Will Today’s Bitcoin Options Expiry Send Markets Lower?

Jun 14, 2024

Observations & Insight

Cboe reported yesterday that the largest FLEX options trade in history was executed: 643,500 ProShares Bitcoin Strategy ETF (BITO) call spreads traded via Cboe Silexx on Cboe’s C1 exchange. Cboe said FLEX options volumes have continued to grow year over year with 2024 average daily volume of 600k+ contracts. ~JJL

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A Milestone in Indexing: FTSE Russell Celebrates 40 Years with Russell Reconstitution
JohnLothianNews.com

In a recent roundtable, we spoke with Catherine Yoshimoto, director of product management at FTSE Russell; Paul Woolman, Managing Director – Global Head of Equity Index Products from CME Group; and Rick Rosenthal, Managing Director – Global Head of Equity Index Products at Cboe Global Markets. They shared insights on the significance of this year’s Russell Reconstitution and its implications for market participants.

Watch the video »

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Connamara CEO Prioritizes Regulatory Compliance for Exchange Clients
JohnLothianNews.com

Jim Downs, CEO of Connamara Technologies, a provider of exchange infrastructure technology, emphasizes the importance of regulatory compliance for clients during an interview at the FIA’s International Futures Industry Conference in Boca Raton, FL.

Watch the video »

Lead Stories

Will Today’s Bitcoin Options Expiry Send Markets Lower?
Martin Young – CryptoPotato
Crypto options expiry day is upon us again and today will see more than $2 billion in notional value derivatives expire.
There are around 20,000 Bitcoin options expiring with a notional value of $1.35 billion. However, today’s expiry event is much smaller than in previous weeks, so market impact is likely to be minimal.
Nevertheless, a large Bitcoin options expiry event will occur on June 28, with $6.7 billion in notional value derivatives expiring.
/jlne.ws/4b3v8Gt

Roaring Kitty becomes the 4th largest GameStop shareholder after nearly doubling his position to 9 million shares
Matthew Fox – Markets Insider
Keith Gill, better known as Roaring Kitty on social media, appears to have nearly doubled his position in GameStop stock.
According to a screenshot of his E*Trade portfolio posted to Reddit on Thursday, Gill now owns nine million shares of GameStop.
Gill had previously owned 5 million shares of GameStop and 120,000 call option contracts with a $20 strike price that were set to expire next week.
/jlne.ws/45q2QEQ

Fireside Friday with… T. Rowe Price’s Matt Howell; Head of derivatives and multi-asset trading solutions at T. Rowe Price, Matt Howell, sits down with The TRADE to unpack some of the key themes when it comes to equity options, swaps and index futures, including industry talking points for the year ahead, methods for leveraging transaction cost analysis (TCA), and how to achieve best execution.
Annabel Smith – The Trade
How do equity options, swaps and index futures differ when it comes to achieving best execution? When thinking about best execution in the derivative space it is critical to consider all the inputs that go into measuring the outcome for the portfolio. Unlike cash instruments, there are significantly more variables beyond the prevailing market price and in the OTC world there may not even be a readily available transparent market price to base execution off.
/jlne.ws/3RrGyN3

Why South Korea Banned Short Selling and When Could Ban Be Lifted?
Youkyung Lee – Bloomberg
Short sellers are facing the heat in South Korea after regulators extended a ban on the practice of selling borrowed shares. Their goal is to stop big investment banks engaging in illicit trading practices that could erode public trust in markets. While South Korean shares rallied after the ban was imposed in November, the gains soon faded. Critics said it makes the market less transparent, and less attractive to global investors.
/jlne.ws/3XjOnZb

‘Big Short’ Famed Investor Steve Eisman Dismisses Recession Fears, Cites US Economy’s ‘Story-Time’ As Proof Of Strength
Benzinga via Markets Insider
Renowned investor Steve Eisman has expressed confidence in the stability of the U.S. economy, dismissing fears of an impending recession.
What Happened: Eisman, who is known for predicting the 2008 housing crash, stated in a recent interview with CNBC that the U.S. economy is resilient. He attributes this to the strong market performance driven by investments in artificial intelligence and infrastructure.
/jlne.ws/4enIMXB

The Hottest Investment for Hedge Funds Is Other Hedge Funds; Big firms like Millennium are so flush with cash they’re outsourcing it to other firms
Peter Rudegeair – The Wall Street Journal
Veteran investor Jonathan Heller recently launched his own hedge-fund firm after amassing about $1 billion. All of the initial money came from another hedge fund.
Izzy Englander’s Millennium Management staked Heller with an option to commit more money over time, people familiar with the matter said. Heller’s firm, Helix Partners Management, trades securities and derivatives tied to companies that are under financial strain or bankrupt, including the former parent company of Silicon Valley Bank.

NSE chief cautions retail investors against derivatives trading
The Hindu
He cautioned that while derivatives have their utility, it should only be traded by those who fully understand the risks and have the capacity to manage them.
/jlne.ws/3RpbsFW

Options data points to a quiet summer ahead for crypto market, says QCP Capital
Brian McGleenon – TheBlock
Analysts from QCP Capital predict a summer lull in the crypto market, anticipating lower trading volatility for bitcoin based on options data.
The analysts added that ether options are currently exhibiting higher implied volatility compared to bitcoin options.
According to analysts, the distribution of bitcoin and ether options suggests that the crypto market may be on the verge of a summer lull in trading activity.
/jlne.ws/3Rs9PXX

Exchanges

Moscow Exchange to open stock, derivatives markets for non-residents from “friendly” countries
Reuters
The Moscow Exchange said on Tuesday that non-residents from countries that have not imposed sanctions against Russia would be permitted to trade on its stock and derivatives markets from Aug. 8.
Access to these markets would be also given to non-residents whose final beneficiaries are Russian entities or persons from the same date, it added in a statement.
/jlne.ws/4cbOnyy

Regulation & Enforcement

Illegal short selling trades in South Korea could now get you life in prison
Youkyung Lee and Bloomberg – Fortune
South Korea is extending a ban on stock short selling through March 30 next year and planning harsher penalties for illegal trades.
/jlne.ws/3KFVROu

Strategy

3 Options Strategies for Equity Investing
Karrie Gordon – ETFdb.com
Options-based strategies remain popular with equity investors in a year of ongoing market volatility and uncertainty. Advisors and investors need look no further than the recently launched Fidelity options-based ETFs for their equity investing needs.
/jlne.ws/3XmJFK0

Expiration
Cboe (Video)
In #Vol411, Dan Deming @Djd551 takes a look at 10-day & 30-day realized volatility, the #VIX futures term structure, data & events to keep an eye on next week and more.
/jlne.ws/3xtzt7U

Wall Street Starts Calling Time on ESG Labels After Backlash

Wall Street Starts Calling Time on ESG Labels After Backlash

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The Spread

Traders Betting on China Easing Boost Bearish Options on Banks

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