US options traders bet on near-term recovery as bank stocks rebound

Mar 14, 2023

Observations & Insight

The good people at Quantitative Brokers announced today the unveiling of a revolutionary options execution algorithm for energy and the commodities markets. QB has expanded their popular Striker algo execution tool to support NYMEX energy and CBOT commodity options markets via a multi-Futures Commission Merchant workflow.

QB launched Striker in 2020 and this expansion of Striker “revolutionizes the way energy and commodities markets can be traded by buy-and sell-side institutions.” This should be a popular breakthrough product for QB. ~[[JJL]]


Relative Value Framework for Analyzing Volatility; Mat Cashman, Experienced Trader & Principal of Investor Education at OCC, Explains This & More in Part 2 of This Options Discovery Full Interview

In part 2 of this Options Discovery full interview, JLN’s Alex Teng continues the conversation with Mat Cashman, principal of investor education at OCC, to discuss the relative value framework for analyzing volatility, advice for starting a career in options, and The Options Industry Council (OIC) free online tools.

Watch the video »


CEO JJ Kinahan talks about the journey to rebranding “tastyworks” as “tastytrade,” adding crypto wallet and equities

JJ Kinahan became CEO of IG North America, which consists primarily of tastytrade, tastyworks, and its IG FX Business, on July 1, 2023. The company rebranded tastyworks as tastytrade on February 22, 2023. JLN spoke to Kinahan on that day.

Watch the video »

Lead Stories

US options traders bet on near-term recovery as bank stocks rebound
Saqib Iqbal Ahmed – Reuters
Traders in the U.S. equity options market on Tuesday were betting on a near-term rebound in the battered shares of U.S. banks after the high-profile collapse of Silicon Valley Bank (SIVB.O) triggered a sector-wide selloff.
Options traders were buying up short-term call options on a variety of names, including the SPDR S&P regional banking ETF (KRE.P) and regional banks such as First Republic Bank (FRC.N) and Western Alliance Bancorp (WAL.N).

Bitcoin Options Volume on Deribit Hits Highest Level in 22 Months as Bank Failures Breed Volatility
Alex Thorn – CoinDesk
Trading in bitcoin (BTC) options listed on cryptocurrency exchange Deribit has soared in the wake of U.S. bank failures and resulting market volatility.
Bitcoin options worth $2.4 billion have changed hands on Deribit in the past 24 hours, the highest single-day tally since May 17, 2021, according to data tracked by Amberdata. The number of contracts traded in the past 24 hours stood at a record high of 99,195 BTC at press time. The 24-hour notional volume in ether options totaled $948 million as of writing, the highest since November.

Investor Anxiety Hits a Fever Pitch After Silicon Valley Bank Collapse
Gunjan Banerji and Eric Wallerstein – WSJ
Investors are scrambling to protect against the possibility of a protracted stock-market downturn.
The collapse of three banks in the past week has exacerbated a bout of recent volatility that has quickly crested through stock, bond and derivatives markets. Many traders are reaching for bets that would pay out if the haywire stretch for U.S. markets continues.

CPI: If the Federal Reserve Fails to Raise Rates, It Will Be a Sign of Panic
Jonathan Levin – Bloomberg
The Federal Reserve’s war on inflation isn’t over. After five days of turmoil in the banking sector, financial markets had all but written off the prospect of additional interest-rate increases. But the latest consumer price index shows why that assessment was premature.
The new numbers Tuesday showed the core CPI rose 0.5% from a month earlier, exceeding (albeit only slightly) the median forecast of economists in a Bloomberg survey. On a three-month annualized basis, the report put core CPI at around 5.2%, highlighting the challenge facing the Fed as it tries to juggle both sides of its inflation and full employment dual mandate.

Fed Reset Doesn’t Mean Inflation Fight Is Over Yet
John Authers – Bloomberg
The banking implosion has seen a rethink on how the US central bank might proceed. But inflation hasn’t been licked and premature easing could spark another melt-up in stocks.

Wall St relieved after inflation data but warns Fed’s fight not over
Lewis Krauskopf – Reuters
Investors on Tuesday welcomed a report showing U.S. consumer prices rose at an expected monthly pace but warned of uncertainty ahead, as the Federal Reserve fights to bring down inflation while juggling a banking crisis.
February’s inflation report showed consumer prices rising by 0.4%, with a year-on-year increase of 6% – in line with analysts expectations, but far above the 2% rate the Fed hopes to achieve.


Nanos: More Strikes, More Options
Beginning March 14, 2023, Cboe Nano options will list additional strike prices to new expirations. The additional strike prices give retail traders more options and greater flexibility in trading and managing risk.

CME Group Hits Daily Trading Volume Record of More Than 66 Million Contracts
CME Group
CME Group, the world’s leading derivatives marketplace, today reported its highest daily volume on record, with 66,250,862 contracts traded on March 13. This follows the company’s fourth highest daily volume on March 10, when 56,433,765 contracts traded.

Cboe Europe Derivatives Expands
Shanny Basar – MarketsMedia
Cboe Europe Derivatives (CEDX), the US group’s pan-European equity derivatives exchange, is planning to add single stock options as its pipeline of clients is increasing.
Iouri Saroukhanov, head of European Derivatives at Cboe Europe, told Markets Media that the launch of single stock options is a hugely important initiative and CEDX is also actively concentrating on pushing the liquidity on existing contracts.

After the trials of 2022, traders mull the changing face of volatility
Ahead of the Eurex Derivatives Forum in Frankfurt this month, Eurex is releasing a series of articles that highlight the major themes affecting derivatives markets. One of the biggest of these has been volatility. We discussed this topic with a group of experts who will be appearing at the conference. Volatility was a constant presence in markets last year, as all asset classes were hit by inflation concerns, rising interest rates and the war in Ukraine.

Regulation & Enforcement

DOJ and SEC Are Investigating SVB’s Collapse: Report
Angela Palumbo – Barron’s
The Securities and Exchange Commission and the Justice Department are investigating the sudden closure of Silicon Valley Bank, according to a report from The Wall Street Journal.
The Journal reported Tuesday that both government entities were investigating the failure of the bank, citing people familiar with the matter. The investigations also were examining stock sales that SVB Financial’s officers made days before the bank closed, according to the report. The investigations, the Journal said, were in their early stages and may not find any wrongdoing or lead to charges. SVB Financial formerly owned the bank.


Nervous Markets
Cboe (Videoo)
Tim Biggam Tim Biggam – @Delta_Desk updates us on the $VIX reaction to #banks. #Vol411


The FIA has established the President’s Award and honored six derivatives industry leaders with the inaugural awards. The award honors individuals “for their contributions to the global cleared derivatives industry over the past year.” The first group of winners of the President’s Award include: Nick Briggs, Operations; Max E, Operations; Edward Mayfield, Legal; Laura Mul, Next Gen; Raj Ramanath, CCP Risk; and Meher Sutaria, Operations.

First Citizens to Buy SVB After Biggest Bank Failure Since 2008

First Citizens to Buy SVB After Biggest Bank Failure Since 2008

First Read Hits & Takes John Lothian & JLN Staff This morning we have the first of the videos from our FIA Boca coverage and we start out with our interview with CFTC Chairman Rostin Behnam. We also have an interview with IMC Marketing Manager Steven Biester,...

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The Spread


In part 2 of this Options Discovery full interview, JLN’s Alex Teng continues the conversation with Mat Cashman, principal of investor education at OCC®, to discuss the relative value framework for analyzing volatility, advice for starting a career in options, and The Options Industry CouncilSM (OIC®) free online tools.

read more

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