JLN Options: Volatility’s Biggest Week of 2013 Was Not Very Big

Apr 22, 2013

Lead Stories Volatility’s Biggest Week of 2013 Was Not Very Big
Brendan Conway, Barron’s
The “fear gauge” climbed 24% last week, the most in nearly four months. But these days it takes more than a commodity selloff and weak data in China to get investors genuinely worried.
http://jlne.ws/109CywD VIX Has Biggest Weekly Increase of 2013 as Stocks Drop
Nikolaj Gammeltoft and Cecile Vannucci, BloombergBusinessweek
U.S. equity volatility rose the most in almost four months last week after unexpectedly slow growth in China and a selloff in commodities triggered the biggest stock-market drop since November.
http://jlne.ws/109Auoh Bloomberg lawsuit will not stem swap futures
The Trade
Bloomberg’s legal action against the Commodity Futures Trading Commission (CFTC) this week will not constrain the growth of swap futures, experts have warned.
The lawsuit, filed Tuesday in a federal court in Washington DC, relates to the lower initial margin payment required for swap futures compared to cleared swaps, which the firm believes will limit liquidity on swap execution facilities (SEFs), the OTC trading platforms created by Dodd-Frank.
http://jlne.ws/109ADrG Hedge Fund Gold Wagers Defy Worst Slump in 33 Years: Commodities
Joe Richter, BloombergBusinessweek
Hedge funds increased bets on gold rallying after prices plunged the most in 33 years, underscoring billionaire John Paulson’s view that bullion will rebound.
http://jlne.ws/109AS6c FOCUS: Mixed Speculative Activity Seen In CFTC Data Following Metals Price Break
Kitco News (via Forbes)
After last week’s sharp break in metals prices, market watchers expected to see a significant reduction in the net-long positions across the board for the precious metals complex, but instead activity was mixed, particularly in the gold market.
http://jlne.ws/109BGI9 Google Shares Tumble 3.1% in Possible ‘Fat Finger’ Trade
Whitney Kisling, BloombergBusinessweek
Google Inc. (GOOG) dropped as much as 3.1 percent and then reversed most of the tumble within a second (GOOG) in a series of transactions that spurred concern the stock was hit by a computerized-trading error.
http://jlne.ws/109BOYj S&P 500 Index: Will It Correct To 1,500?  
Angelo Airaghi, Seeking Alpha
Last week, gold lost 15% from its recent peak. The mild inflationary picture and a tepid global economic recovery should contract US stock trends and support the US dollar for a few more months.
http://jlne.ws/109CexH S&P 500 first-quarter earnings are missing a beat
Jonathan Burton, Marketwatch
This third week of earnings season is the big one – the Wall Street equivalent of Fashion Week.
So far, the first-quarter’s runway show has clashed with expectations.
http://jlne.ws/109D8uj S&P 500′s Head-and-Shoulders Pattern Not a Problem – Yet  
Tomi Kilgore, The Wall Street Journal
Traders are keeping a close watch on a potentially bearish “head-and-shoulders” pattern building in stocks, but some chart-watchers say it’s nothing to be concerned about. Yet.
http://jlne.ws/109Df93

Exchanges

Chicago Board of Trade seat prices rise on bets Fed’s QE3 may end
Tom Polansek and Ann Saphir, Reuters
Trading firms are snapping up memberships at the Chicago Board of Trade as signs that Federal Reserve policymakers may pare back their massive monetary stimulus boost Treasury futures trading.
http://jlne.ws/13mAsgY NASDAQ OMX Completes Acquisition of 25% Stake in Dutch Derivatives Trading Venue TOM
Press Release (via GlobeNewswire)
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced that it has received the necessary regulatory approval for the completion of its acquisition of 25 percent of the Dutch cash equity and equity derivatives trading venue TOM, The Order Machine. The agreement also includes an option for NASDAQ OMX to acquire an additional 25.1 percent of the remaining shares to secure a majority stake in TOM.
http://jlne.ws/109C4q8 Montréal Exchange Launches Futures Contracts on Trading Simulator
Press Release (via Canada Newswire)
Montréal Exchange Inc. (MX), a wholly-owned subsidiary of TMX Group Limited and Canada’s derivatives exchange, today launched futures contracts on its Trading Simulator.
The futures contracts that are available on the Trading Simulator include: BAX, CGZ, CGF, CGB, LGB, SXF, SXM, SCF, SXA, SXB, SXH and SXY.
http://jlne.ws/109Brgr

Regulation

FINRA Proposes Exemption for Exchanges on Market-Making Payments
Tom Steinert-Threlkeld, Traders Magazine
The Financial Industry Regulatory Authority has signaled to the Securities and Exchange Commission that it is prepared to amend its rule that prohibits payments for making markets in securities, to allow exchanges to make such payments under certain conditions.
http://jlne.ws/17IKgmb Futures regulators challenged by changing industry
Lynne Marek, Crain’s Chicago Business
When people ask Michael Mason, a trader in the lumber pit of the Chicago Mercantile Exchange, why he’s wearing a flimsy temporary trading badge, he says it’s a reminder that MF Global Inc. still owes him money.
http://jlne.ws/109AKDD U.K. Joins Russia in Raising Alarm on U.S. Swap Rules’ Reach
Silla Brush, BloombergBusinessweek
Nine overseas finance officials urged U.S. Treasury Secretary Jacob J. Lew to limit the cross- border reach of Dodd-Frank Act swaps rules that they say are fragmenting the $639 trillion global market.
http://jlne.ws/123jiF3

Strategy

Ask the Editor: How Do You Trade the VIX?
Jeff Reeves, InvestorPlace
“Is it true that you can only buy VXX through options?”
I spent a long time trying to craft a succinct but complete response, and after posting it decided that I’d share it here, too, for other interested readers.
http://jlne.ws/109Bk4y

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Options Newsletters

Pin It on Pinterest

Share This Story