Traders Wait Until The Final Minutes To Execute Orders
John D’Antona Jr. – Traders Magazine
It’s 3:45 p.m. The day is almost done; just a few more trades to do. Do you know where your order is?
Increasingly, traders are waiting until the final 15 minutes of the day to trade. Liquidity is more plentiful. Spreads are tighter. Volatility is lower compared with the open. Thus, trading is cheaper and liquidity at its highest.
Two More Ways to Gauge Volatility
Adam Warner – Schaeffer’s Investment Research
If it feels like the market is churning a bit, well … that’s because it’s churning a bit. The 10-day realized volatility in the S&P; 500 Index (SPX) sits at an ungodly low level of 4.7 right now.
No, that’s not a typo. We’re moving at a pace of less than 5 volatility. Just for frame of reference, 16 volatility equates to slightly greater than a 1% range in a given day.
S&P; 500 Climbs Above 1,700 on Stimulus Bets, Economy
Lu Wang and Nick Taborek – BloombergBusinessweek
U.S. stocks rallied, sending the Standard & Poor’s 500 Index above 1,700 for the first time, after central banks vowed to maintain stimulus and data on global manufacturing beat forecasts.
Commodity market volatility set to rise
Jamie Chisholm – Financial Times
Implied volatilities data are low by historical standards
FOA members’ vote paves the way for affiliation with FIA
Press Release (FOA)
Members of the Futures and Options Association (FOA) voted yesterday in support of a special resolution to adopt new articles of association which pave the way for the affiliation of the Association with the Futures Industry Association (FIA) under one global structure and brand called FIA Global, and the change of name to FIA Europe.
Videocast: Battle over 13 line in VIX
Derivatives provide NYSE brightspot ahead of ICE merger
Helen Bartholomew – International Financing Review
Derivatives trading proved to be a top performer for NYSE Euronext in the second quarter, delivering a 7% year-on-year revenue increase and underscoring the vital role that derivatives are set to play in an agreed US$8.2bn takeover by IntercontinentalExchange in both the trading of listed contracts and clearing of over-the-counter swaps.
MetLife profit plunges on derivative losses
MetLife Inc’s second-quarter profit plunged 80 percent due to derivative losses but still managed to beat analysts’ estimates as operating earnings increased in the company’s retail insurance business.
Stock market’s dark side expands to three year high in July
Jacob Bunge – The Wall Street Journal
Stock trading activity on private, electronic venues like “dark pools” reached its highest level in more than three years in July – and by some measures its highest level ever.
OCC Announces Cleared Contract Volume Increased 6% in July as Securities Leading Activity Rose 53%
Press Release (OCC)
OCC announced today that total cleared contract volume in July reached 328,899,421 contracts, representing a 6 percent increase from the July 2012 volume of 309,599,417 contracts. OCC’s year-to-date total contract volume is up 3 percent with 2,471,194,347 contracts in 2013.
VIX Futures Trading Volume Rose 53% In July
Press Release (CBOE)
The CBOE Futures Exchange, LLC (CFE) announced today that July 2013 trading volume for futures on the CBOE Volatility Index (VIX) increased 53 percent over July 2012, while year-to-date volume through the end of July has nearly surpassed the total volume for all of 2012.
BATS Chi-X Europe, BATS U.S. Options Set Monthly Market Share Records in July
Press Release (BATS)
BATS Global Markets (BATS) today reported that BATS Chi-X Europe set seven monthly market share records in its second month as a Recognised Investment Exchange while BATS Options recorded its best month with 4.3% market share.
TMX Group Profit Tops Estimates as Listing Fee Revenue Rises
Eric Lam – BloombergBusinessweek
Options trading in the Montreal Exchange rose 2 percent compared with the same period last year, Kloet said…
Trading volume for TMX’s Boston Options Exchange slumped 40 percent in the quarter due to a decrease in market activity and shrinking market share, Kloet said.
CME Group Net Income Rises 27% on Currencies and Metal Trades
CME Group Inc., the world’s largest futures market, said second-quarter profit rose 27 percent compared with the year-earlier period as record foreign exchange and metals trading helped boost volume. Net income climbed to $311 million, or 93 cents a share, from $245 million, or 74 cents a share, a year earlier, Chicago- based CME Group said today in a statement distributed by PR Newswire. The company was expected to earn 90 cents per share, according to an analyst survey conducted by Bloomberg.
Average daily volume of 6.8 million contracts at Eurex Group in July
Press Release (Eurex)
In July 2013, the international derivatives markets of Eurex Group recorded an average daily volume of 6.8 million contracts (July 2012: 8.1 million). Of those, 4.6 million were Eurex Exchange contracts (July 2012: 5.7 million), and 2.2 million contracts (July 2012: 2.3 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 106.9 million contracts were traded at Eurex Exchange and 48.7 million at ISE.
‘The most dishonest bankers walk away with the most money’
A former trader speaks about the ‘mesmerising’ trading floor and the sense of competition that pervaded everything.
**Not options related but a very interesting read and insight into trading floor culture. -JB
REGULATION & ENFORCEMENT
Exchanges Protest New Rules on System Breakdowns
Jacob Bunge – The Wall Street Journal
U.S. stock- and options-exchange officials this week objected to proposed regulations designed to clamp down on trading-system breakdowns, warning the proposal was overly broad and would drive up costs.
SEC fines investment managers for best execution failures
An SEC investiga
tion found New York-based investment advisory firm AR Schmeidler & Co (ARS) and Indianapolis-based Goelzer Investment Management (GIM), did not correctly analyse trades to ensure transactions were executed at the best price possible.
SEC Adopts Madoff-Inspired Rules to Protect Broker-Held Assets
Dave Michaels – BloombergBusinessweek
Brokers who hold investors’ assets will have to file quarterly reports attesting to compliance with measures to protect customer money and securities under rules adopted by the U.S. Securities and Exchange Commission.
TT Offers Solution for Broker Solvency Risk
Dan Collins – Dan Collins Report
When market disruptions occur there is a type of forensic accounting the happens to try and determine what happened and lists of recommendations for best practices are created to try and prevent another such event from repeating itself. This Monday morning quarterbacking happens throughout the industry affected and also includes regulatory changes.
Hedging Against Complacency
Stephen J. Solaka – Barron’s
The old Wall Street adage of buying fear and selling greed is a proven and profitable strategy in the equity markets. When there is blood in the streets, steel-nerved traders and investors capitalize on the fear of the crowds to buy stocks cheaply. And when the roses are in bloom, they take the opportunity to sell to those who were fearful at the bottom.