US options volume nearly doubles over last 12 months; Bitcoin holders expect high volatility as roughly 100,000 BTC options contracts expire Friday

Mar 23, 2021

$32,426/$300,000 (10.8%)

Observations & Insight

SC: The Cboe Options Institute on Wednesday hosts industry pros Jon Havice and Eric Metz to talk about the use of cash-secured put writing of index options by money managers, pension funds and others. To join the discussion at 11 a.m. Chicago time, register
here.

Lead Stories

US options volume nearly doubles over last 12 months; Nasdaq leads single stock options market share; MIAX growing fast
Chris Mendelson – FIA MarketVoice
In February 2021, single stock options on US options exchanges reached a total volume of 572.4 million contracts, an increase of 91.3% from February 2020. That growth comes after a significant increase in the prior year, too, with a 51.8% year-over-year increase between February 2020 and February 2019.
/bit.ly/2Pi8lTd

Bitcoin holders expect high volatility as roughly 100,000 BTC options contracts expire Friday
Sarah Tran – FX Street
Speculators have been bullish on Bitcoin ahead of its $6 billion options expiry on Friday. There is more open interest in call options than put, a recurring trend since early 2021. April could be a more volatile month for Bitcoin price than ahead of the options expiry on March 26.
bit.ly/3lQuVys

Stock Market’s Fiercest Bulls Go Missing Despite Stimulus Checks
Yakob Peterseil and Vildana Hajric – Bloomberg
Even as the latest wave of stimulus checks floods American bank accounts, speculative stock fervor is falling according to a key metric.
The number of call options traded has slipped from the record highs notched earlier this year when stay-at-home traders piled into bullish bets. A daily average of 23 million contracts have changed hands on U.S. exchanges over the past five days — down from over 30 million in February.
/bloom.bg/3lIeqUU

The S&P 500 has rebounded 76% since its lowest point in the pandemic crash one year ago today. 2 experts unpack an unprecedented year filled with virus-driven volatility.
Emily Graffeo – Markets Insider
One year ago today, the S&P 500 reached its lowest point in the coronavirus-induced market crash. The benchmark index bottomed out at 2,237 on March 23, 2020, following some of the largest down days in market history.
On March 16, the S&P 500 dropped 12%, the same day the stock market’s “fear gauge,” the Cboe VIX volatility index, closed at a record high. Insider spoke with two analysts to unpack a rollercoaster year for financial markets.
/bit.ly/3lJx3rN

The bull market in stocks is heading into its second year, and history suggests a 17% gain could be in store
Matthew Fox – Markets Insider
It’s been one year since the stock market found its bottom amid the fastest bear market on record, in which the S&P 500 fell more than 30% amid the COVID-19 pandemic.
One year later, the bull market in stocks is alive and well, with the S&P 500 rising as much as 75% to new record highs since the bear market low on March 23, 2020. That’s the strongest start to a new bull market on record, according to data from LPL.
/bit.ly/3lGTYUx

Wall Street subdued ahead of Powell, Yellen testimonies
Medha Singh and Devik Jain – Reuters
Wall Street was muted on Tuesday as energy stocks slipped, while investors marked time ahead of remarks from Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen for clues about their tolerance for higher bond yields.
The S&P energy index shed 1.5% as oil prices slumped more than 3% on fears that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in demand.
/reut.rs/3f8aNGI

Happy GameStop Earnings Day
Matt Levine – Bloomberg
Today’s the big day! Two weeks ago, I wrote that GameStop Corp.’s “fourth-quarter earnings are going to be the financial event of the season.” Well, it’s all happening today after the market closes. There will be an investor conference call at 5 p.m. New York time. That should be fun. I hope it will start with a rousing group rendition of “The Tendieman,” Reddit’s GameStop sea chantey. I hope that “yelling, humming, and intermittent announcements” will coalesce “into something like a Gregorian chant,” there on the earnings call.
bloom.bg/3d47X2C

Exchanges and Clearing

Cboe Promotes Catherine Clay to Executive Vice President, Will Lead Newly Created Data and Access Solutions Division
CBOE
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, announced today the promotion of Catherine Clay to Executive Vice President, from Senior Vice President, Information Solutions, and the creation of a new Data and Access Solutions division within the company, which Clay will lead. She has also been appointed to Cboe’s Executive leadership team.
/bit.ly/3sfiC0Y

*****JJL: Nice to see women leaders at Cboe ascendant. They have a lot of talent there.

Michael Peters and Erik Müller in Börsen-Zeitung: “Eurex stands for a successful growth story”; Eurex is confident about its growth prospects. Michel Peters and Erik Müller, CEOs of Eurex and Eurex Clearing, respectively, still see potential in many sectors.
Eurex
Mr. Peters, you recently announced over-the-counter trades tracking Total Return Futures on the FTSE 100, plus Dividend Futures and classic futures and options contracts on the index. What is the background? Peters: With Total Return Futures, we are supporting the shift from over-the-counter business to regulated markets with central clearing, as desired by the regulators. We started in 2016 with Total Return Futures on the EURO STOXX 50 . If you look at the corresponding OTC instruments, such as equity index swaps, the shift has been successful. Total Return Futures traded and cleared on Eurex now account for more than 50% of the market.
/bit.ly/3sgsibo

Data Spotlight – US options volume nearly doubles over last 12 months; Nasdaq leads single stock options market share; MIAX growing fast
Chris Mendelson – FIA MarketVoice
In February 2021, single stock options on US options exchanges reached a total volume of 572.4 million contracts, an increase of 91.3% from February 2020. That growth comes after a significant increase in the prior year, too, with a 51.8% year-over-year increase between February 2020 and February 2019.
/bit.ly/2Pi8lTd

Technology

Trading Technologies Launches Connectivity to Athens Stock Exchange for Derivatives Trading Via the TT Platform
Trading Technologies
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and the Athens Stock Exchange (ATHEX), the national exchange of Greece, today announced that all derivative products listed on the ATHEX Derivatives Market are now available for trading through the TT platform and accessible to TT’s global user base.
/bit.ly/3sf62yN

*****JJL: Now we know why Tim Geannopulos was hired by TT to be the CEO, to get the Athens Stock Exchange deal done. Ooopa!

Strategy

Boston Beer Stock Could Rise Even More. How to Play It With Options.
Steven M. Sears – Barron’s
Growth stocks have long provided extraordinary returns and mostly transparent earnings streams—but investors no longer seem to care. The market mob is so confident that better days will soon be here after a year of quarantine that demand is high for anything that might benefit from the postpandemic economy.
Growth stocks are increasingly being sold by investors, who are reinvesting the proceeds in battered stocks that could benefit from the reopening of the U.S. economy made possible by the Covid-19 vaccine.
/bit.ly/3lG5O1c

Education

Inside Volatility Trading: The Impact of Grouping
Kevin Davitt – Cboe
Grouping is a common strategy to analyze (quantitatively and qualitatively) segments of the population, subsets of the market (sectors) and other disparate entities with similar characteristics. As a species, humans have thrived in no small part due to their ability to group information and work toward common goals. Sociologists have constructed loose grouping models for Americans based on birth year and the defining historical moments for that group. Technological advances and the economy have played significant roles in the formation of the groups and their associated characteristics. In short, generations are forged by catalysts of macro volatility.
bit.ly/3cY7IGy

Options Trading Explained: Casino Correlations | tradeTALK Series
Mike Butler – trastytrade
Options trading is a complex endeavor, but we can simplify things for options trading beginners by taking a look at how buying options compares to selling options, and compare these ideas to players in a casino. tastytrade’s Anton Kulikov explains in his TradeTalk, “Be the House.”
bit.ly/31bWcle

Events

Derivatives Forum Frankfurt 2021
Eurex
A new period is upon us and even though it’s tempting to look back, let’s look forward.
The Derivatives Forum Frankfurt 2021 will be held as virtual edition with thought leadership insights, industry debates, keynote speeches and virtual networking opportunities. The Derivatives Forum is the leading European event focused on trading and clearing for derivatives and securities financing across asset classes. Originally planned as a physical event early March, the Derivatives Forum is set to be on 23-24 March.
/bit.ly/3lLsvRI

Cash-Secured Put Writing Registration
Cboe
This 60-minute webinar explores the use of cash-secured put writing of index options by money managers, pension funds and other investors.
Continuing education (CE) credit available – This webcast is accepted for one hour of CFP, CIPM, RMA, CIMC, CIMA, or CPWA CE Credit for webcast attendees. CFA Institute members may self-document their continuing professional development activities in their online CE tracker.
Air Date: Wednesday, March 24, 2021
Start Time:12:00 pm EST
Duration:60 minutes
/bit.ly/3dmg1vm

A New Virtual Experience
OIC
The Options Industry Conference is Going Virtual in 2021. Join OCC and the options exchanges for the 39th annual Options Industry Conference, April 28-29, 2021. While the conference will be held virtually for the first time in history, the focus will continue to be the key topics facing the options industry today, from the regulatory shifts in the U.S. and Europe to the technological developments that are driving monumental change in markets around the globe.
jlne.ws/2PPGgQh

Miscellaneous

GameStop earnings countdown: But what’s the fun in fundamentals, ask Reddit traders on the rocket-emoji launchpad
Thornton McEnery – MarketWatch
GameStop devotees have made it clear that they “like the stock,” and not even the company’s first earnings results since the Reddit-fueled rally will change that opinion.
The videogame retailer, the OG meme stock, is set to report its fourth-quarter earnings after the closing bell Tuesday. But while Wall Street is taking a cautious approach to valuing the brick-and-mortar company, rocket emojis are apparently not subject to the usual laws of physics and finance. Users on Reddit board WallStreetBets equipped with “diamond hands” say they’re ready to buy more GameStop shares regardless of what Tuesday’s quarterly results say about fundamentals.
/on.mktw.net/3rclw55

(Podcast) OB 983: The Options Hawks
Option Block – Options Insider Radio Network
Host: Mark Longo, The Options Insider Media Group
Co-host: Mark Sebastian, The Option Pit
Co-host: Mike Tosaw, St. Charles Wealth Management
bit.ly/3skbd0k

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