JLN Options

CBOE Claims Victory Over ISE In Legal Fight Over Index Options

2012-05-25T14:53:00.001-05:00

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CBOE Claims Victory Over ISE In Legal Fight Over Index Options
Jacob Bunge, Of DOW JONES NEWSWIRES (via NASDAQ)
The parent of the Chicago Board Options Exchange on Friday claimed victory over a rival stock-options market in a years-long battle over the right to offer contracts on major stock-market indexes.
The Illinois Appellate Court ruled in favor of CBOE Holdings Inc. (CBOE) and major index providers in a legal dispute with the International Securities Exchange, which has sought to list its own options linked to equity benchmarks such as the Standard & Poor's 500 and the Dow Jones Industrial Average.
http://jlne.ws/LNywt1

ISE loses appeal; index exclusivity holds
Press Release
The Chicago Board Options Exchange (CBOE) and The McGraw-Hill Companies, Inc. (McGraw-Hill) today announced that the Illinois Appellate Court has ruled in favor of CBOE, McGraw-Hill and CME Group Index Services, LLC regarding the index options litigation brought against the International Securities Exchange, LLC (ISE).
Today's ruling affirms an injunction that prohibits ISE from listing or offering a market for trading in options on either the S&P 500 Index (S&P 500) or the Dow Jones Industrial AverageSM (DJIA), as to which CBOE holds exclusive licenses. The injunction also forbids The Options Clearing Corporation (OCC), which clears trading for all U.S. options exchanges, from clearing options on these indexes unless they are traded pursuant to CBOE's exclusive licenses.
http://jlne.ws/LiXGgI

Rumor Mill: PEAK 6 Acquiring Penson Worldwide?
The Options Insider
Rumors are pouring into The Options Insider that PEAK 6, the parent company of brokerage firm Options House, may have purchased Penson Worldwide at the close of business on Thursday.
http://jlne.ws/JCmuCw

Embattled Penson Stock Plumbs Fresh Lows
Jacob Bunge, The Wall Street Journal
Shares in brokerage and clearing firm Penson Worldwide have dropped almost 30% to 21 cents, earlier falling as low as 16 cents. The firm earlier this week disclosed plans to tap $5.5 million in regulatory capital in order to pay down interest on outstanding debt.
http://jlne.ws/LNuAbH
** If the rumor is true (listed before this story) one has to wonder why Penson stock is down 17% (as of this writing)

CBOE and C2 to List Options on Facebook (FB) on Tuesday, May 29
Press Release
The Chicago Board Options Exchange (CBOE) and C2 Options Exchange (C2) today announced they will list options on Facebook (FB) beginning Tuesday, May 29.
Susquehanna Securities will serve as the Designated Primary Market Maker (DPM) for Facebook options at CBOE. C2 does not use a DPM system.
The contract specifications for Facebook options are as follows:
Initial strike price: 16 - 49 in one-dollar increments
Position limit: 250,000 contracts
Expiration cycle: March expiration cycle with initial months listed as Jun, Jul, Sep and Dec
In addition, on May 29, CBOE will list both the Facebook January 2013 options series and the Long-term Equity AnticiPation Securities (LEAPS) options with a January 2014 expiration. C2 will list the January 2013 options series on Facebook on the same date.
http://jlne.ws/LvEkkv

IntercontinentalExchange Announces Record Brent Crude Option Volume
Press Release
IntercontinentalExchange, a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, reported record daily volume in ICE Brent Crude options of 78,508 contracts on May 24, 2012. The previous daily volume record was 63,494 on May 2, 2012.
Average daily volume for ICE Brent Crude options is 45,664 to date in May, up more than 500% from May 2011. Open interest in ICE Brent Crude options is 952,239 as at May 24, 2012.
http://jlne.ws/KfRS7J

Crude Options Volatility Falls as Oil Rises
Barbara Powell, Bloomberg
Crude-oil options volatility fell as underlying futures rebounded from a seven-month low.
Implied volatility for at-the-money options expiring in July, a measure of expected price swings in futures and a gauge of options prices, was 26.2 percent at 3:55 p.m. on the New York Mercantile Exchange. Volatility rose for the first time in three days yesterday, to 27.6, when futures slipped below $90 for the first time since November.
http://jlne.ws/KnEz3x

EXCHANGES

CME Group to Expand CBOT Grain and Oilseed Open Out-Cry Trading Hours During USDA Crop Reports
Press Release
CME Group, the world's leading and most diverse derivatives marketplace, today announced it will offer expanded floor trading hours in its CBOT grain and oilseed futures and options during major United States Department of Agriculture (USDA) Crop Reports, pending CFTC certification. The floor trading open will be changed to 7:20 a.m. CST, from 9:30 a.m. CST, on mornings of specified reports beginning June 12, 2012.
http://jlne.ws/KpyjZc

KCBT to Alter HRW Wheat Futures & Options Open Outcry Trading Hours on USDA Report Days
Press Release
The Kansas City Board of Trade has filed a submission with the CFTC to alter the start time of open outcry trading for the KCBT’s flagship hard red winter wheat futures and options contracts on USDA report release dates effective June 12, corresponding with the next release date.
Open outcry sessions will open at 7:20 a.m. CT on USDA report release dates. The USDA reports are released at 7:30 a.m. CT. On all other dates, the open outcry market (Monday-Friday) will open at 9:30 a.m. CT. The open outcry market will continue to close at 1:15 p.m. CT. Daily settlements are based on the 1:15 p.m. close.
http://jlne.ws/K5XgKN

REGULATION

OCC Received Proposed Systemic Designation From U.S. Regulators
By Silla Brush, Bloomberg
OCC, an organization that clears and settles all trades on U.S. options exchanges, has been designated by U.S. regulators as systemically important to the financial system, according to spokesman Jim Binder.
http://jlne.ws/Jz8C79

TECHNOLOGY

What is Coming for High-Speed Trading at the Speed Traders Workshop 2012 Beijing
Press Release
Edgar Perez's The Speed Traders: An Insider's Look at the New High-Frequency Trading Phenomenon That is Transforming the Investing World, Presenting The Speed Traders Workshop 2012 Beijing, China, "How Algorithmic and High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Options, Futures and FX", May 30.
http://jlne.ws/JCpe2A

STRATEGY

What To Look For In Facebook Options
Seeking Alpha
I knew that Facebook was in trouble last week when my mother asked me how she could get some shares. FB touched $45 on its market debut Friday but is now well below its $38 IPO price.
It is early, to be sure, and this disappointing start may have little bearing on the stock's levels in coming years. But in the meantime, Facebook's options should provide some interesting opportunities when they roll out next week.
http://jlne.ws/JCqlQ2

Citadel lost $30 mln in Facebook fiasco

2012-05-24T15:28:00.001-05:00

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Citadel lost $30 mln in Facebook fiasco
Reuters
Citadel Securities' market-making business lost around $30 million due to Facebook Inc's botched initial public offering on Nasdaq OMX Group Inc's U.S. stock exchange, a source with knowledge of the situation said on Thursday.
The losses at Citadel Securities, which has assets under management of around $1 billion, are in line with losses at Knight Capital Group, which said on Wednesday in a regulatory filing it suffered a pre-tax loss of $30 million to $35 million.
http://jlne.ws/Klklr

Citadel Trading Executive Leaving; Facebook Loss Seen Up To $35M
Jacob Bunge, The Wall Street Journal
A senior executive in the stock- and options-trading division of hedge fund firm Citadel LLC plans to retire in the coming weeks.
Andrew Kolinsky currently serves as president of Citadel Execution Services, the broker-dealer unit responsible for funneling orders from retail brokerage firms to exchanges and private trading platforms. Citadel accounts for about 7% of daily volume in U.S. listed stock options and 4% of domestic equities, according to the firm's own estimates.
http://jlne.ws/KOuHlZ

CBOE To Give More Options On S&P 500 Index
Fox Business
Options traders will soon have more time to position their bets on the S&P 500 index, as the Chicago Board Options Exchange plans to begin listing weekly options farther in advance.
CBOE, the largest options exchange by volume, announced Tuesday plans to list weekly options on the Standard and Poor's 500-stock index, or SPX, as much as five weeks in advance, as opposed to listing just one week ahead, as the exchange currently does, for a total of as many as four weekly options trading at one time.
http://jlne.ws/KSyta1

Emerging Stocks Fall Most in Six Months on European Debt Concern
Christine Harvey and Gan Yen Kuan, Bloomberg
Emerging-market stocks slid the most in six months as concern deepened that Europe’s debt crisis will reduce developing-nation exports and curb demand for riskier assets...
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a measure of options prices on the fund and expectations of price swings, rose 0.6 percent to 33.75.
http://jlne.ws/MKUYCg

EXCHANGES

CME Group Inc. Announces Preliminary Results from its 2012 Annual Meeting of Shareholders
Press Release
CME Group Inc. CME +0.87% today announced the preliminary shareholder voting results from its 2012 annual meeting.
At the meeting, shareholders:
elected Dennis H. Chookaszian, Larry G. Gerdes, Daniel R. Glickman, James E. Oliff, Edemir Pinto, Alex J. Pollock and William R. Shepard each for a two-year term expiring in 2014;
ratified the appointment of Ernst & Young as the company's independent registered public accounting firm for 2012;
approved on an advisory basis the compensation of the company's named executive officers;
approved the Fourth Amended and Restated Certificate of Incorporation of CME Group Inc. to eliminate the classification of the company's board as of the 2014 annual meeting;
approved the CME Group Inc. Amended and Restated Omnibus Stock Plan; and
approved the CME Group Inc. Amended and Restated Employee Stock Purchase Plan.
Shareholders did not approve the shareholder proposal to amend the company's By-Laws to allow shareholders to nominate director candidates for inclusion in the company's proxy materials.
http://jlne.ws/KSz7nZ

TECHNOLOGY

NYSE Euronext : NYSE Technologies and the Warsaw Stock Exchange announce market data partnership
Press Release
NYSE Technologies and the Warsaw Stock Exchange announce market data partnership
--Building further on the long term technology partnership shared between NYSE Technologies and WSE --
--Further cooperation to extend index licenses to NYSE Euronext's customer base--
--Further development of the Warsaw Stock Exchange's new market data policies--
Amsterdam, Brussels, Lisbon, London, Paris, Warsaw: 24 May 2012 -NYSE Technologies, the commercial technology division of NYSE Euronext, today announced its market data partnership with the Warsaw Stock Exchange (WSE). Customers will now have access to the WSE's market data services via NYSE Technologies' innovative suite of market data products and services.
http://jlne.ws/KXwHEL

STRATEGY

Buy U.S. Financial ETF Puts to Protect Against European Fallout
Financial options trading suggests a long, difficult summer for stocks.
STEVEN M. SEARS, Barron's
Ground zero of the crisis gripping the financial world is Europe, but the fallout is being felt in the U.S. financial sector. So, to benefit or gain protection from Europe's festering economic crisis, buy put options on the Select Sector Financial SPDR exchange-traded fund (ticker: XLF).
The ETF, made up of major U.S. banks and other financial firms, is highly correlated to the Euro Stoxx 50 index of large-cap European shares. When the Euro Stoxx index moves, the Select Sector Financial SPDR moves with it, correlating with 73% of Europe's move.
http://jlne.ws/Lt9bhQ

Buying VIX Calls As A Portfolio Hedge
Jim Fink, Seeking Alpha
Because VIX calls are based on VIX futures instead of the more volatile "spot" VIX, in the past I suggested that it would be easier to hedge a portfolio against a "black swan" stock market decline using S&P 500 puts-either the cash-settled SPX index puts or the equity-settled SPY ETF puts.
Well, I stand corrected. In preparing for a conference down in beautiful Palm Beach, Florida, I read two academic studies-one published in 2009 and another published in 2012-that found VIX calls to be a much more effective portfolio hedge than S&P 500 puts.
http://jlne.ws/Kjcpqd

VIX and SPX Locked In a Cage Match. Who Will Win?
Mark Sebastian, Options Insider
The tough love at the big Euro Summit did not really produce the news that stocks were looking for this morning. In reality, the grand poobahs there have to talk tough and Germany has to push back, since they are only country that can sell debt with 0% interest (that is a stunner!). Euro issue bonds, like who is going to buy those? A few billion in stimulus might come out of the summit, but really, if countries cannot abide by their commitments, it will not matter anyway, as confidence is going to evaporate. That leaves us with the cage match between the SPX (can it hold) and the VIX (can it explode).
http://jlne.ws/JqsgWh

Livevol Receives Private Funding from Institutional Investor

2012-05-23T15:20:00.000-05:00

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Livevol Receives Private Funding from Institutional Investor
Press Release
Livevol Inc., a leading provider of real-time and historical data solutions to professional and retail equity and index option traders, today announced that it has raised private funding from an institutional investor to fund the acceleration of Livevol's development.
The Company plans to use the proceeds to expand its data, analytics and brokerage services. Merriman Capital, Inc., a wholly owned subsidiary of Merriman Holdings, Inc. (otcqx:MERR), acted as the sole advisor in the transaction.
Ronald L. Chez was the lead institutional investor in the private transaction. He will join Livevol's board of directors as part of his involvement. Chez is an active investor in public and private rapidly growing small cap companies. He serves on several boards of public and private companies.
http://jlne.ws/Jd5ixe
**Interesting news from Livevol.

VXN Futures Debuting Today
Jill Malandrino, The Street
Today the CBOE Futures Exchange, LLC (CFE) will launch trading on CBOE NASDAQ-100 Volatility Index(SM) (VXN(SM)) futures contracts. VXN is a key measure of market expectations of near-term volatility conveyed by NASDAQ-100 Index (NDX) option pricing. The structure of the futures contracts is the same as those on the widely followed CBOE Volatility Index® (VIX). Initially there will be only four consecutive monthly contracts listed which differs from VIX futures which have contracts with expirations trading for the next nine months.
http://jlne.ws/MoIg9H

Rupee hits record low as Fitch cuts Japan rating
Bloomberg (via Gulfnews.com)
Rupee hits record low as Fitch cuts Japan rating "The Reserve Bank of India said on Monday that outstanding currency futures and options contracts held by a bank shouldn't exceed $100 million or 15 per cent of the total such agreements, whichever is lower, on local exchanges. Lenders can't offset derivative trades against those in the over-the-counter market, the monetary authority said in a statement. "
http://jlne.ws/LEqy5A
**Government intervention in the Indian markets is not a good thing.

Rupee Declines to a Record Low on Concern Greece Will Leave Euro
Jeanette Rodrigues, Bloomberg
India’s rupee dropped to a record low as investors favored the perceived safety of the dollar over emerging-market assets on concern Greece will leave Europe’s currency union...
The rupee declined 0.5 percent to 55.6475 per dollar as of 9:28 a.m. in Mumbai, according to data compiled by Bloomberg. It fell to an all-time low of 55.8275 earlier. The rupee’s one- month implied volatility, a measure of exchange-rate swings used to price options, rose 80 basis points, or 0.8 percentage point, to this year’s high of 14.3 percent.
http://jlne.ws/MoHhGK

Gold Investors Seek Silver Lining
MATT DAY, TATYANA SHUMSKY and KAITLYN KIERNAN, The Wall Street Journal
Some investors are fighting the tide of lower gold prices.
One reason gold options are attractive is they offer a cheap way for individual investors to wager on the precious metal. But the size of the recent surge in positions suggests large market participants, such as hedge funds, are wading in, said Chris Jacobson, chief derivatives strategist at Susquehanna Financial.
http://jlne.ws/MoCCoe

OptionsCity Software launches Algo Store, the ‘iTunes’ of trading world
Press Release
OptionsCity Software, a leading provider of electronic trading solutions,announced today that it has launched Algo Store, an online algorithm repository and collaborative environment that provides a market for traders and developers to create, purchase, and download trading algorithms, available at algostore.optionscity.com.
Through Algo Store, third-party developers are able to write and sell their self-authored algorithms, or components of algorithms, to traders around the world. The communal aspect is bolstered by the inclusion of developer profiles, a ratings system, an interactive social forum, and the prospect to become an OptionsCity Certified Developer, a title granted to top-rated quantitative analysts and developers.
http://jlne.ws/JxPqLZ

REGULATION

CFTC: Former Chicago Trader Banned, To Pay $600,000
Ben Fox Rubin, Dow Jones Newswires
A former Chicago trader was ordered to pay a $600,000 civil penalty and permanently banned from the commodities industry in connection to an elaborate scheme to trade options without posting the required margin, the U.S. Commodity Futures Trading Commission said.
Specifically, the order found that Whitney perpetrated a margin avoidance scheme with out-of-the-money options, which are options with no intrinsic value, by knowingly making false and misleading statements to a representative of the CME, representatives of futures commission merchants, and others.
http://jlne.ws/LpAjBx

STRATEGY

Facebook: Shorting Through Options
John J. Critchley, Jr., Seeking Alpha
The Facebook (FB) IPO came in like a lion and is going forward like a lamb. Do you want to short the most over-hyped IPO of all time, but can't borrow the stock? What's the investing public to do? Use options.
On May 29th, the options exchanges will offer FB options. In the past, it might be months before a hot IPO has options listed on them. Nowadays, in the 24/7 interconnected investing world of today, there is no patience; no waiting for the "right time." When these options become eligible for listing in a little over a week, they will trade.
http://jlne.ws/JV90Qg

Leveraged Volatility Trades Plunge 23% Monday

2012-05-22T14:14:00.003-05:00

LEAD STORIES

Leveraged Volatility Trades Plunge 23% Monday
By Brendan Conway, Barron's
The leveraged trade that looked so promising last week got crushed today as pledges to help Greece stay in the euro-zone and chatter of stimulus in China fueled investors’ risk appetites.
The ProShares Ultra VIX Short-Term Futures ETF (UVXY) plunged 23%.
http://jlne.ws/JlAor4

In Volatility Trading, Accept No Substitute
The Wall Street Journal
When it comes to fear gauges, traders will accept no substitutes.
After the Chicago Board Options Exchange Volatility Index, commonly called the market's fear gauge, surged in 2008 amid the height of the financial panic, exchanges all over the world began launching their own volatility indexes. But despite several rather volatile years, the imitators are flopping.
Volatility index futures on several European markets have seen sparse volume, while levels of volatility indexes tied to Australian and Indian stock exchanges are being largely ignored by the local trading communities.
http://jlne.ws/L2XVMJ

Options: Nasdaq is another big Facebook loser
by Steve Sears, MarketWatch
The Nasdaq Stock Market's failure to launch Facebook's initial public offering smoothly is the worst electronic trading failure since the May 2010 flash crash and is raising the ire of investors who feel sandbagged by the social-network's hyped IPO.
By failing to open trading promptly, Nasdaq has damaged its self-styled reputation as the world's most technologically sophisticated exchange, while potentially creating a significant financial liability for parent company Nasdaq OMX.
Investors have reacted by increasing bearish options bets against Nasdaq, essentially betting Friday's 4% stock decline will push the $22 stock below its 52-week low of $20.32.
http://jlne.ws/LoPXtI

Nasdaq OMX Chairman Backs CEO After Facebook IPO Fiasco
By Jacob Bunge Of DOW JONES NEWSWIRES (via The Wall Street Journal)
The chairman of Nasdaq OMX Group Inc. (NDAQ) expressed support for the exchange group's chief executive Tuesday, days after Nasdaq OMX's mishandling of the Facebook Inc. (FB) share offering Friday sparked confusion and anger across Wall Street.
Nasdaq OMX's board met a day after the Facebook debacle to discuss the fallout. Chief Executive Bob Greifeld told reporters Sunday that he hoped his position was secure following the high-profile episode.
http://jlne.ws/KJgHKa

VIX Crashes And Burns (VXX, TVIX, VXZ, XVZ, XIV)
by Dan Nyaradi, Wall Street Selector
VIX ETFs were crushed today as the VIX index lost 12.35% and the NYSEARCA:VXX ETF lost 11% today. Today’s VIX crash was likely due to the extreme volatility that the VIX usually endures in addition to a large correction from overbought conditions after last week’s VIX rally. With markets correcting into the positive direction today, it is no surprise that “fear” was minimized as investors recovered portions of lost assets.
http://jlne.ws/JmflRQ

Options Insider Special Report: Analyzing Options Coverage in the Financial Media (AUDIO)
Options Insider
Live from the 2012 OIC Conference, Mark is joined for this special roundtable focused on the coverage of options in media by:
- Nina Mehta, Bloomberg
- Nikolaj Gammeltoft, Bloomberg
- Terry Flanagan, Markets Media
http://jlne.ws/JOvxzX

EXCHANGES

BATS talks to rivals over European futures launch
By Luke Jeffs, Reuters
BATS Europe is in talks with exchange rivals over a clearing deal that will allow the share trading platform to break into European futures and challenge incumbents NYSE Euronext and Deutsche Boerse.
BATS Europe, which handles about a quarter of European share trading, has approached the main exchanges about recruiting their clearing houses to back its push into futures, something it plans to do this year...
BATS is eyeing a move into futures and options trading to expand its interests beyond its core market of share trading and on Tuesday appointed Guy Simpkin to spearhead this move.
http://jlne.ws/JmCoMx

VXN Futures Launch Tomorrow, as Vol of VXN Hits Y-T-D High
By Matt Moran, CBOE
CBOE Futures Exchange, LLC (CFE) announced that it plans to launch trading on the CBOE NASDAQ-100 Volatility Index futures contract (index ticker symbol VXN, futures symbol VN) beginning on Wednesday, May 23, pending regulatory approval. The VXN Index measures the implied volatility of the NASDAQ-100 Index, and is calculated through the application of CBOE's VIX® methodology to the prices of options on NDX.
http://jlne.ws/JzTOU1

NYSE Amex Options to start Facebook options on May 29
Reuters
The NYSE Amex Options said on Tuesday it will start trading Facebook options on May 29.
The International Securities Exchange has already announced that it will plans to offer options on Facebook on May 29 while other U.S. options exchanges are expected to follow suit as long as trading volumes and other thresholds are met.
http://jlne.ws/KJeXkl

STRATEGY

I’ll Have Another Covered Call
By Christopher Ebert, Market Playground
Given the importance of emotions in trading, it may come as surprise that widespread measurement of these seemingly intangible aspects of the stock market is a relatively new phenomenon. Fear indices such as the VIX, VXD and VXN, while commonplace today, were almost unheard of 20 years ago.
The VIX is a powerful technical indicator. Derived from the pure emotions of option traders, it differs from other types of analysis, in that it represents how the market perceives the future. When the consensus of trader’s emotions is justified, individual traders can benefit from a study of the VIX. However, there are many instances in which the market either becomes complacent – resulting in the volatility index giving a false sense of security, or becomes overly fearful – yielding an unjustified sense of impending doom.
http://jlne.ws/Jb7TYA

The Good, the Bad and the Ugly of Options Trading
by Rick-Pendergraft from Cabot Heritage Corporation, NASDAQ
Friday was not a good day for me. I'm the editor of Cabot Options Trader , and for the first time in nearly two years, my subscribers may be looking at their first total loss on a recommendation.
If you trade options as long as I have, you know that you are going to get the occasional extreme situation: a stock will gap up sharply when you are holding puts, or a stock will gap down while you are holding calls, but it still stings.
http://jlne.ws/KQUSVq

brokersXpress not an option for Schwab

2012-05-21T14:14:00.002-05:00

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brokersXpress not an option for Schwab
By Bruce Kelly, Investment News
Some 325 brokers and registered investment advisers are hustling to find new homes in the wake of The Charles Schwab Corp.'s announcement last week that it is closing down brokersXpress LLC, an independent broker-dealer for representatives and financial advisers who trade options.
“This was not a cost-cutting effort,” said Schwab spokeswoman Susan Forman. “It was more of a philosophical decision.”
The company will focus on fee-based registered investment advisers who use its custodian group, Schwab Advisor Services, rather than on brokers who charge a commission for trades, Ms. Forman said.
http://jlne.ws/KG9ef6

Hedge Funds Rebuild Euro Bear Bets on Greece
By Liz Capo McCormick and Lukanyo Mnyanda, BusinessWeek
The euro has weathered the worst financial crisis since the Great Depression, bailouts of Greece, Ireland and Portugal, and falling interest rates. Now, investors are betting like never before that a Greek exit would be too much to keep the 17-nation currency above its long-term average.
Hedge funds and other large speculators, which pared trades that would profit from a drop in the euro to the lowest levels since November, rebuilt them to a record high last week, figures released May 18 by the Washington-based Commodity Futures Trading Commission showed. The premium for options that grant the right to sell the euro has more than doubled since March.
http://jlne.ws/KDPBQL

CBOE to start listing Facebook option contracts this month
By Chad Terhune, Los Angeles Times
Facebook shares fell flat on their Nasdaq debut, but another trading venue for the stock will open later this month.
The Chicago Board Options Exchange will start listing option contracts on the Menlo Park company May 29, according to specialist firm Susquehanna Investment Group. This is sooner than normal for a company going public. The exchange typically waits a month or more before offering these options, but investor interest in the social media giant accelerated that timetable.
http://jlne.ws/K4L5fe

Nasdaq: Another Big Facebook Loser
By STEVEN M. SEARS, Barron’s
The Nasdaq Stock Market's failure to launch Facebook's initial public offering smoothly is the worst electronic trading failure since the May 2010 flash crash and is raising the ire of investors who feel sandbagged by the social-network's hyped IPO...
Investors have reacted by increasing bearish options bets against Nasdaq, essentially betting Friday's 4% stock decline will push the $22 stock below its 52-week low of $20.32.
http://jlne.ws/K4O5Z2

Should You Trade Facebook Options? Not On Day One
by Richard Bloch, Seeking Alpha
...Well maybe it was next to impossible for investors to get in at the initial offering price, but Facebook was only 23 cents higher than the IPO price of $38 by day's end.
So investors may not need to "wade into stock options" at all. But if you're thinking of dipping your toe in the water, it's worth taking a look at how some other IPO options began their trading lives.
http://jlne.ws/Jx9sQ2

EXCHANGES

Semi-Annual Changes to the NASDAQ OMX CRD Global Sustainability Index
Press Release
The NASDAQ OMX Group, Inc. NDAQ +2.91% and CRD Analytics announced today the results of the semi-annual re-ranking of the NASDAQ OMX CRD Global Sustainability Index , which will become effective prior to market open on Monday, May 21, 2012.
The following two securities will be added to the Index: Bank of America Corporation BAC -2.42% and TELUS Corporation TU +0.27% .
The NASDAQ OMX CRD Global Sustainability Index is an equally weighted equity index that serves as a benchmark for stocks of companies that are taking a leadership role in sustainability performance reporting
and are traded on a major US stock exchange.
http://jlne.ws/K4OFpN

OPTIONS ON FUTURES

Crude Options Volatility Falls as Futures Rebound From 2012 Low
By Dan Murtaugh, Bloomberg
Crude-oil options volatility fell as the underlying futures rebounded after hitting a six-month low last week as the Seaway pipeline began carrying cheap oil to the Gulf of Mexico.
Implied volatility for at-the-money options expiring in July, a measure of expected price swings in futures and a gauge of options prices, was 27.6 percent at 12:50 p.m. on the New York Mercantile Exchange, down from 29.6 percent May 18.
Crude oil for June delivery rose 79 cents, or 0.9 percent, to $92.27 a barrel on the Nymex at 12:55 p.m.

http://jlne.ws/JzFiBb

REGULATION

SIFMA Looks at Segregation of Market Maker Desks
by Peter Chapman, Traders Magazine
Should a firm’s options market makers be allowed to work together with its stock market makers?
Options exchange rules explicitly bar the sharing of information between a brokerage firm’s options and stock market-making units, but some executives question whether the rules are outdated.
Recently, the options committee of the Securities Industry and Financial Markets Association took up the issue. “In some cases, the information barriers that separate equities and options market makers are appropriate,” Jim Boyle, head of the SIFMA options committee and a UBS executive, told the crowd at this year’s Options Industry Conference. “But in other cases, these two businesses are actually complementary and operate as one. We’re going to take a look at that.”
http://jlne.ws/KD11Ea

Senator Suggests CFTC Chief Should Be Fired
By Damian Paletta, The Wall Street Journal
Sen. Jon Tester, the Montana Democrat, has raised the prospect that Commodity Futures Trading Commission Chairman Gary Gensler should be fired over his handling of the recent scandal and October bankruptcy at MF Global Holdings Ltd.
CFTC played a large role in regulating MF Global, which had a broker dealer division. Investigators are now probing whether the company improperly transferred customer funds to a separate division to cover losses tied to bad bets on European debt.
http://jlne.ws/KfPkpt