Articles tagged by CBOE
CBOE Holdings has confirmed its plan to buy Bats Global Markets for a total of approximately $3.2 billion, with trading across all asset classes expected to migrate onto a single platform utilising Bats’ proprietary trading technology. The transaction is expected to close in the first half of 2017, subject to regulatory approvals.
While the Bats-owned Hotspot FX business is not expected to be materially impacted, the combination of CBOE’s futures platform and Hotspot’s spot FX products creates a unique opportunity, Chris Concannon, Bats' CEO, told Profit & Loss on a media call.
CBOE Holdings (CBOE) announced the completion of its acquisition of Bats Global Markets yesterday Tuesday, February 28, in a cash and stock transaction valued at approximately $3.4 billion (based on the closing price of CBOE shares on February 28). The combined company also announced its new corporate leadership structure, which includes key members of both CBOE’s and Bats’ executive teams.
As previously announced, Tilly will serve as chairman and CEO, while Chris Concannon, formerly CEO of Bats Global Markets, becomes president and COO of CBOE Holdings. Within the FX realm, Bryan Harkins was named head of US equities and global FX, a role he took on following the departure of Bill Goodbody in January.
Jim Lubin, senior managing director at CBOE Futures Exchange, left the exchange at the end of March. He is starting a new venture, Beacon Hill Private Wealth Management, to manage the investments and wealth of individuals and institutions.
Lubin spent the past six years at CBOE. Prior to that he spent more than seven years at Hyman Beck & Co, working in business development and serving as COO. Before that buy side role, Lubin spent four years at Lehman Brothers as a senior vice president. He spent the first 19 years of his career at Merrill Lynch.
Following hot on the heels of its second ownership change in a relatively short time, Hotspot is maintaining the momentum of change by launching new products, specifically outright deliverable forwards. It has also announced a raft of new hires and sought to broaden its geographical footprint. Galen Stops speaks to senior staff at the platform about what these changes - which include the addition of non-deliverable forwards to the platform - are building towards, as well as their view on the changing FX market structure.
CBOE Holdings has agreed a deal with Gemini Trust Company, which will see the exchange group receive an exclusive global license to use Gemini's bitcoin market data for bitcoin derivatives and indices.
Gemini is a digital asset exchange and custodian that allows customers to buy, sell and store digital assets such as bitcoin and ether. Gemini is a New York trust company that is subject to fiduciary obligations, capital reserve requirements and banking compliance standards of the New York State Department of Financial Services (DFS).
Profit & Loss talks to John Deters, chief strategy officer and head of multi-asset solutions at CBOE, about the potential for cryptocurrencies such as bitcoin to trade on regulated exchange platforms.
Profit & Loss: You recently announced a deal with Gemini to use its bitcoin market data to develop your own bitcoin derivatives and indices. What was the thinking behind this deal?
John Deters: We’ve been observing the evolution of the cryptocurrency space, and of bitcoin specifically, for some time. In parallel with that, we’ve been thinking about what sort of structures might work well for these products.
As P&L’s resident cryptocurrency enthusiast I'm excited by some of the developments that have occurred in this space over the past few months, because it could signal the start of these digital assets moving towards the financial mainstream.
To help explain why I think this is such an interesting time in the cryptocurrency space, I explain how I first became interested in them after joining Profit & Loss, that I refused to buy bitcoin when it was at $1,000 because "it will never go higher than this" (it's now at $4,300) and why recent regulatory developments could have significant implications for financial services firms looking at trading cryptocurrencies.
At the very start of June, Profit & Loss published an article looking at why demand for cryptocurrencies had spiked in 2017, with the price of bitcoin rising over 200% between January and the latter end of May.
Subsequent to that, demand continued to grow, with the price of bitcoin reaching $4,950 by the start of September. Meanwhile ether – the native cryptocurrency of the Ethereum network – went from $8.29 at the start of the year to $388 by September.
Paul Reidy has been appointed as COO of HotspotFX. Prior to this, he had been working for the platform as head of FX technology.
A spokesperson for HotspotFX confirms the change in position.
Based in New York, Reidy has been with HotspotFX since it was owned by Knight Capital Group (KCG), a company that he joined as a managing director in 2005. In 2015, the platform was acquired by Bats Global Markets, which in turn was acquired by CBOE earlier this year.
Prior to joining KCG, Reidy worked in fixed income electronic trading at Bloomberg for four years as a software developer for Bondbook ECN and as a sales engineer at Kabira Technologies. Reidy also spent four years working for Merrill Lynch as a vice president, working as a software developer for the firm’s repo trading system.
My virtual mailbag tells me I shouldn’t but I will digress from the current hot topics of the aftermath of the Mark Johnson trial and the impending guidance on last look today by talking about CME’s launch of Bitcoin futures. Before I do, however, I feel I ought to repeat one observation from a piece I wrote earlier this week – isn’t it strange that the majority of people against changing the language on last look in Principle 17 provided their feedback anonymously?
I will leave that for you to ponder, because I want to look at the potential impact of CME’s launch of Bitcoin futures.
Two exchange groups, CME Group and CBoE, have self-certified new contracts for Bitcoin futures products ahead of a full trading launch.
CME Group has self-certified the initial listing of its bitcoin futures contract to launch Monday, December 18, 2017, while CBoE says its own launch date will be announced "shortly".
The announcements were noted in a release by the US Commodity Futures Trading Commission (CFTC), which says its staff have held "rigorous" discussions with CME over the course of six weeks, and CBoE over the course of four months.
As the cryptocurrency, bitcoin, takes arguably the next big step towards mainstream adoption, Galen Stops takes a look at the different approaches being taken by regulated exchanges towards designing bitcoin contracts and regulators to overseeing them.
Last week, on December 1, three exchanges regulated by the Commodity Futures Trading Commission (CFTC) self-certified new cash-settled derivatives contracts based on bitcoin.
The exchanges – or designated contract markets (DCMs) – are the CME, the CBOE Futures Exchange (CFE) and the Cantor Exchange.
CBOE Global Markets (CBOE) has announced the launch of NDF trading on its Swap Execution Facility (Sef), CBOE SEF.
CBOE Sef will offer a fully anonymous central limit order book with firm all-to-all trading available to all market participants, configurable firm and non-firm streaming quotes for tailored liquidity needs and curated liquidity pools to help meet participants’ execution criteria. The Sef will also offer pre-trade Net Open Position (NOP) credit checks and real-time risk management.
CBOE claims that there will be a diverse network of participants resting passive liquidity and a wide distribution network for market makers on the platform.
CBOE officially launched trading on bitcoin futures on Monday morning in Asia and while the event was much anticipated, price action has generally conformed to that of the past year with the price of the cryptocurrency rising steadily.
Trading on the front month contract started at $15,460 with the cash exchanges trading around $15,000, but after some early whippy price action that saw the price rise to $16,630 and then fall back to the opening level, buyers re-emerged, sending the futures to $18,700 and a trading halt on CBOE.
At the moment it seems as though literally half the people that I’m speaking to just want to talk about bitcoin, while the other half just want to complain that no one wants to talk about anything except bitcoin.
But all this hype actually could cause problems for bitcoin going forward. For one thing, speaking to the exchanges and other mainstream financial services firms about why they’re launching bitcoin products, the answer is invariably some version of “well there’s tons of client demand for exposure to bitcoin”.
CBOE Global Markets (CBOE) has issued a release hailing the first day of trading on its new and highly anticipated bitcoin futures contract as a successful launch.
“XBT futures posted a strong start in the global trading hours, which began as planned at 5:00 pm CT on Sunday, December 10, 2017,” says CBOE in the release.
The first full day of trading continues today, December 11. At 5:00 pm CT on Sunday, XBT futures opened at $15,000 and 890 contracts were traded by 7:15 pm CT.
Cboe Global Markets’ Data Shop has added historical spot foreign exchange and bitcoin data from Cboe FX to its range of offerings.
The exchange group says that market participants and academics can back-test, analyse, and have the potential to increase trading opportunities, using the data, which includes TOP, which provides top-of-book data on currency pairs, including the quote time, bid price, bid quantity, offer price and offered quantity. Also available is Snapshot, which provides a look at the depth of book data at intervals throughout the trading day; and Cboe FX Tape.
Bitcoin futures are one month old which means the first maturities are happening and while I can't think anyone would look at the futures for a ‘buy and hold’ strategy, the first month has been a somewhat sobering experience for many. There has, inevitably, been a lot of chatter about how volumes aren’t what they expected, although I can’t decipher whether this is genuine disappointment or just the crypto-bashers doing their thing, but either way, the modern day Green Shield Stamps haven't followed the script.
Cboe Global Markets (Cboe) announced the settlement of January expiry Cboe bitcoin (XBT) futures.
The settlement price was $10,900.00, as determined by the 4:00 p.m. ET Gemini1 Exchange bitcoin auction.
Cboe XBT futures, launched on December 10, 2017, and a total of over 124,000 contracts have traded across expiries since, representing a notional value of over $1.5 billion. The contracts, which are cash-settled, were specifically designed to allow participants to implement straightforward trading strategies through settlement to a single, tradable auction price as calculated by Gemini.
Not so much a price prediction, more a market structure view, but Colin Lambert believes the nature of trading in Bitcoin will change in 2018.
If you ever wanted to know the financial markets' equivalent of playing Russian Roulette, look no further than attempts to predict the price of bitcoin going forward.
There were not many who saw a decline in bitcoin at the start of last year, but even though there was a consensus that it was going up (and why wouldn't it when you have a limited supply trying to meeting increased demand driven by publicity?), no one remotely nailed the year-end of $16,000. the highest estimate of the price this time last year was probably around $2,000 - and even during the third quarter of the year when it rose past $4,500 no one was thinking a further quadrupling.
As I am writing this on St Valentine’s Day I did think about exploring something my colleague discovered, the launch of Iustcoin, which can be spent in certain “specialist” service sectors, however I fear the content would not pass muster with readers’ filters and so we are stuck with the more mundane. I can however, make a very tenuous link to the aforementioned cryptocurrency by discussing manipulation – specifically, are we getting a little carried away in looking for market manipulation?
Redline Trading Solutions has announced support for outright deliverable foreign exchange (FX) forwards traded on Cboe FX Markets and non-deliverable FX forwards (NDFs) executed on Cboe SEF.
This means that firms that are FX clients of Cboe using Redline’s InRush Market Data Ticker Plant and Order Execution Gateway can now receive market data and execute FX forwards on Cboe FX and NDFs on Cboe SEF via a single server.
“We are seeing significant interest in NDFs on Cboe SEF from our customers, and we are excited to be among the first providers to integrate with Cboe’s new venue,” said Mark Skalabrin, CEO of Redline.
If there’s one thing that has become abundantly clear over the past few years, it is that many OTC platforms have decided that they need to scale their businesses up and out in order to be successful in today’s FX market.
This was made abundantly clear in a press call today when Terry Duffy and Michael Spencer, respectively the CEOs of CME Group and NEX Group, talked about the logic behind their $5.4 billion tie-up.
“Effectively, what we’re building is a bigger supermarket,” said Spencer. “Why do people shop in supermarkets? Because it’s convenient to buy everything in one place.”
Cboe has formed a Markets division to unify product, sales, business development and account coverage personnel across the company's US equities and options, ETP listings, global derivatives and FX businesses.
The new division will be supported by multi-asset resource teams and headed by Andy Lowenthal and Bryan Harkins, who have been appointed executive vice presidents and co-heads. Lowenthal has been leading Cboe's global derivatives group, while Harkins led Cboe's US equities business, comprising four distinct stock exchanges, as well as the firm's global FX business
Thus far, despite the hype and excitement around cryptocurrencies, most CTAs haven’t exactly been in a rush to start trading these assets. However, as Galen Stops reports, this might be about to change.
As Cboe and CME both prepared to launch bitcoin futures contracts in December 2017, the price of a single bitcoin roared upwards to peak at over $19,000.
For retail investors, the attraction of this particular cryptocurrency was that the price had been going up all year, having traded at around $985 per bitcoin in January of last year. For professional traders, the attraction of bitcoin was that it was an asset that was actually moving, it was uncorrelated to other assets and therefore offered diversification benefits and, on top of all this, was almost exclusively being traded by retail punters.