goldman; Data signal hedge funds are starting to fight S&P 500 rally
Michael Msika – Bloomberg
Short selling on individual US-listed stocks is at its highest level in six months, with shares in the tech, telecom and media sector among the most targeted, according to Goldman Sachs Inc. data.
The increase in short positions comes after a powerful 9% first-quarter advance for the S&P 500, with the most number of record closing highs since 2017. The data signals that some hedge funds using long-short equity strategies have started to fight the rally.
/jlne.ws/3vKJeh9

Turmoil in India’s exchange-traded FX options on forced position unwinding
Nimesh Vora – Reuters
Indian rupee’s exchange-traded options went into a tizzy on Wednesday after brokers asked clients to submit proof of underlying exposure on their derivative contracts or unwind their existing positions, three market participants said.
/jlne.ws/3U08VDU

Exchanges

CCP Global – The Global Association of Central Counterparties welcomes Cboe Clear Europe as a CCP Global Observer Member
CCP Global
At the monthly CCP Global Executive Committee Meeting in March 2024, the Executive Committee accepted Cboe Clear Europe as an Observer Member of CCP Global. Cboe Clear Europe is a leading pan-European central counterparty (CCP) that provides safe and efficient clearing and settlement services throughout Europe. “We are delighted to welcome our newest member, Cboe Clear Europe. Over the years, Cboe Clear Europe has increased its footprint and business mix in an impressive manner, including their growing CCP activities. Our membership warmly welcomes this important institution to our community, and we look forward to great collaboration with them. ” said Teo Floor, CEO of CCP Global.
/jlne.ws/3PMCB4J

BMO Launches New Structured Outcome ETF, Now Trading on Cboe Canada
Business Wire
Cboe Canada is pleased to welcome return issuer, BMO Asset Management Inc. for the launch of a new Structured Outcome ETF. Now trading on Cboe Canada under the symbol ZAPR, the new fund seeks to provide unitholders with income and appreciation (before fees, expenses and taxes) that matches to the extent possible the return of an index designed to measure the large-cap segment of the US equity market (the “Reference Index”) up to a cap (before fees, expenses and taxes), while providing a buffer against the first 15% (before fees, expenses and taxes) of a decrease in the market price of the Reference Index, over a period of approximately one year from the first business day of April of each year to on or about the last business day of March of the following year, referred to as the Target Outcome Period.
/jlne.ws/3U0fwOH

Intercontinental Exchange Reports March and First Quarter 2024 Statistics
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today reported March 2024 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet. “For over two decades, ICE has been building a global network of products across commodities and financial markets to deliver comprehensive risk management solutions for our customers as well as round the clock price transparency and capital efficiencies,” said Benjamin Jackson, President, at ICE.
/jlne.ws/3vrlJKc

LME Data Highlights Q1 2024
LME
In Q1 2024, LME volumes surged with overall average daily volume (ADV) up 31% year-on-year, and market open interest (MOI) up 21%. Particularly strong growth was seen in LME Lead, with ADV at a record high of 83,431 lots in March 2024 – and up in Q1 by 48% year-on-year. LME Nickel ADV increased 75%, with MOI up 47% compared to the same period in 2023.
/jlne.ws/3xmzRoy

Successful completion of the migration of Borsa Italiana to the Optiq trading platform
Euronext
Euronext, the leading pan-European market infrastructure, today announced the successful completion of the migration of Italian derivatives trading to Optiq, the third and final phase in the migration process of Borsa Italiana’s markets onto Euronext’s state-of-the-art, proprietary trading platform Optiq . This migration is the last in the ambitious integration plan of Italian markets onto the Euronext single trading platform, and was completed less than three years after the acquisition of the Borsa Italiana Group.
/jlne.ws/3xwo7zC

Regulation & Enforcement

Missing the Big Point on FCM Concentration and Systemic Risk
Streetwise Professor
The increasing concentration of the futures commission merchant (FCM)/clearing broker business has been a pronounced feature of the world derivatives markets in recent years. This has raised concerns among at least some regulators, including CFTC commissioner Summer K. Mersinger. In a speech generally rah-rah-ing clearing mandates, Commissioner Mersinger did raise one discordant note. Specifically, implementation of the Basel III standards would contribute to further concentration in the FCM/CB space: Second, the Basel III Endgame Proposal would weaken the clearing system by exacerbating the downward trend in the number of entities offering client clearing services. In January 2004, there were 177 futures commission merchants (“FCMs”) registered with the CFTC. Twenty years later, as of January 2024, there are 62 FCMs registered with the CFTC, representing a 65% decline. But over the same period, there has been a dramatic increase in customer funds held at FCMs to support derivatives trading. In January 2004, FCMs held over $87 billion of customer funds. Today, that smaller number of FCMs is holding five-and-a-half times that amount of customer funds-$490 billion. And of that customer money, approximately 60% is concentrated in the top five FCMs. [Footnotes omitted.]
/jlne.ws/3xnQGQ0

***** The always interesting Streetwise Professor with a good dose of “I told you so.”~JJL

Technology

TradeStation Securities Collaborates with OptionsPlay to Enhance User Experience with Cross-Platform Integration; Integration allows TradeStation Securities brokerage clients to trade options directly from the OptionsPlay platform
TradeStation Securities, Inc.
TradeStation Securities, Inc. (“TradeStation Securities”), an award-winning,* self-clearing online brokerage for trading stocks, ETFs, options and futures, today announced it is the first broker integration by OptionsPlay, an options analysis suite for investors and traders.
/jlne.ws/3xjAuPN

Owner of Crypto Platform CoinSwitch Launches Stock Trading App
Sidhartha Shukla – Bloomberg
The owner of Indian cryptocurrency exchange CoinSwitch is launching a stock trading app as digital-asset volumes languish following a punitive tax regime introduced two years ago. PeepalCo on Tuesday announced the launch of Lemonn, which will initially offer equities trading and over time be expanded into product areas like mutual funds and derivatives.
/jlne.ws/3VJ8Q8N

Strategy

Rate Cuts
Cboe (Video)
Tim Biggam @Delta_Desk covers rate cut expectations, $VIX futures term structure, 15-day straddle and more in today’s #Vol411.
/jlne.ws/49h1OLG

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