VIX Rises as Market Girds for U.S. Government Shutdown
Kaitlyn Kiernan – The Wall Street Journal
The stock market’s so-called fear gauge rose Monday to its highest level in a month — but remained historically low — as traders and investors girded for an expected midnight shutdown of the U.S. government.
Fearless: Hedges, Volatility Bets’ Strong Monday Fizzles Out
Brendan Conway – Barron’s
Debt ceiling impasse? Government shutdown? Whatever. That’s more or less the reaction of stock and ETF prices Monday afternoon. What started as a mid-sized selloff has become a small one. iShares Russell 2000 Index Fund (IWM) event crept into positive territory by a penny or two at one point this afternoon.
CBOE to increase VIX trading hours in late October
Tom Polansek and Doris Frankel – Reuters
CBOE Holdings Inc said on Monday that it will expand trading hours for futures on the CBOE Volatility Index about a month later than expected in late October.
**CBOE press release about this is below under “Exchanges”. -JB
Glitches are the new normal – The TRADE Poll
Almost half of market participants believe exchange glitches are simply a part of modern electronic trading that markets should learn to live with, according theTRADEnews.com’s September poll.
**The interesting question implied here is how tolerant of glitches are these traders? How much down time is too much? -JB
Videocast: Traders bet on VIX drop
Signs Raise Threat of a Red October
E.S. Browning – The Wall Street Journal
The U.S. stock market is in the doldrums, with the Dow Jones Industrial Average back at May levels. Little wonder.
In the coming month, markets face four huge tests: the Washington debt crisis, the release of September employment data, third-quarter earnings releases and the Federal Reserve’s next policy meeting.
Analysis: VIX and the Debt Ceiling
Jared Woodard – The Street
The risk of a sizable market drop if Congress refuses to raise the debt ceiling is great enough that a hedge position is justified.
There are two areas of risk if the struggle within the GOP continues into late October and the Treasury runs out of borrowing capacity.
ISE Gemini Rolls Out 200 Additional Products
Press Release (ISE)
Listings on ISE Gemini Now Represent Over Ninety Percent of Overall Equity and ETF Options Volume
The International Securities Exchange (ISE) today announced that ISE GeminiTM has completed the rollout of 200 additional products. Following today’s expansion, ISE Gemini now lists all options classes included in the penny pilot and the most active non-penny pilot names. ISE Gemini has approximately 500 total products listed that together represent over ninety percent of equity and ETF options industry volume.
CBOE And CFE To Launch Futures And Options On The CBOE Russell 2000 Volatility Index
Press Release (CBOE)
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that Chicago Board Options Exchange, Incorporated (CBOE) and CBOE Futures Exchange, LLC (CFE) will launch trading on Russell 2000 Volatility Index options (RVX) and futures (VU).
Trading on Russell 2000 Volatility Index futures will begin on Wednesday, October 30, with options trading to begin in the weeks that follow, pending regulatory review.
CBOE Futures Exchange Announces Launch Dates For VIX Futures Extended Trading Hours
Press Release (CBOE)
CBOE Futures Exchange, LLC (CFE) today announced that the first phase of its extended trading hours initiative for CBOE Volatility Index (VIX Index) futures will begin on Monday, October 21, with the second phase to follow on Monday, October 28.
Two new Eurex Executive Board members appointed
Press Release (Eurex)
In its meetings on 26 September 2013, the Board of Directors of Eurex Zürich AG and the Supervisory Board of Eurex Frankfurt AG appointed Mehtap Dinc (46) and Brendan Bradley (49) as new members of the Executive Board of Eurex. Dinc will take over responsibility for product research and development from Peter Reitz, who will remain on the Executive Board and continue to be in charge of European Energy Exchange (EEX) and Eurex Repo. Bradley will be responsible for innovation management.
REGULATION & ENFORCEMENT
CFTC Warns Swaps Markets to Give All Traders Access
Matthew Leising & Silla Brush – Bloomberg
The U.S. Commodity Futures Trading Commission warned owners of government-mandated swaps platforms set to go live next week that they must ensure all types of buyers and sellers can participate.
CFTC should rethink controversial margin rule -commissioner
Tom Polansek – Reuters
The Commodity Futures Trading Commission should reconsider a proposal to bar brokers from using excess money from one customer to cover the temporary shortfall of another, a top U.S. derivatives regulator said on Thursday.
CFTC Final Rule: Commodity Options
Doug Ashburn – MarketsReformWiki
– Exchange-traded options on futures, which are regulated under part 33 of the Commission regulations, are specifically excluded from the swap definition. This rulemaking has no effect on those transactions. The final rule also deletes the “obsolete” agricultural trade option registration provisions from part 3 of the Commission’s regulations.
– The rulemaking also includes an interim final rule that provides a trade option exemption from the general swaps rules, subject to certain conditions, for certain physical delivery commodity options. The conditions include position limits, large trader reporting, appropriate recordkeeping and reporting requirements, antifraud and anti-manipulation rules, and the retention of certain swap requirements for swap dealers and major swap participants that engage in trade options.
The rulemaking applies to commodity options that fall under the definition of “swap”. Its effective date was June 26, 2012. The compliance date was October 12, 2012.
Active Stock ETFs Move Closer to Market After Long Delay
Christopher Condon & Miles Weiss – Bloomberg
Companies seeking to push exchange-traded funds into the almost $6 trillion U.S. market for actively managed stock funds are starting to gain traction with regulators after a long delay.
NYSE Euronext selects ITRS Geneos for US exchange monitoring
Press Release (via Automated Trader)
On completion of the phased implementation NYSE Euronext will be using ITRS Geneos to monitor its entire U.S. equities and options exchange technology environment, from matching engines and client gateway connectivity to market data delivery, using a single tool.
Approach Options Trading with ‘Both Barrels Blazing’
Bernie Schaeffer – Schaeffer’s Investment Research
It is never an easy task to double your money on an options trade, but it is certainly possible and, in fact, options pricing models suggest that roughly one out of every five at-the-money options trades will expire at double the purchase price. But in exchange for this very nice capability on the profit side, we must also deal with the inconvenient truth that 50% of at-the-money options will expire worthless, and would thus create a total loss for the buyer.