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Technological advancements and the demand for low-cost, fast trade executions could drive growth for electronic trading companies.
CME Group Inc.
Intercontinental Exchange, Inc.
Thomson Reuters Corporation
Interactive Brokers Group, Inc.
MarketAxess Holdings Inc.
Cboe Global Markets, Inc.
Virtu Financial, Inc.
BGC Partners, Inc.
(Bloomberg) -- Bitcoin is off to its best start to a year since 2012, gaining about 20% in two weeks amid a renewed enthusiasm that is reviving memories of the mania of a few years ago.The world’s largest virtual coin rallied after climbing out of the downward price channel it’s been trading in for weeks, rising as much as 8.9% to $8,854, the highest since November. So-called altcoins were doing even better, with Dash and Bitcoin SV more than doubling and Bitcoin Cash up 60%.“When Bitcoin goes up, our customers usually start buying altcoins as they tend to follow the leader,” said Steve Ehrlich, chief executive officer of crypto-asset broker Voyager Digital.As was the case during the 1,400% surge that took place in 2017 that pushed Bitcoin into the mainstream, multiple reasons are being cited for the optimism. The move upward coincides with the debut of new options linked to the digital currency.“The price was slated to move up in general and the CME launch probably added fuel to it,” said Vijay Ayyar, Singapore-based head of business development at crypto exchange Luno, referring to CME Group Inc. beginning to trade options on Bitcoin futures. “Most people think this could be the beginning of a new uptrend.”The latest rally appears to be a breakout following an extended downturn going back to August. Gains will remain volatile unless Bitcoin is able to breach the $9,500 level, “which would indicate a higher high for the first time,” Ayyar said.Bitcoin’s almost 20% gain in the first two weeks of the year followed a volatile 2019, in which early optimism from investors over the announcement of Facebook Inc.’s Libra crypto project gave way to skepticism and intense regulatory scrutiny. Bitcoin still almost doubled last year.The wider industry continues to work toward mainstream adoption while awaiting greater regulatory clarity in markets including the U.S. on issues such as a Bitcoin ETF product. Meanwhile, there is widespread debate whether the upcoming “halving” -- a scheduled reduction in the amount of Bitcoin produced in mining to control inflation -- will serve as a fresh driver for gains.\--With assistance from Matt Turner and Kenneth Sexton.To contact the reporters on this story: Vildana Hajric in New York at firstname.lastname@example.org;Eric Lam in Hong Kong at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Cecile Gutscher, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
(Bloomberg) -- Institutional interest in Bitcoin-related contracts appears to be building and market measures indicate high anticipation of the launch of CME Group Inc. options on Jan. 13, according to JPMorgan Chase & Co.While a consortium known as Bakkt, which includes New York Stock Exchange parent Intercontinental Exchange Inc., began offering options last month, volumes and open interest have been “rather small,” strategists led by Nikolaos Panigirtzoglou wrote in a note Jan. 10. Given the dominance of CME in trading Bitcoin futures on regulated exchanges, this new offering may change things, they said.Read: Bitcoin Options Introduction Subdued in Wake of Futures Letdown“There has been a step increase in the activity of the underlying CME futures contract” over the past few days, Panigirtzoglou wrote, noting that open interest has increased 69% from year-end, and that the number of large open-interest holders has grown. “This unusually strong activity over the past few days likely reflects the high anticipation among market participants of the option contract.”Introduction of new Bitcoin contracts has a mixed track record. At times it has appeared to be a drag on the price, such as when ICE debuted its new futures contract in September. And the price peak around $19,000 in December 2017 occurred just as CME and Cboe Global Markets Inc. launched futures on the world’s largest cryptocurrency.Bitcoin was up 2.1% to $8,209.42 as of 11 a.m. in Hong Kong, according to Bitstamp pricing, near its highest levels since mid-November.Separately, Bitcoin’s intrinsic value has been rising, but remains below the market price following a significant divergence in the middle of last year, the report said. JPMorgan calculates intrinsic value by treating Bitcoin as a commodity and looking at the marginal cost of production including computational power employed and cost of electricity.“The market price has declined by nearly 40% from its peak while the intrinsic value has risen by around 10%,” Panigirtzoglou wrote. But “the gap has not yet fully closed, suggesting some downside risk remains.”To contact the reporter on this story: Joanna Ossinger in Singapore at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Shamim Adam, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
Nasdaq (NDAQ) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
CBOE (CBOE) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
From understanding your risk tolerance to maintaining emotional control, achieving your retirement goals takes a much different investing approach than regular stock trading.
Retailers closed more than 9,000 stores last year and news that Pier 1 will close 450 this year signals more trouble for traditional retailers this year.
(Bloomberg) -- Options on SOFR futures became available for trading Monday, and 10 contracts changed hands -- five lots of a straddle, in which a put and a call with the same strike are bought, anticipating an increase in volatility.The trade involved the 98.625 strike in December 2020 options on three-month SOFR futures, according to open-interest data released by CME Group Inc., which lists the contracts. The straddles were traded at a price of 37 ticks, according to several traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly.The Secured Overnight Financing Rate is a reference rate administered by the Federal Reserve Bank of New York that’s intended to replace the scandal-plagued London Interbank Offered Rate, which is under threat of extinction.SOFR futures were rolled out in 2018 by CME, whose eurodollar futures contract –- with settlement based on Libor –- remains its most-traded product. CME has proposed that in the event that Libor becomes unavailable, existing eurodollar futures and options contracts will be settled based on SOFR.A buyer of the straddle benefits from an increase in implied or realized volatility in the underlying futures. In recent months, volatility has increased as the market priced in more Fed policy easing, and vice versa.For qualifying market makers, CME is waiving fees until June 30 for options on three-month SOFR futures and is giving a $1 fee credit for each transaction, capped at $30,000 per month.Bid and offer prices were quoted Monday for several dozen put and call strikes, most of which were within five strikes of being at-the-money, according to a trader. Most of the spreads were 1.5-2 basis points.In eurodollar options, spreads for near-the-money strikes are generally not more than 0.5 basis point. However, open interest in the underlying futures dwarfs open interest in SOFR futures. For example, open interest exceeds 1 million in the four nearest quarterly eurodollar contracts. Open interest in SOFR futures is less than 400,000 contracts in total.At least one major trader said it’s making markets in SOFR options. DRW Holdings LLC, one of the world’s biggest high-frequency traders, is doing so both electronically and via open outcry, according to a spokesperson.(Adds open-interest data in second paragraph, fee-waiver condition in sixth paragraph)To contact the reporter on this story: Elizabeth Stanton in New York at email@example.comTo contact the editors responsible for this story: Benjamin Purvis at firstname.lastname@example.org, Mark TannenbaumFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
BGC Partners, Inc. (NASDAQ:BGCP), which is in the capital markets business, and is based in United States, saw a...
Thomson Reuters Corp (TSX:TRI)(NYSE:TRI) shares substantial profits with loyal shareholders in the Canadian stock market via special dividends and share buybacks.
Nasdaq (NDAQ) remains poised for growth on strategic buyouts, technological expansion and capital deployment offset by higher expenses.
(Bloomberg) -- After a stunning rally that brought shareholders an almost 2,600% return, MarketAxess Holdings Inc. is exiting the 2010s as the decade’s undisputed champion in the S&P 500 financials index.The electronic trading company’s 10-year rally was more than triple that of the next-best performing stocks in the index -- Moody’s Corp., MSCI Inc. and S&P Global Inc., which each gained more than 700%. Overall, the 66-member gauge increased 163%.MarketAxess has been a “play on a theme that’s worked exceptionally well over the years -– automation of financial trading markets,” Sandler O’Neill’s Richard Repetto said by email. “The corporate credit market has been slower and more difficult to electronify, but it is becoming clearer it’s happening more every year,” he said. “Investors have seen this movie before in numerous other asset classes!”Unlike “mainstream” financial companies, which faced a prolonged period of lower interest rates and tighter regulation, MarketAxess saw its product volumes fueled by “technology innovations and demand for more efficient and transparent fixed-income trading,” Bloomberg Intelligence’s Paul Gulberg said. That helped the company take market share, he said.MarketAxess “stayed under the radar, until Tradeweb Markets Inc. created some noise and recognition this year,” according to Gulberg. The bond and derivative trading platform went public in April and was the best-performing of the eight U.S. IPOs exceeding $1 billion this year, according to data compiled by Bloomberg. The shares have rallied more than 70% from their offer price, buoyed by the same optimism about electronic trading.MarketAxess has soared more than 3,300% since its IPO in November 2004, beating a 178% gain for the S&P 500 and an increase of just 29% for the S&P 500 financials. The stock didn’t look so appealing during the financial crisis, when it dipped to a record low close of $4.31 on Oct. 17, 2008, according to data compiled by Bloomberg.Repetto said he reminds CEO Richard McVey of that every so often, as “it’s a tribute to his perseverance as he’s been there since April 2000.”To contact the reporter on this story: Felice Maranz in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Cristin Flanagan, Richard RichtmyerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Bitcoin advocates are taking a more measured approach over the introduction of options for the world’s largest cryptocurrency after the wild ride they took with futures.While the contracts that provide the right, but not the obligation, to buy or sell a specified amount of coins within a set time period have been available on some online exchanges, they’re heading for the mainstream, just as futures did during the height of the crypto mania in 2017.A consortium known as Bakkt, which includes the parent company of the New York Stock Exchange, began offering options earlier this month. CME Group Inc., one of the first U.S. regulated exchanges to offer Bitcoin futures, will launch their own options on Jan. 13.“It’s hard to say who exactly will show up on day one,” Tim McCourt, global head of equity index products at Chicago-based CME, said in a phone interview.In the case of futures, the debut session on the Cboe Global Markets Inc.’s exchange in December 2017 triggered trading halts as volume surged beyond dealers’ expectations. A year and a half later, the Cboe stopped listing the futures as demand evaporated in the wake of the bursting of the crypto bubble in 2018.Up until now, options trading has been mostly a niche of professional traders. Average daily volume has hovered around $22 million for the past year, with more than 95% happening on just one exchange, Deribit, according to derivatives tracker Skew. That compares with $1 billion in daily volume for Bitcoin and about $10 billion for the Bitcoin futures market.Traders may be most excited by the Dec. 27 introduction of options by OKEx, a popular exchange in Asia that is registered in Malta. Like many crypto trading platforms, the companies are adding more complex avenues to wager on price moves with Bitcoin no longer just going straight up.While Bakkt and CME serve many institutional clients, most continue to stay away from the crypto market, spooked by greater regulatory and political scrutiny, an abundance of scams and the coins’ huge volatility.“A lot of people are excited without knowing why exactly,” Sam Bankman-Fried, who heads large cryptocurrency trader Alameda Research, said in a phone interview. “Sometimes people go through a lot of work to list options, and there’s no one buying it.”Bankman-Fried, who also co-founded the FTX derivatives exchange, said options can be helpful for so-called miners and people holding vast quantities of coins such as hedge funds that won’t or can’t sell them. Options can then offer a way to cut volatility risk. Some retail investors may wish to speculate using options as well.“You get a little bit bored staring at the same graph all day,” said Bankman-Fried, who is planning to offer options on his exchange. “Options offer a legitimately new thing for them to be trading.”While many crypto holders used to lend out their coins, yields on such lending have declined, and many coin owners may make more money by using call overwriting strategies, instead, said Josh Lim, head of trading strategy at Galaxy Digital Holdings Ltd. in New York.Beyond Bitcoin, demand for options is questionable. At Deribit, which began offering Bitcoin options in 2018 and Ether options earlier this year, interest in Bitcoin option contracts has held up, but orders for Ether contracts have been waning since May, according to the company’s data.“A lot of people ask us, ‘why don’t you do Ripple options?’ and it’s a lot of work,” Luuk Strijers, an executive at Deribit, said in a phone interview from Amsterdam. “I don’t think the options space is ready for smaller coins than Ether. It’s simply too small.”Still, as more exchanges offer contracts, the crypto options market could grow 10 to 20 times in size, Strijers said. He points to Amazon.com Inc., where trading volume of options on its stock is just a tad lower than the trading volume of its shares.“This will reduce spreads and improve liquidity in the market,” said Kyle Samani, co-founder of Austin, Texas-based Multicoin Capital Management LLC.That said, the same argument was made about futures when the price of Bitcoin was more than double the current value.To contact the reporter on this story: Olga Kharif in Portland at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Dave Liedtka, Randall JensenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll apply a basic P/E...