VIX Index Closes at Lowest Level Since Beginning of Pandemic

Oct 22, 2021

Lead Stories

VIX Index Closes at Lowest Level Since Beginning of Pandemic
Justin Zacks – Bloomberg
The Cboe Volatility Index, known as Wall Street’s fear gauge, closed Thursday at its lowest level since before the pandemic hit as strong earnings pushed stocks to record highs.
The VIX closed down 3.1% at 15.01, its lowest close since Feb. 19, 2020. The VIX has averaged 19.71 in 2021.

Stock Fear Gauge Can Stay Low Over Time, Schwab’s Sonders Says
John McCorry and Kailey Leinz – Bloomberg
The stock market may have hit the sweet spot of volatility.
The CBOE Volatility Index (VIX), a gauge of fear, closed Thursday at 15.01, its lowest since before the pandemic took hold in March of last year, and fell on Friday before edging higher again.

Wall Street Veteran Warns of Rising Rate ‘Tsunami’
William Shaw and Sam Potter – Bloomberg
Scott Peng knows trouble when he sees it — and right now he detects it all over markets thanks to an oncoming interest-rate “tsunami.”
The Advocate Capital Management executive — who helped uncover the biggest scandal in modern banking with a damning 2008 report on Libor manipulation — has a plan. He’s launching the Rising Rate Hedge exchange-traded fund as soon as next week to ride a breakout in bond yields, as market-based measures of inflation jump to the highest in decades.

Nassim Nicholas Taleb Calls Bitcoin a Tulip Bubble Without the Aesthetics
Luke McGrath – Bloomberg
Nassim Nicholas Taleb says Bitcoin is like the 17th century bubble that saw the price of tulip bulbs skyrocket before crashing. The cryptocurrency is a tulip bubble without aesthetics and disguised as a “currency,” the former options trader said in a tweet Thursday. It is as irrational to buy it as it is to short it, he added.

JPMorgan Warns Boom for Bitcoin Futures ETFs May Come at a Cost
Joanna Ossinger – Bloomberg
Before the game-changing launch of the first ever Bitcoin-linked ETF in the U.S., plenty on Wall Street cautioned the derivatives-powered trade was no free lunch, given the holding costs. But after just two days of trading, JPMorgan Chase & Co. strategists warn pent-up demand for Bitcoin exchange traded-funds risks distorting the futures market — ramping up ETF investors’ costs along the way.

‘Bloomberg Commodities Edge’: Unprecedented Copper Volatility
Bloomberg (VIDEO)
“Bloomberg Commodities Edge” talks to the smartest voices in the commodity world about the companies, the physical assets and the trading behind the hottest commodities. This week Bloomberg’s Alix Steel discusses the unprecedented volatility in copper, the surprise drop in oil stockpiles and asset-backed digital assets.


Cboe and MSCI plan options growth following partnership extension
New agreement extends Cboe’s rights to offer options trading on MSCI global indices through 2031.
Wesley Bray – The Trade
Cboe Global Markets and MSCI have signed a licensing agreement that extends and broadens their strategic relationship. The new agreement follows several years of collaboration between the two companies and will extend Cboe’s rights to offer options trading on MSCI global indices through 2031.

CME Takes Over as Largest Bitcoin Futures Exchange as BITO Pushes Limits
Exchanges enforce positions limits to keep a single entity from establishing unilateral control over the market.
Omkar Godbole – Coindesk
The Chicago Mercantile Exchange (CME) has replaced Binance as the world’s biggest bitcoin futures platform, thanks to the strong investor appetite for the recently launched ProShares Bitcoin Strategy ETF.
As of writing, the CME accounts for 22% or $5.68 billion of the total global futures open interest of $25.7 billion, while Binance is contributing $5.66 billion to the worldwide tally.

Indexes, Analytics, Anti-Financial Crime to Boost Nasdaq
Shanny Basar – Traders Magazine
Adena Friedman, president and chief executive of Nasdaq highlighted the increase in annualized recurring revenue and software-as-a-service businesses as a strong base for further growth.
In its third quarter results Nasdaq said annualized recurring revenue (ARR) increased 19% from the same period last year to $1.8bn (EUR1.5bn) and rose 10% if Verafin is excluded. Nasdaq completed its acquisition of Verafin, which provides anti-financial crime management software, in February 2021.

Regulation & Enforcement

Deutsche Bank Whistleblower Gets $200 Million Bounty for Tip on Libor Misconduct
Mengqi Sun and Dave Michaels – WSJ
A whistleblower whose information helped U.S. and U.K. regulators investigate manipulation of global interest-rate benchmarks by Deutsche Bank AG was awarded nearly $200 million for assisting the probe, according to people familiar with the matter.
The payout is the largest ever by the Commodity Futures Trading Commission, which along with the Justice Department and U.K. Financial Conduct Authority settled enforcement actions against Deutsche Bank in 2015.


How To Trade Options On The Russell 2000 When Volatility Is Low
Today UK News
Volatility has dropped significantly in the last week, with the VIX once again trading below 16. That is toward the lowest levels that we’ve seen in the last 12 months.
When volatility is low, it’s a good idea to add some trades that will benefit when implied volatility rises.
One way to find potential trade candidates is to look at the implied volatility percentile of a stock. This measures where the current level of implied volatility sits compared with all readings in the last 12 months.
An implied volatility percentile of 0% means that the current level of implied volatility is the lowest level seen in the last 12 months.


What’s Fueling Bitcoin’s Ride? It’s More FOMO Than Inflation
Lionel Laurent – Bloomberg
A “validating moment” for Bitcoin — that’s how some have described its fresh all-time high, fueled by the successful launch of an inaugural U.S. exchange-traded fund (ETF) for the cryptocurrency. The fund has racked up assets of over $1 billion in two days and raised hopes of more launches down the line. It has also boosted preexisting Bitcoiner narratives such as it being a hedge against inflation, despite history suggesting otherwise.

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