JLN Options: Wall Street silent as GOP eyes derivatives

Jan 30, 2013

New Restoring Customer Confidence Video
The ninth video in our Restoring Customer Confidence series deals with securing segregated funds. Each week we will post a new idea answering the question – how do you restore customer confidence and bring traders back?

Restoring Customer Confidence More ideas»
Customer Segregation: Keep It Separate

Customer Segregation: Keep It Separate

There has been much talk about protecting customer funds but keeping them in segregated accounts outside of the brokerage house. John Omahen, vice president of post trade derivatives solutions at SunGard, talks about the value in moving customer funds to a clearing house. Such segregation could help not only protect customer funds, but also could create lower financing costs.

Watch the video »

Also see — Customer Segregation: A Clear View


About the Restoring Customer Confidence video series
In the aftermath of the MF Global collapse, fraud at Peregrine Financial Group and high profile high-frequency trading shocks, John Lothian News asks – how do you restore customer confidence and bring traders back? Previous videos:

Visit the video series page on MarketsWiki.tv over the next several weeks for new ideas and solutions.


Wall Street silent as GOP eyes derivatives
Peter Schroeder and Bernie Becker, The Hill
Wall Street is feeling new pressure from an unlikely source — the top Republican tax writer in the House.
Rep. Dave Camp (R-Mich.), the chairman of the Ways and Means Committee, released a draft plan last week that he says would modernize the treatment of derivatives and other complex financial instruments that often have similar economic effects but very different tax rules.
**Politicians have tried to change the 60/40 tax treatment for derivatives several times before. Will this be the year it actually happens? — SR

Option traders bet on more euro gains in coming weeks
Anirban Nag, Reuters
A rally in the euro to it highest in 14 months against the dollar shows no sign of fading with investors in the options market betting for the first time in three years on near-term gains in the single currency.

Global Realignment Sparks Revival in Foreign-Exchange Market 
Stephen L. Bernard and Clare Connaghan, The Wall Street Journal
After a year that saw currency trading volume decline for the first time since the global financial crisis, foreign-exchange trading has sprung back to life this year as some major shifts in key exchange rates have pulled players back into the market.

Hedging The Great Unwind – Second Highest Treasury Put Volume On Record Hits The Tape
Zero Hedge
In early June 2007, Treasury futures saw their largest-ever put volume traded (821,978 contracts) and within a few days, Treasury yields had peaked at 5.32% and never looked back.

Off-Exchange Volume Spikes to Record Levels
Tom Steinert-Threlkeld, Securities Technology Monitor
Off-exchange trading appears to be spiking at the start of the year.
On Monday, 2.4 billion shares were traded on dark pools, broker pools and other “non-exchange” venues, according to BATS Global Markets data that relies on the Trade Reporting Facility of the Financial Industry Regulatory Authority. That amounted to 38.9% of the 6.3 billion shares traded on all equities venues, including public exchanges.

Industry “not ready” for OTC derivatives reform
Elliott Holley, Banking Technology
Four out of five financial institutions are not ready for new regulations governing the trading, reporting and clearing of OTC derivatives, according to a new survey by communications company IPC.

What the VIX Is Telling Us About Market Direction
The VIX (^VIX) has now risen for four straight days, albeit from five-year lows. But the VIX has done that while the S&P 500 Index (INDEXSP:.INX) has actually ticked gradually higher, as it’s up 0.5% on balance in those four days.  A large portion of the VIX rise is in anticipation of the heavy economic calendar taking place this week (calendar here), with the FOMC decision tomorrow at the forefront.


CME Group to reduce nearly non-stop grain trading cycle
Tom Polansek, Reuters
CME Group said on Tuesday it will reduce the nearly non-stop trading cycle for its U.S. grain and oilseed markets, and supported a trading halt at all exchanges during the release of major agricultural reports. CME, which owns the Chicago Board of Trade, said it had not yet determined exactly what its new trading hours will be.

ISE Strengthens Focus on ETF and Index Development with Introduction of ISE ETF Ventures
Press Release (ISE)
The International Securities Exchange (ISE) today announced that its new product development group will now be known as ISE ETF Ventures. The new name reflects the group’s evolving focus and expanded capabilities in the ETF area. With ISE ETF Ventures, ISE has moved beyond its established expertise in index development to offer partner firms a full suite of capabilities to support the launch of new ETFs.
http://jlne.ws/XK2uh9 (PDF)

ICE’s CEO says has fielded calls about selling Euronext
Christine Stebbins, Reuters
IntercontinentalExchange Inc (ICE.N) has received inquiries from rivals interested in buying NYSE Euronext’s (NYX.N) European stock exchanges once ICE completes its planned purchase of the New York-based exchange operator, ICE’s chief executive said on Monday.

NYSE Euronext Companies Offer Enhanced Corporate Governance Solutions  
Press Release (NYSE Euronext)
Corpedia and Corporate Board Member, both NYSE Euronext Companies, have partnered to offer a multi-tiered suite of products to help companies more effectively manage corporate governance responsibilities. The Corporate Governance Leadership Suite consists of three tracks, which include comprehensive tools and resources to help senior governance officers advance the dialogue for compliance and governance best practices.

Nasdaq to Merge Index, Data Units in Reorganization
Leslie Picker, Bloomberg
Nasdaq OMX Group Inc. (NDAQ), America’s second-largest equity market operator, said it merged its data and index businesses as part of a reorganization.

Fee Schedule Changes for EDGA and EDGX Effective February 1, 2013
Press Release (DirectEdge)
Direct Edge will introduce the following pricing changes effective Friday, February 1, 2013, pending filing with the Securities and Exchange Commission (SEC). 


How to Profit From the Strangle 
Steven M. Sears, Barron’s
Options trading patterns are changing as investors use puts and calls in different ways to adjust to low volatility levels and rising stock prices.

Proof That The Markets Can Still Move Higher
Christopher Ebert, Market Playground
Proof is a strong word when it is applied to the stock market. Technically the only true means of proof comes from hindsight. But there are proven methods of analyzing the stock market that reveal telltale signs about what the market is going to do next.

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