Wall Street Brokers Are Coming for the Hot Retail-Options Trade

Feb 21, 2024

Observations & Insight

Options Discovery Episode 30: Risk Management For Options Portfolios; Hilary Till, Principal At Premia Capital Management, Discusses This And More With JLN’s Asma Awass.

In this episode of Options Discovery, Asma Awass discusses the benefits and risks of options portfolios. This episode includes a breakdown of why a trader might want to create an options portfolio as well as how beta affects the risk of a portfolio. Asma then sits down with Hilary Till, principal of Chicago-based Premia Capital Management, LLC and a consultant with Premia Research LLC, who shares more insight on risk management for portfolios. You can check out Premia Research LLC here: https://www.premiaresearch.com/

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Lead Stories

Wall Street Brokers Are Coming for the Hot Retail-Options Trade; Firms tap into day traders’ demand for zero-day derivatives
Lu Wang – Bloomberg
It’s been blamed for fueling stock volatility and dismissed as the latest case of market speculation gone too far. Yet regardless of the threat – real or imagined – posed by the relentless boom in equity options that have zero days to expire, or 0DTE, a band of Wall Street brokers is unleashing new strategies to grab a piece of the action. Among them is Options AI, where trading volumes have doubled since the December launch of options tied to the S&P 500. Another player, Moomoo Technologies Inc., is waiving exchange fees for the newly introduced index contracts. At Webull Financial LLC, clients are allowed for the first time to sell derivatives without owning the underlying asset.

Options traders bet on huge swing in Nvidia shares after earnings
Joseph Adinolfi – MarketWatch
Options traders are piling into long-shot bets that would pay off if Nvidia Corp. shares rally more than 90% following its highly anticipated Wednesday earnings report.
The most popular call option has a strike price of $1,300, with nearly 16,400 contracts outstanding, according to FactSet data. By comparison, Nvidia was trading at $682 a share in midday trade on Wednesday, up 37.4% year-to-date.

China Tightens Grip on Stocks With Net Sale Ban at Open, Close
China has banned major institutional investors from reducing equity holdings at the open and close of each trading day, part of the government’s most forceful attempt yet to prop up the nation’s $8.6 trillion stock market. The order from China’s securities watchdog was recently delivered to major asset managers and the proprietary trading desks of brokerages, according to people familiar with the matter, who asked not to be named because they weren’t authorized to speak publicly. The China Securities Regulatory Commission, led by newly appointed Chairman Wu Qing, has also created a task force with the nation’s stock exchanges to monitor short selling and issue warnings to firms that profit from the wagers, the people said.

‘Deeply sorry’: China hedge fund apologises after trading ban for ‘market disruption’ in first punishment since Beijing’s vow to stem stock rout
South China Morning Post
An award-winning Chinese quant hedge fund has apologised to markt authorities and investors, after being punished with a trading ban for dumping stocks on local bourses, the first known case since the nation’s market regulator took aim at trading activities that have perpetuated a three-year market out.


Cboe Global Markets and MSCI Collaborate to Offer New Index Options and Volatility Indices
Cboe Global Markets
Latest initiative represents Cboe and MSCI’s growing relationship and will expand Cboe’s current product suite; Cboe plans to offer three new options tied to MSCI’s international, developed, emerging and U.S. markets benchmark indices, set to launch on March 18, pending regulatory approval; Cboe also introduces two new volatility indices based on existing MSCI Index options and the proprietary VIX Index Methodology. Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading derivatives and securities exchange network, today announced a new strategic initiative in collaboration with MSCI Inc. (MSCI), a leading provider of critical decision support tools and services for the global investment community, to expand its suite of Cboe-MSCI Index options and volatility indices. The initiative underscores Cboe and MSCI’s deepening relationship and continues to leverage the companies’ combined expertise to develop innovative solutions for investors worldwide.

Barchart Launches Options Flow, Providing Powerful Market Intelligence into Options Trading Activity
Barchart, a leading provider of market data and trading technology to active traders and investors, has announced the launch of Options Flow, a powerful market intelligence tool for market sentiment analysis, as well as stock and options trading. Options Flow empowers traders and investors to find an edge in the market by tracking the largest options trades on the day, and analyzing corresponding data to obtain a view on market sentiment and potential volatility.

Regulation & Enforcement

An Executive Bought a Rival’s Stock. The SEC Says That’s Insider Trading; Defense lawyers say the case is the first to involve ‘shadow insider trading’
Dave Michaels – The Wall Street Journal
Biotech executive Matthew Panuwat bought options on another drug company’s stock—and earned a windfall of $120,000.
The Securities and Exchange Commission now says he committed insider trading, even though he didn’t buy his employer’s stock and didn’t have inside information about the company he bet on.


Worried About a Stock Market Plunge? Buy Yourself Protection With This Options Play.
Steven M. Sears – Barron’s
Sometimes it seems we know least that which we think we know best. This is often true of friends and family, and lately it seems to apply to our understanding of the economy, interest rates, and financial markets.

Taking Protection
Cboe (Video)
In today’s #Vol411, @JoeTigay covers hedging dynamics in markets as the #VIX Index continues to make higher highs and higher lows.


Cboe is calling all risk takers to its 2024 Risk Management Conference hosted by the Options Institute to be held in Snowbird, Utah on October 15 to 18, 2024. Registration is open on the new RMC website and you can even take a look back at the RMC held in Austin in 2023 on the site. Space is limited.


Global debt hits new record high at $313 trillion -IIF
Jorgelina Do Rosario – Reuters
Global debt levels hit a new record high of $313 trillion in 2023, with developing economies scaling a fresh peak for the ratio of debt to their gross domestic product, a study showed.
The Institute of International Finance (IIF), a financial services trade group, said on Wednesday that global debt surged by over $15 trillion in the last quarter of 2023 year-on-year. The figure stood at around $210 trillion almost a decade ago, according to the data.

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