Why shorting Trump’s DJT stock could cost you a 500% fee

Apr 4, 2024

Observations & Insight

If you are attending the Options Conference in Asheville, NC on April 30 to May 2 and have news and would like to be interviewed by John Lothian News, please contact me at johnlothian@johnlothian.com to set it up. ~JJL

Lead Stories

Why shorting Trump’s DJT stock could cost you a 500% fee
Tomi Kilgore – MarketWatch
Shares of Trump Media & Technology Group Corp. have fallen since they began trading last week with former President Donald Trump’s initials as the ticker symbol – but don’t blame short sellers for any further weakness. If the social-media platform’s stock DJT keeps falling, it will be because of selling by former bulls who are now getting out of their investments, according to Ihor Dusaniwsky, managing director of financial analytics at S3 Partners. That’s because there aren’t many shares available to short, and the cost to make a bearish bet can be prohibitive.
/jlne.ws/3vHLHZV

Clear Street to offer clearing services in listed US equities and options; The move follows the successful third tranche of Clear Street’s Series B funding in December 2023 which raised the firm’s valuation to $2.1 billion.
Claudia Preece – The Trade
Clear Street has launched clearing services for registered market makers in listed US equities and options. The move represents Clear Street’s first successful entry into the professional clearing market in almost a decade. The offering leverages the firm’s proprietary, cloud-native prime brokerage platform, to allow users comprehensive insight into effective strategies.
/jlne.ws/3VLREzr

This ETF is beating the S&P 500 — and it’s completely different from the index
Philip van Doorn – MarketWatch
Every day you can see headlines warning that the stock market is overvalued. These warnings for U.S. investors typically center on the S&P 500. You might find it interesting to look at an example of an index fund that holds shares of medium-sized companies, with a quality approach that has helped it to outperform the indexes.
/jlne.ws/49EWEJP

Crypto Trading Volume Reached All-Time High During March Rally; Spot trading volume doubled to $2.94 trillion in March: CCData; Binance saw its largest yearly gain in spot, researcher says
María Paula Mijares Torres – Bloomberg
The combined volume of crypto spot and derivatives trading on centralized exchanges almost doubled to an all-time high of $9.1 trillion in March while Bitcoin reached a record, according to a CCData.
Spot trading outpaced the gains seen in derivatives, with volume rising 108% to $2.94 trillion, the highest monthly figure since May 2021, CCData’s March Exchange review report said. Binance, the world’s largest crypto exchange, saw trading volume reach the highest since May 2021, with spot jumping 121% to $1.12 trillion and derivatives increasing 89.7% to $2.91 trillion.
/jlne.ws/3U5eUHG

News-powered hedge fund raises $100mn to trade on reporters’ scoops; Target of Hunterbrook’s first story questions ethics of it taking a short position in its stock
Kate Duguid and Joshua Franklin – Financial Times
A US hedge fund has raised $100mn to make trades based on articles by its affiliated newsroom, launching a novel experiment in funding investigative reporting as the media industry suffers a fresh round of lay-offs. The business is an effort to pair the sort of investigative journalism typically done by newsrooms with a long-short hedge fund. The fund, Hunterbrook Capital, places trades based on scoops uncovered by reporters at the newsroom, Hunterbrook Media, which is separated by a layer of compliance. Those scoops would only be based on publicly available information.
/jlne.ws/3THUMKd

Goldman Sees Korea Share-Sale Boom on Ongoing Corporate Reforms; More share sales from the industrial sector are expected; Korean blocks, placements jumped to record $4.1 billion in 1Q
Filipe Pacheco and Youkyung Lee – Bloomberg
South Korean companies may boost share sales as authorities look to enhance corporate governance and lift a short-selling ban, according to Goldman Sachs Group Inc. A plan to encourage firms to improve valuations through better management practices should bring more share sales from low-value traditional businesses, including industrials, said Phyllis Wang, the head of Asia ex-Japan ECM syndicate at Goldman Sachs.
/jlne.ws/3TNpqC0

Commodity trading profits hit record $104bn last year; New entrants including tech-focused traders and hedge funds helped drive unexpected increase in earnings
Tom Wilson – Financial Times
The commodity trading industry made record estimated profits of $104bn last year, a McKinsey report said, even as market volatility decreased and earnings at some of the biggest groups fell. The surprise increase from 2022, when the fallout from the war in Ukraine pushed up prices and supercharged profits, was driven by a wave of new entrants into the sector – including tech-focused traders and hedge funds – and rising returns from power trading activities, according to a report by consultants McKinsey.
/jlne.ws/49mjXYE

Bitcoin ETF Trading Volumes Tripled in March as the Largest Cryptocurrency Hit Record Highs; Trading volumes for the exchange-traded funds soared to $110 billion, three times higher than either January or February, led by BlackRock’s IBIT.
Shaurya Malwa – CoinDesk
U.S.-listed bitcoin (BTC) exchange-traded funds (ETFs) captured over $110 billion in trading volume in March, a figure three times higher than the volumes in January and February, as the largest cryptocurrency soared to record highs. Trading was led by BlackRock’s IBIT, which comprised almost 50% of the total, Bloomberg Intelligence analyst Eric Balchunas said on X. Grayscale’s GBTC was next with 20% of the total share, followed by Fidelity’s FBTC at 17%.
/jlne.ws/4aEUb2S

Exchanges

Cboe Global Markets Reports Trading Volume for March 2024
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading derivatives and securities exchange network, today reported March 2024 trading volume statistics across its global business lines and provided guidance for selected revenue per contract/net revenue capture metrics for the first quarter of 2024.
The data sheet “Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report” contains an overview of certain March trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
/jlne.ws/3U6DTug

Cboe Clear Europe adds two key players to launch of securities financing transactions clearing service; Bank of America and State Street are set to support the service from its launch, anticipated in Q3 2024, adding to the likes of BNY Mellon, Citi and JP Morgan who are already behind the initiative.
Sophia Thompson – The Trade
Cboe Clear Europe has garnered additional support from key players to launch its Central Counterparty (CCP) clearing service for securities financing transactions (SFTs). With Bank of America and State Street onboard, the total number of launch participants now stands at nine, encompassing banks, clearing firms, asset managers and custodians.
/jlne.ws/3PQQ1g9

Cboe Europe: Driving differentiation in lit order books
The Trade
Natan Tiefenbrun, president for North American and European equities at Cboe Global Markets, and Maria Salamanca Mejia, head of EMEA market structure at Morgan Stanley, discuss the lit order book landscape and why a more in-depth analysis of the venues can enhance execution outcomes for clients.
/jlne.ws/4aDygcf

Strategy

Nvidia
Cboe (video)
In #Vol411, Scott Bauer @cboesib gives updates on the status of the $VIX futures curve, yesterday’s busy options trading in $DIS and $NVDA and more.
/jlne.ws/3U2vGqS

Education

A Financial Advisor’s Primer on FLEX Options
Karrie Gordon – ETF Trends
Historically, alternative investments have proven their value in portfolios, adding diversified return streams, enhancing income, and hedging risk. The widespread rollout of listed options strategies means that a variety of option types are now available to investors.
FLEX options are exactly what their name implies: flexible exchange options. Cboe Global Markets launched these options in 1993, and they now trade on many exchanges. FLEX options stand out by providing several benefits over standardized listed options.
/jlne.ws/3U23Mv5

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