Archives: June , 2013
People Profiles

Profiling Broker Excellence: A Rare Commodity

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nytLogoExcerpts courtesy of June 26 NYT column by Nathaniel Popper

MarketsMuse Editor’s Note:  Though we generally spotlight the most relevant leading news media articles profiling the trading of ETFs and Options, on a selective basis, our editorial team also makes mention of compelling profiles of investment managers, traders and institutional brokers. A good example is our recent sharing of this video clip.

Today’s  NYT front page includes an equally compelling profile of Royal Bank of Canada’s trading desk. The ‘take-away’s taken from that article “Putting the Brakes on Trading” include the following:

“..Critics of modern markets say that recent innovations in trading have ended up creating conflicts of interests between banks with extensive trading operations and the customers who send them trades to execute. In some cases, the banks have an incentive to trade in exchanges that reward them with rebates, or in their own dark pool, rather than where they can get the best price for their customers…” Royal Bank of Canada says that its trading programs ignore the fees and rebates.

“Our philosophy is, and we sit around here all the time saying it: Doing the right thing is not always the most profitable thing,” said Robert Grubert, the head of trading at R.B.C. “As business people that’s not great, but it’s an investment in our client and the long term.” Continue reading →

ETF News, People Profiles, Tech Talk

Just Released: Elkins McSherry Top Executing Broker Report

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Courtesy of Pensions & Investments and independent research firm Elkins/McSherry, here is their latest report listing the industry’s top executing brokers…Most of the names are ‘industry standards’; new entries to the list are worth noting.

Click on the P&I logo to review pensioninvestment logo

 

 

 

 

 

 

ETF News, People Profiles

ETF Market Expert Speaks Out: Navigating Turbulence

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In the wake of the now spirited debate as to the direction of equities markets, the more relevant topic of how/where to move in volatile markets in order to get real best execution when trading in exchange-traded products is particularly poignant.

We extend our thanks to the folks at NorthStar Financial’s “Advisor Studios” and ETF market expert Andrew McOrmond, Managing Director at WallachBeth Capital, for shedding light on this very topic! Seeing and Hearing is Believing..

[vimeo 68798405 w=250 h=181]

ETF News, People Profiles

Surge in ETF Trading Foretells Volatile Summer

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usatodaylogo  Courtesy of John Spence

A surge in exchange traded fund trading this week signals that investors should buckle up for a volatile summer.

ETF trading soared to about 40% of overall volume on Thursday, one day after Federal Reserve Chairman Ben Bernanke said the Fed may soon begin tapering its purchases of $85 billion a month of Treasury bonds and mortgages. The Dow Jones industrial average plunged 354 points.

“My ETF-monitoring screens were lit up like a Christmas tree,” said Chris Hempstead, director of ETF execution at WallachBeth Capital, in a daily update Thursday. “Almost every ETF on my radar was trading at multiples of a normal day’s volume.”

He said it’s not uncommon to see a few ETFs have trading volume that high on a given day. But Thursday’s action “was something I have never seen before,” he said.

Volume in an unprecedented number of ETFs topped $1 billion for the session, he added.

The largest ETF, SPDR S&P 500, traded about 300 million shares, its highest one-day volume in more than a year.

Trading also surged in volatility-linked ETFs, such as iPath S&P 500 VIX Short-Term Futures ETN, which some traders use as short-term hedges, or to speculate on stock sell-offs. Continue reading →

ETF News

Equities Markets Get Slaughtered: An ETF Portfolio For Tony Soprano

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marketwatchCourtesy of Benzinga.com

 

Rest in peace James Gandolfini.

 

The actor most known for his role as Tony Soprano in HBO hit series The Sopranos died Wednesday while vacationing in Italy at the age of 51. While the Emmy Award-winning Gandolfini is likely to be most remembered for his role as the tortured New Jersey mafia boss, his acting accomplishments extend beyond The Sopranos.

 

A character actor for much of his career before The Sopranos made his a household name, Gandolfini, among other accomplishments, was nominated for a Tony Award in 2009.

 

Still, Tony Soprano was one of those larger-than-life roles than few actors ever attain, let alone execute in fashion on par with Gandolfini. If Tony Soprano were your broker, he might have you invested in some of the following ETFs.

 

iShares MSCI Italy Index Fund EWI -2.52% Before we’re accused of some kind of ethnic stereotyping, let’s acknowledge the reality that Tony Soprano was of Italian descent. So is the writer of this piece, 50 percent Italian in fact. All that aside, since Italy is one of the “I’s” in the infamous PIIGS acronym, EWI is usually worth keeping an eye on. Owning it from the long side is usually a different story.

 

It has gone somewhat unnoticed that yields on Italian 10-year bonds have crept up to 4.26 percent from four percent six weeks ago. However, that is not Italy’s biggest problem. Italy had an unemployment rate of 12 percent in April, not nearly as bad as Spain, but youth unemployment is pushing 37 percent.

 

That is a dangerously high number and one that could portend civil unrest down the road. At the very least, it dampens EWI’s allure for long-term investors. Continue reading →

ETF News, Strike Price

Bearish ETF Bets Most Expensive in Two Months: China Overnight

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bloomberg logo bw  By Belinda Cao – Jun 16

Options traders are paying the most in two months to protect against drops in the largest Chinese exchange-traded fund in the U.S. on concern a local money-market cash crunch will deepen a slump in Asia’s biggest economy.

The cost of three-month puts on the iShares FTSE China 25 Index Fund (FXI) soared to the highest since September last week, option data compiled by Bloomberg showed. The 4.3-point premium of puts over calls was the widest since April 17. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. slumped the most in four months last week, led by a 16 percent drop in Yanzhou Coal Mining Co.

The Hang Seng China Enterprises Index declined the most in a month last week after Morgan Stanley joined banks from UBS AG to Barclays Plc in lowering predictions for China’s economic growth. The Finance Ministry failed to sell all of the debt offered at an auction for the first time in 23 months and the one-year interest-rate swap climbed to the highest level since 2011 as banks hoarded funds, causing a cash squeeze in the interbank market.

“People are pretty nervous about what we’ll find out once liquidity is withdrawn,” Derrick Irwin, a portfolio manager of the Wells Fargo Advantage Emerging Markets Equity Fund, who helps manage $10.9 billion of assets in Boston, said June 14. “We haven’t seen action from China’s central bank and there’s curiosity from investors on what happens to the liquidity from the Federal Reserve as well. Markets that have really thrived on large amounts of global liquidity have struggled.”

ETF Plummets

The iShares China ETF plunged 4.7 percent last week in New York to $33.98, the steepest slump in a year. The Standard and Poor’s 500 Index lost 1 percent for the week to 1,626.73 as investors scrutinized economic data to determine whether growth in strong enough to prompt the Fed to scale back stimulus measures before its two-day policy meeting this week.   FOR THE COMPLETE BLOOMBERG LP STORY, PLEASE CLICK HERE