Yen Traders See Options Expiry Explaining Surge from Year Low
Carter Johnson, Masaki Kondo and Yumi Teso – Bloomberg
The yen jumped against the dollar in New York trading Monday after touching its weakest point this year, spurring speculation among analysts that it was partly the result of options positioning rather than Japanese authorities stepping into the market. Japan’s currency touched a year-to-date low of 151.91 per dollar, then abruptly strengthened to the 151.21 level before reversing much of the gain. The net result is that the yen was little changed on the day, leaving it down some 13% this year, the worst performance of any Group-of-10 currency.
Burry, famous for ‘Big Short,’ places bearish bet against semiconductor ETF
Carolina Mandl and Saqib Iqbal Ahmed – Reuters via Yahoo Finance
Hedge fund manager Michael Burry, whose bets against the U.S. housing market before the 2008 financial crisis were chronicled in the movie “The Big Short”, in the third quarter added a bearish options position on semiconductors, according to securities fillings released on Tuesday.
He also closed out bearish options against the broad S&P 500 and Nasdaq 100 Index, the filings showed.
‘Super’ multi-manager hedge funds are losing some of their superness; Did Kenny G call the top?
Robin Wigglesworth – Financial Times
The rise of multi-manager hedge funds – and the pay their portfolio managers are systematically harvesting in their seemingly never-ending pod-hopping – is now such a mainstream subject that it’s made it into the Sunday Times. “Inside the super hedge funds that have Wall Street running scared,” is the headline. The article below is pretty good (it’s by Oliver Shah, so not unexpectedly) but, ironically, the top of the multi-manager/multi-strategy phenomenon may already be in.
Inflation cooled off in October
Madison Hoff – Business Insider
Inflation cooled but is still above the Fed’s 2% target per the year-over-year change in the Consumer Price Index, or CPI, for October.
The Consumer Price Index increased 3.2% year over year in October, according to Bureau of Labor Statistics data released Tuesday.
Fidelity files for Vanguard-style ETF share class; Vanguard’s patent on the ability to offer ETF share classes of mutual funds expired in May
Joe Morris – Financial Times
Fidelity has filed to adopt Vanguard’s ETF multi-share class structure, becoming the third manager to do so. In two filings with the Securities and Exchange Commission, the manager proposed allowing an unspecified number of open-end mutual funds to list ETF shares. Fidelity described the applicable funds as being “in general” actively managed and pursuing a total return investment mandate.
Oil traders turn bearish, daring OPEC? to cut again
John Kemp – Reuters
Investors continued to sell petroleum futures and options last week as sentiment became the most bearish since the middle of the year, before Saudi Arabia and its OPEC? partners removed extra crude from the market.
Hedge funds and other money managers sold the equivalent of 57 million barrels in the six most important futures and options contracts over the seven days ending on Nov. 7.
Nasdaq Completes Migration of the Third U.S. Market to AWS; The Nasdaq GEMX Migration Creates Enhanced Scalability, Flexibility, and Resiliency of the Cloud Enabled Infrastructure while Delivering up to a 10% Improvement in Latency
Nasdaq, Inc. (Nasdaq: NDAQ) today announced it has successfully completed the migration of the core trading system of Nasdaq GEMX, one of Nasdaq’s six options exchanges, to Amazon Web Services (AWS). The new cloud-enabled market infrastructure, which uses AWS Outposts, delivers up to a 10% improvement in latency and the ability to more seamlessly adjust capacity in response to changing market conditions, ultimately delivering a better trading environment for market participants. GEMX processes 12 billion in daily messaging, 71% higher daily message volume than the MRX Options Exchange, which was migrated to AWS last year in December.
Regulation & Enforcement
Real Estate Investor Faces SEC Inquiry on WeWork Offer
Patrick Clark – Bloomberg
A real estate investor facing scrutiny from lenders and investors is now the subject of a government inquiry into an offer to buy shares in WeWork Inc. The US Securities and Exchange Commission has sent inquiries to Jonathan Larmore, the founder of Arciterra Cos., about a Nov. 3 press release in which an entity called Cole Capital Funds said it was seeking to buy shares in the coworking company at a significant premium, according to a person familiar with the matter who asked not to be named citing private information. The inquiry includes Larmore’s trading history in WeWork stock and options, the person said.
FTX Sues Crypto Exchange Bybit to Recover $953 Million in Cash and Assets; The lawsuit is FTX’s latest attempt to recoup assets owed to customers as it grapples with a nearly $9 billion shortfall in deposits
Becky Yerak – The Wall Street Journal
Bankrupt cryptocurrency exchange FTX has filed a lawsuit against Bybit Fintech and two affiliates to try to claw back assets valued at $953 million that were withdrawn shortly before FTX’s November 2022 collapse. The lawsuit, filed Friday in the U.S. Bankruptcy Court in Wilmington, Del., alleges that Bybit’s investment arm, Mirana, “leveraged its VIP connections to pressure FTX group employees to fulfill its withdrawal requests as soon as assets became available.”
ICBC Flies Top Executives to US in Race to Contain Hack Fallout
Jordan Robertson, Katherine Doherty, and Zheng Li – Bloomberg
Within days of a cyberattack at its US unit, members of Industrial & Commercial Bank of China Ltd.’s management were on a plane.
Officials from the world’s largest lender arrived in the US over the weekend in a hastily arranged trip to limit fallout from the incident last week, people with knowledge of the situation said. As they sought to calm markets through a steady stream of discussions and calls, one question remained unanswered: When will the stricken systems start functioning again?
What the put/call ratio is revealing about the stock market
Julie Hyman and Stephanie Mikulich – Yahoo Finance
The put/call ratio can give investors an idea of where options traders think the markets are headed. Charles Schwab Director of Trader Education Joe Mazzola says that, with the CBOE Put/Call Equity Ratio above 1, there are “still a decent amount of hedgers out there,” which tells him that even though there is some call buying “it doesn’t look like it’s overdone at this point to where it would be kind of screaming everybody’s on the same side of the trade.”
Ratio Spreads and Extrinsic Value
Dr. Jim Schultz – tastylive
One of core concepts you learn early on in your options education is that at-the-money (ATM) strikes always carry the most extrinsic value. While this nugget might seem to be nothing more than a random line barely worthy of memorization, it has particularly important implications in your trading.
Wall Street workers told to expect another year of smaller bonuses
Joshua Franklin, Stephen Gandel and Antoine Gara – Financial Times
Wall Street bonuses are set to fall this year by as much as 25 per cent, as investment bankers and money managers feel the pinch from rising interest rates that have damped dealmaking activity and curtailed new stock market listings.
An analysis by New York-based pay consultancy Johnson Associates showed that 2023 bonuses across most of Wall Street — from investment banking advisory work to sales and trading and private equity — will on average be either down or flat compared with a year earlier.