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Understanding Blockchain Forks Most published analysis of the legal consequences of blockchain forks has been underwhelming. Discussions often centre around the legal risks to miners and developers, questions of little relevance because of the general absence of contracts between users of public blockchains and the constellation of jurisdictions from which they operate. In other words, it will freeze in hell before anonymous developers based god-knows-where win a lawsuit against unidentified Chinese miners aggregated in a mining pool. I should add that several articles appeared to be advertorials by law firms looking for new business.
FX Sees Flash Crash in Asia - But What Caused It? FX markets in early Asia experienced what dealers refer to as a “mini flash crash” today as risk aversion levels were ramped up and volatility ensued following a profit warning from Apple. USDJPY fell 400 points at one stage before reversing more than half of the drop, while AUDUSD also collapsed sharply to hit a new multi-year low. There were also sharp moves in other pairs, with Cable dropping more than 200 points and even EURUSD saw what is for the normally stable cross, a decent move.
Virtu Pays $1 Billion for ITG Virtu Financial has continued to expand its business by entering into a definitive agreement to acquire Investment Technology Group (ITG) in a cash transaction valued at $30.30 per ITG share, for a total of $1 billion. The deal has been rumoured for several months, as reported by Profit & Loss in October. Describing what it terms as a “significant acquisition” Virtu says the deal underscores its commitment to its institutional client franchise and is a natural next step in its growth.
StanChart Survey Finds Democrat House Win Priced In A survey conducted by Standard Chartered Bank, both internally and among its client base, finds that a “small” Democratic House win is “well priced in” to markets ahead of the poll next month. “A Democratic win was associated with weaker equities, lower bond yields and weaker DXY, with a stronger Democratic win exacerbating the moves,” the bank says in a release detailing the results. “A Republican win was associated with stronger equities, higher bond yields and a somewhat stronger DXY.”
Research Paper Finds Fix Tracking Error Increased Post-Reform A new research paper that looks at trading around the WM Reuters benchmark fix between 2012 and 2017 argues that while the mechanism has been made more robust and less open to manipulation, the shift to a five minute window has made actually achieving the benchmark harder for some market participants. The paper uses what the authors term “a unique dataset that allows us to identify the actions of individual traders” that provide new insights into how trading decisions affect the properties of the fix benchmark, and how the presence of the fix affects trading patterns.
Why the Rising Tide of FX Options Volumes Means Ballooning Brokerage Fees A storm is brewing in the world of FX derivatives. Driven by, surprise surprise, Brexit uncertainty and Trump - there’s a sizable chunk of activity in GBP/USD options relative to the other major currency pairs. Now the geopolitical landscape is of course backed into the price of the underlying currency pair, as opposed to the activity of the options. But the challenge is that as volumes increase, investment banks have to inevitably pay more in interdealer broker (IDB) fees. And the bigger the volume, the bigger the brokerage cost. Already under intense scrutiny to reduce costs wherever possible, this is a major headache that any desk head could do without right now.
The New Learning Curve: Using the Data The paradox of data is, as observed by panellists at Forex Network Chicago, while the data itself is becoming cheaper and more easily accessible than ever before, the resources being allocated to analysing it are increasing, bringing with it increased costs. “The core fundamental cost of collecting data and storing and processing it is cheaper than ever,” observed John Ashworth, CEO of Caplin. “The premium is going to be on the labour force that will be doing the work on the data.”
Is the Golden Age of Crypto Already Over? On September 18, at approximately 1:00pm Eastern, the golden age of cryptocurrencies came to an abrupt end. At that time, the Office of the New York Attorney General dropped a report on the operations of many major cryptocurrency exchanges that found serious faults with both specific firms and the industry as a whole. Most ominously, the report stated that it had referred three platforms that had declined to provide information voluntarily to the NY AG to the “Department of Financial Services for potential violation of New York’s virtual currency regulations”
And Finally...

in News, Market Talk

And Finally...

You are not, dear reader, going to believe this – I can hardly believe it myself – but today’s column represents the 500th And Finally…! I find myself at something of a loss having unearthed this fact – obviously such an auspicious occasion should be used to deliver one of the great columns produced anywhere by anyone, full of insight and philosophy, but that would break the habit of a lifetime. Therefore, I regret to inform you, I have decided to shamelessly self-indulge.
XTX’s 2017 Profits Remained Flat Amid Low Volatility XTX Markets’ annual report and financial statements for the year ended 31 December, 2017, show that its year-on-year profit remained largely flat at £60.98 million. In 2016 it reported a profit of £60.46 million. In the financial documents, Alex Gerko, founder and CEO of XTX Markets, said that the profits generated last year met expectations, given the lack of volatility in the markets. He added that, rather than just profit, the key performance indicators for the company are the net trading revenues and the profit before tax. “Revenues have grown 17%, driven by the company’s expansion into new markets and products and optimisation of existing strategies. The company’s trading strategies seek to take advantage of pricing movements in global securities that would be accentuated in periods of higher volatility in the underlying markets and securities in which the company opts to trade.