Observations & Insight
The Spread – Clearing the Air; Also, Fed Up
A margin methodology approval, blood in the eurodollar waters, a peek into a secret shop, and more bad jokes await viewers of this week’s episode of “The Spread.”
Watch the video »
Which Online Brokers Rank The Best For Options Trading?
Investor’s Business Daily
You might think that the best online brokers rated for options trading would be the ones with the highest-rated options platforms. But you would be wrong. TD Ameritrade (AMTD), TradeStation and Interactive Brokers (IBKR) had the highest-rated options platforms in our general Investor’s Business Daily Best Online Brokers survey. But for investors that actually do options trading, only Interactive Brokers stood in the top three for overall customer experience. Interactive Brokers took the top spot, followed by Charles Schwab (SCHW) and Fidelity.
Span 2 to help brokers defend margin calls
James Thursfield – FOW (SUBSCRIPTION)
CME’s new margin framework will help FCMs defend their margin calls, ED&F US’ global chief risk officer says
Citi culls HFTs from FXPB client list; HC Technologies, Jump Trading and Virtu Financial among those told to find new prime broker
Robert Mackenzie Smith – FX Week
Citi has given some of the largest electronic market-makers in currencies just 90 days to find a new prime broker. The cull is part of a wider effort to reduce risk in the bank’s foreign exchange prime brokerage (FXPB) business, which suffered a reported $180 million loss last year.
Margin requirements for futures & options in equity segment is the highest: ANMI report
Palak Shah – Business line
Is margin requirement for stock trading in India the highest compared to global peers? A research report submitted by the Association of National Exchanges Members of India (ANMI) says India is the most margin-heavy market globally.
Capital Wealth Planning’s Enhanced Dividend Income SMA Strategy Ranked Number One in Option Writing Category by Morningstar
Capital Wealth Planning, LLC (CWP) founder and chief investment officer Kevin Simpson proudly announced the firm’s Enhanced Dividend Income SMA (separately managed account) strategy ranked number one in the Morningstar option writing category out of 33 Option Writing SMA Managers. This ranking is based on a five-year time period as of March 31, 2019.
****The thing to keep in mind about options writing strategies is you’re number one until you’re not.
Animal Farm’ and Market Data: Negotiate to Be ‘More Equal’
Kelvin To, Data Boiler Technologies, LLC – TabbForum
When it comes to the market data derived from exchanges’ order books, not all market participants are created equal. The harsh reality is that a group of elite firms is able to negotiate with the exchanges for order flow in return for premium rebates.
Exchanges and Clearing
Matt Wolfe of The OCC (VIDEO)
Securities Lending Times
Matt Wolfe, vice president of product development, discusses the OCC’s renaissance initiative and technological innovation
HKEX boosts member credit risk monitoring; Hong Kong exchange’s several hundred clearing members pose complex default risk correlations, says chief risk officer
Aileen Chuang – Risk.net (SUBSCRIPTION)
Hong Kong Exchanges and Clearing’s new chief risk officer says monitoring the creditworthiness of its members is of importance, particularly given the exchange’s propensity to attract a large number of smaller clearing members. Bipin Patel said its membership currently numbers between 700 and 850 – which is far more than many other exchanges in the region. By comparison, Japan has little more than 100 clearing members.
Nasdaq Promotes Tal Cohen to Executive Vice President, North American Market Services; Tom Wittman to become Executive Advisor and to retire from Nasdaq at year-end
Nasdaq, Inc. today announced it has named Tal Cohen as Executive Vice President, North American Market Services, effective July 1. In this role, Cohen will be responsible for driving the strategy and success of our trading businesses across cash equities, commodities, derivatives, and trade management services in Nasdaq’s U.S. and Canadian markets. In his role, in addition to directing the strategy of the business, Cohen will oversee Nasdaq’s North American trading products across their lifecycle and will manage client relationships and market operations. He will report to Adena Friedman, President and CEO, Nasdaq.
Regulation & Enforcement
U.S. banks clear first hurdle of Federal Reserve’s annual stress test
Pete Schroeder – Reuters
The 18 largest banks operating in the United States took the first step toward doling out capital on dividends, share buybacks and other investments on Friday, after clearing the first stage of their yearly health checks with the U.S. Federal Reserve that assess their ability to weather a major economic downturn.
Privacy laws crimp bank efforts to snoop on traders; Banks want to surveil employees to prevent malfeasance. GDPR is hobbling those efforts
Alexander Campbell – Risk.net (SUBSCRIPTION)
Never before have computers been so adept at watching the people who use them. And at banks, privacy restrictions may well stop some of that. Not just that, but some surveillance may have to be rolled back. Data protection laws, such as the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act, are imposing new boundaries on the ways in which employee and customer data can be used.
A conversation with the CFTC regulator – Christopher Giancarlo
Chris Brummer – Roll Call Podcast
Fintech Beat’s Chris Brummer sits down with Commodity Futures Trading Commission Chairman Christopher Giancarlo – where they talk about financial technology innovation, breaking down barriers and what keeps him up at night.
Goldman Sachs says value investing is still alive if you play it with this twist
Yun Li – CNBC
The valuation gap between expensive and cheap stocks is now the widest in nine years, which has historically foreshadowed strong performance for value names, according to Goldman.
…The so-called high Sharpe ratio basket, consisting of 50 S&P 500 stocks with the highest prospective Sharpe ratios, includes laggards and value tilts by construction, Goldman said. Sharpe ratio is a measure of a stock’s performance relative to its volatility. Goldman uses consensus price targets and options six-month implied volatility to measure Sharpe ratios.
No, the Stock Market Is Not in a Bubble
Mark Hulbert – Barron’s
Repeat after me: The stock market is not in a bubble. I suppose it was inevitable that the stock market’s new all-time high last week would cause bubble talk to bubble up, so to speak. Yet, it shouldn’t need repeating, calling something a bubble doesn’t make it a bubble.
To be sure, I’m not predicting that happy days are here again. The absence of a bubble doesn’t mean that a bear market isn’t imminent. But surely there is a difference between a bear market and a bubble bursting.
Bernie Sanders wants to make Wall Street pay off the US’s $1.6 trillion in student debt
Carmen Reinicke – Markets Insider
Wall Street should pay for student loan debt relief, at least according to Bernie Sanders.
The Vermont senator and 2020 presidential hopeful is set to release a plan Monday ahead of the Democratic debates later this week that would propose cancelling the outstanding $1.6 trillion of student loan debts held by 45 million Americans in the US.