U.S. Stock-Index Futures Drop; Masayoshi Son’s Personal Stake in SoftBank Trading Unit Draws Fire

Nov 10, 2020

Observations & Insight

$14,991/$300,000 (5%)


Today is the first day of FIA EXPO-V. EXPO is normally held in Chicago at the Hilton on Michigan Avenue. This year, it is being held in cyberspace and the FIA has put together a great program. As a reminder, I have some free passes to give away. Just email me at johnlothian@johnlothian.com and I will set you up.

The JLN team is being deployed across the EXPO-V program and will provide coverage of the different sessions and panels presented. If there are some speakers or industry leaders who would like to do a video interview after their panels with JLN, please reach out to me. We can conduct the interview over Zoom and publish it right here in JLN.

EXPO’s social events are normally the largest cocktail parties I ever go to, but this year we are keeping it safe. We will catch up soon enough. Enjoy EXPO and stay safe!


MR: Miami International Holdings announced its trading results for October 2020 on Monday. The exchange group reports that it traded 73,320,613 options contracts, a 75.5 percent increase in options trade volume from October 2019, and an 83.5 percent increase in traded options average daily volume (ADV), which was 3,332,755. Volumes were generally down from September, but this was the case for the rest of the equity options industry as well.


The Spread: Plenty of Options

This week on The Spread – record-high options trading volumes, new products from Intercontinental Exchange and HKEX, and more.

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Lead Stories

U.S. Stock-Index Futures Drop; Volatility Keeps Traders on Edge
Heejin Kim – Bloomberg
U.S. stock-index futures traded lower as investors assessed the prospects of a stimulus bill, a potentially bumpy transition of power in the White House and the advance of a large-scale coronavirus vaccine study.
December contracts on the S&P 500 were down 0.2% at 12:38 p.m. in London, after rising as much as 0.5%. Futures rose 0.7% on the Dow Jones Industrial Average, while those on the Nasdaq 100% declined 1.6%. The Cboe Volatility Index, which moves in the opposite direction of the equity benchmark about 80% of the time, increased Monday for the first time this month.

Masayoshi Son’s Personal Stake in SoftBank Trading Unit Draws Fire
Pavel Alpeyev – Bloomberg
SoftBank poured about $20 billion into stocks and derivatives; Son owns one third of the unit responsible for trading
SoftBank Group Corp.’s already controversial stock and options trading program is drawing fresh fire from investors because of Masayoshi Son’s personal stake in the trading. Son faced a barrage of questions about the transactions on a late-evening call with analysts and fund managers after an earnings announcement Monday, according to people who took part in the briefing. SoftBank has poured about $20 billion into tech stocks and derivatives through a unit in which the billionaire personally holds a one-third stake.

Volatility in U.S. stocks rebounds as some investors take profits on value rally
April Joyner – Reuters
Brightening prospects for a COVID-19 vaccine and greater clarity on the outcome of the U.S. presidential election have not dimmed expectations for volatility in U.S. stocks.
The Cboe Volatility Index .VIX, known as Wall Street’s “fear gauge,” reversed course on Monday to end higher, at 25.75, after having reached its lowest level since August.

The S&P 500’s medium-term picture is bullish — as long as this one thing doesn’t happen
Lawrence G. McMillan – MarketWatch
Election-related or not, the move from the bottom to the top of the S&P 500 index’s trading range in just four trading days (Nov. 2 through Nov. 5) was impressive, and now a massive upside breakout on COVID vaccine-related news has seen the index gap to new all-time highs by a wide margin.

Exchanges and Clearing

ICE Clear Credit rolls out clearing for CDS index options
Annabel Smith – The Trade
US exchange group ICE has launched clearing of credit default swap (CDS) index options via ICE Clear Credit in a bid to further standardise the marketplace. ICE Clear Credit has rolled out clearing of CDS index options based on CDX North American investment grade and high yield indices, with plans to add index options based on the?iTraxx?Europe indices at some point in the next year.

Miami International Holdings Reports October 2020 Options Trading Results for MIAX Exchange Group; Year-to-Date Market Share up Approximately 21% from 2019
Miami International Holdings (MIH)
Miami International Holdings, Inc. (MIH) today reported October 2020 options trading results for its three securities exchanges – MIAX, MIAX PEARL and MIAX Emerald (together, the MIAX Exchange Group). The MIAX Exchange Group collectively executed over 73.3 million equity option contracts in October for a combined average daily volume (ADV) of 3,332,755 contracts, representing a total U.S. equity options market share of 12.26%.

Edu-Futuro Selects OCC as its Corporate Partner of the Year for 2020
Edu-Futuro recognized OCC as its Corporate Partner of the Year during their 22nd-anniversary virtual gala celebration on Friday, November 6. This year’s theme, Against All Odds!, brought together more than 300 individuals from the academic, governmental and corporate worlds, including elected officials, diplomats, school board members and administrators. Together we celebrated the hard work, dedication and academic success of Edu-Futuro’s Emerging Leaders Program students as well as the resilience of their families through these unprecedented times.

Regulation & Enforcement

A proposal to amend The Nasdaq Options Market Rules at Options 4, Section 3, Criteria for Underlying Securities, Options 4, Section 5, Series of Options Contracts Open for Trading, and Options 4, Section 6, which is currently reserved, to relocate certain rule text and make other minor technical amendments.


Popular Trading Platforms Sideline Users With Technical Difficulties as Stocks Surge
Caitlin McCabe and Mischa Frankl-Duval – WSJ
Customers of popular online brokerages struggled to trade from their accounts Monday, sidelining many investors who hoped to capitalize on an exuberant market rally that sent stocks soaring. Companies across the investment landscape, from titans such as Charles Schwab Corp. to newcomers like Webull Financial LLC, said they had technical glitches as morning trading kicked off. Several of the platforms attributed the problems to extreme trading volumes and activity as investors rushed to buy and sell shares.

Itiviti Named Best Low-Latency Trading Network; Recognized for Innovation and Connectivity Excellence at Buy-Side Technology Awards 2020
Itiviti, a leading trading technology and service provider to financial institutions worldwide, today announced that NYFIX, their Order Routing Network (ORN), has won the Best Low-Latency Trading Network category during the WatersTechnology Buy-Side Technology Awards 2020.


This week offers an especially wide array of webinar options. One from Cboe’s Options Institute is “Harnessing Small-Cap Volatility with Russell 2000 Options” on Wednesday, November 11, at 12 p.m. ET/11 a.m. CT. Planned speakers include Catherine Yoshimoto, director of product management for FTSE Russell, Derek Devens, senior portfolio manager, Neuberger Berman, and Matt Moran, head of Index Insights, Cboe Options Institute. Although it’s advertised for financial professions, Moran said all JLN readers are welcome. You can register here. ~SC

The Evolution of Options Trading in the Age of Algos
TABB Forum
November 11, 2020
The webinar will provide an opportunity to demonstrate the functionality of the new OptionsLive platform, while educating participants about the obstacles options traders have faced up to this point, how OptionsLive is addressing them and what the options trading landscape of the future will look like as a result. The goal is to demonstrate the key differentiators between OptionsLive and the tools that options traders have relied upon for years.

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