Wall St extends recovery at end of volatile week; Crypto Options Market Makers Starting to Influence Bitcoin Price

May 14, 2021

$41,726/$300,000 (13.9%)

Lead Stories

Wall St extends recovery at end of volatile week
Medha SinghSruthi Shankar – Reuters
U.S. stocks rose on Friday with broad-based gains, as investors looked at economic recovery prospects after worries about a prolonged period of inflation sparked a volatile week of trading. Futures pared some gains after data showed U.S. retail sales unexpectedly stalled in April, as a boost from stimulus checks faded, but an acceleration is likely in the coming months amid record savings and a reopening economy. read more “The disappointing retail sales numbers shouldn’t really come as a huge surprise,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.

Crypto Options Market Makers Starting to Influence Bitcoin Price
Omkar Godbole – Coindesk
Bitcoin (BTC) tanked on Wednesday, hitting multi-month lows near $46,000. Renewed fears of an early rate hike by the Federal Reserve, the recent dour mood in financial markets and Tesla’s decision to suspend bitcoin payments have all been blamed for the price slide. But the downward move was likely aggravated by options market makers selling the cryptocurrency in the spot/futures market to hedge their books (offset bullish exposure), according to Fredrick Collins, a seasoned options trader and researcher at Glassnode.

More Innovation Welcomed in US Equities
Shanny Basar – Traders Magazine
Ray Ross, co-head of electronic trading at BMO Capital Markets, is looking forward to continued innovation in US equity markets this year after new venues and order types launched in 2020. Ross told Markets Media there has been a lot of market microstructure change over the last few years that has allowed the broker to implement trades faster and with lower impact, to the benefit of end-investors. “We have seen lots of good progress and we are certainly eager to see what is coming next,” he said.

IPOs Marked By Both Record Highs And Market Volatility
Things are in flux for IPOs these days with mergers hitting record highs in terms of money raised and share sales, but there have also been several delays due to market volatility at the same time. A report from U.S. News on Thursday (May 13) said global companies have raised around $248 billion. The new record high has come about through a confluence of factors including a robust equity rally along with the stimulus money given out by the U.S. government in recent months.

Retailers set for earnings stage after inflation-sparked market turbulence
Lewis Krauskopf – Reuters
Earnings reports from major retailers will be in focus next week after the U.S. stock market suffered one of its biggest pullbacks in months, with investors looking for clues on the pace of inflation and consumer spending and whether companies can sustain their strong earnings momentum.

Exchanges and Clearing

Cboe Global Markets Announces 2021 Annual Meeting Results
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced the preliminary shareholder voting results from its 2021 Annual Meeting held today.


Surveillance firm Eventus signs first Australian client
Wendy Lisney – FOW
Eventus Systems has signed its first Australian client as the US surveillance firm steps up plans to expand its presence in the Asia-Pacific region.
Sydney-based Morrison Securities, the top broker by volume and value in the Australian Securities Exchange’s (ASX) equity derivatives market and a provider of execution and clearing services to Australia Financial Services Licence holders, has chosen the cloud-based version of Eventus’s Validus platform for trade surveillance in equities, equity options and warrants.


Stock Market Volatility Is Back. These Funds Can Help Manage It.
Lewis Braham – Barron’s
Options sellers feed off fear, while buyers feed off overconfidence. These financial contracts are priced off volatility, and the more afraid investors are, the more expensive they become. On May 12, investors panicking over bad inflation data drove the stock market down and volatility up 26% in one day—bad news for them, but good for options sellers.


Order Types and Off-Screen Liquidity: What You See Isn’t Always What You Get
Cboe blog
As an experienced trader, you often start a trade by checking the three measures of liquidity—volume, open interest and the bid/ask spread. If there are enough buyers and sellers, you assume the market is liquid enough to trade. If not, you might have trouble getting in or out of positions easily and efficiently, so you stay away. But there’s just one catch when making a liquidity assessment: There are often more market participants—market makers and other traders—in the room than appear on your trading screen. In short, there may be “off-screen liquidity” invisible to your platform’s digital eye. And as most professional traders know, if a given instrument is a compelling trade, then you have to seek out that liquidity by finessing your orders.


Asset Management Derivatives Forum 2021; Co-hosted with SIFMA AMG
8 June 2021 – 9 June 2021 • 10:15 AM – 1:30 PM ET Daily • VIRTUAL
FIA and SIFMA AMG are bringing you a virtual take on the Asset Management Derivatives Forum in 2021. Join us for virtual programming on June 8 and 9, during which market participants from all sides of a trade and leading regulators will examine the latest developments impacting the use of derivatives by asset managers, including business, clearing, regulatory and operations issues.
With keynote speakers and panels, this virtual Forum presents a unique opportunity to gain insights into how investors, sell-side firms and market structure operators view the landscape for derivatives activity by the asset management community, attracting attendees from the joint membership of FIA and SIFMA Asset Management Group.

Clearing 101: Exchanges, Clearinghouses and CCPs
Dates: Sep. 15, 2021 12:00 p.m. – Sep. 16, 2021 1:30 p.m. ET.
Location Virtual Live. Two 90-sessions over 2 days.
Early-bird $199
Fee $225
Instructor: Marti Tirinnanzi
Registration is limited to approximately 20 participants to promote student participation and interaction.
Join us for a short program (90 minutes each day for 2 days) that explains the multilateral systems that provide the infrastructure for transferring, clearing and settling payments, derivatives and other financial transactions among financial institutions and end users. Following Dodd Frank, clearinghouses became designated as Systemically Important Financial Market Utilities, vital to the operations of the financial markets and subject to heightened regulatory scrutiny. Buyers and sellers in exchange transactions rely on clearinghouses to intermediate transactions and to manage credit risks between trading parties. As such, clearinghouses promote transparency, efficiency, and stability by providing market-based pricing, daily settlement, and ensuring adequate capitalization for markets to function.


(Podcast) TWIFO 249: Stealing the Shine with Shoulder-Mounted Missiles
This Week In Futures Options – Options Insider
Host: Mark Longo, The Options Insider Media Group
Co-host: Sean Smith, FTSE Russell
CME Hot Seat: John Brady, RJ O’Brien
On this episode, Mark, Sean, and John discuss the movers and shakers this week in futures options; rates, equities, bitcoin, metals, and much more.

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