MarketVoice
Tech trends in 2024
Big Tech partnerships, operational resilience and GenAI experimentation will continue to be dominant themes this year.
READ MOREViewpoint – Treasury clearing, portfolio margining and white whales
There are tales in literature and lore of protagonists who obsess over certain quests but who are never able to obtain their elusive capture. For King Arthur, it was the Holy Grail. For Ahab, it was Moby Dick. For Casey’s at bat, it was the homerun. And for me, it’s portfolio margining of cash and futures in the US Treasury market. With the recent mandate by the Securities and Exchange Commission (SEC) to clear certain treasuries and repos, this goal is again coming into focus.
Viewpoint
1 March 2024
Viewpoint – Brokers and exchanges ramp up resources for retail traders
Retail trading is one of the fastest growing dimensions of the exchange-traded derivatives markets. This trend picked up speed during the pandemic, and it shows no signs of slowing down. According to the Commodity Futures Trading Commission, US retail trading volume in futures contracts now averages about 50% higher than the pre-pandemic era.
Read MoreLatest News
US options industry leaders wrestle with constraints on growth
Investors are flocking to so-called "zero day" options and investors are calling for longer trading hours so they can trade in the evenings and on weekends. Both trends could lead to further growth in trading volumes, but at a cost. Industry executives warn that longer trading hours will increase the operational burden on brokers, clearing firms, market makers and exchanges. The same challenge arises with adding more expirations to support the zero day trend; the industry is already dealing with a huge number of contracts and adding more will put further strain on its capacity.
CONTINUE READINGPremium turnover in Indian options hits $150 billion
In March, the turnover in index options on NSE India was equivalent to 61% of the turnover in index options on CBOE, Nasdaq and other US options exchanges. When ETF options are included, the NSE India turnover was equivalent to 43% of the comparable contracts in the US.
CONTINUE READINGCFTC advances event contract proposal in contentious meeting
On 10 May, the US Commodity Futures Trading Commission voted 3-2 to advance a highly anticipated and contentious proposed rule regarding event contracts. The proposed rule advanced with the support of CFTC Chairman Rostin Behnam and Commissioners Kristin Johnson and Christy Goldsmith Romero. Republican Commissioners Summer Mersinger and Caroline Pham raised significant concerns about the proposal during an open meeting and opposed the proposed rule.
CONTINUE READINGExchange leaders caution options industry on zero day expansion plans
Senior executives for two of the largest market operators in the US options industry sounded a note of caution on the boom in the trading of options with zero days to expiration, saying that brokers and exchanges should carefully consider the costs and benefits before extending this trend into single stock options.
CONTINUE READINGLME nickel futures - bouncing back
In the two years after the London Metal Exchange was forced to close its nickel market and cancel $12 billion in trades, the exchange has worked hard to win back the confidence of market participants through a number of reforms. Trading volumes are rising again, but open interest has not fully recovered, and two new competitors have emerged.
CONTINUE READINGDerivatives industry moving to “Cloud 2.0”: Google’s Bhat
Industry experts discuss the structural shifts they are seeing as the derivatives industry moves to modernise its markets.
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