JLN Options: Well-timed options trades before NYSE deal raise eyebrows

Dec 21, 2012

Lead Stories Well-timed options trades before NYSE deal raise eyebrows
Doris Frankel, Reuters
A surge in bullish options bets on NYSE Euronext shares ahead of Thursday’s announced merger has raised eyebrows among options strategists.
** This always surprises me (that someone would try this if they had insider knowledge).  As soon as big news of a merger like this happens the first thing everyone does is look to see who was “lucky” enough to win big with a well-timed trade.  At the very least those people are going to get a lot of scrutiny making it difficult to get away with. Of course they could have just been very lucky. –JB Bad Day for Bulls, Big Day for Volatility
Brendan Conway, Barron’s
Surprise! House Speaker John Boehner flubbed “Plan B,” which means the “fiscal cliff” debate will come down to the wire next week. Or we’ll just hurtle off the cliff in a way that raises the chance of a pretty uncomfortable January and February.
http://jlne.ws/TGg4Dd Volatility Bets Jump 14% Premarket as ‘Cliff’ Worries Mount
Brendan Conway, Barron’s
The tone in markets has stayed pretty negative the morning after House Speaker John Boehner shelved a politically unworkable “Plan B” to avert the set of tax increases and spending cuts due in the New Year.
Exchange Sale Reflects New Realities of Trading
Ben Protess and Nathaniel Popper, Bloomberg
On a warm day in Boca Raton, Fla., the host of a reception for an annual financial conference was not a big bank or a powerful exchange as in years past, but a young firm based in Atlanta.
http://jlne.ws/VaCXRk CME Seen Next Predator as Speculators Mull NYSE: Real M&A
Tara Lachapelle, Bloomberg
IntercontinentalExchange (ICE) Inc.’s deal to buy NYSE Euronext is pressuring CME Group Inc. (CME), the world’s largest operator of futures exchanges, to mount a response.
**  Is this consolidation a good thing for investors?  I am not sure.  My gut instinct is that more competition is better than less competition. If you have an opinion email me.  –JB High-Speed Trade Giants to Merge
Nathaniel Popper, The New York Times
The merger of two computer-driven trading firms is set to create a new company that market analysts say would most likely be the single largest player in the trading of American stocks, and a dominant force in several other markets.
http://jlne.ws/TGDmce ICE/NYSE deal a winner, say experts
Daniel P. Collins, Michael McFarlin, Futures
The proposed acquisition of NYSE Euronext by Intercontinental Exchange (ICE) would be highly profitable for ICE leading to a 10% plus increase in ICE stock according to a preliminary analysis by financial services firm Keefe, Bruyette & Woods (KBW).
http://jlne.ws/TGDvfE Ten questions raised by ICE-NYSE deal
Here we ask 10 key questions raised by the merger.
http://jlne.ws/TGDLez Swaps ‘Armageddon’ Lingers as New Rules Concentrate Risk
Matthew Leising and Bradley Keoun, Bloomberg
On a good day, 27-year-old Bobby Timberlake at CME Group Inc. (CME) in Chicago rounds up $2.5 billion from the world’s biggest traders and banks such as JPMorgan Chase & Co. (JPM) to cover their losses in the $639 trillion derivatives markets.


CFTC to delay some swaps rules
Shahien Nasiripour and Stephen Foley, Financial Times
The US Commodity Futures Trading Commission is to announce Friday a temporary reprieve from stringent new derivatives rules, people familiar with the matter said.
Until July, swaps dealers engaging in cross-border derivatives activities will be spared from enforcement of new rules so long as they are making a “good faith” effort to comply. The delay follows numerous others granted in recent weeks.

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