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☆ Bearish traders swarm AMC options as stock conversion plan faces doubts
▼ + stars: | 2023-07-28 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +3 min

NEW YORK, July 28 (Reuters) - Shares of AMC Entertainment Holdings Inc (AMC.N) have been hit by a wave of bearish options bets amid uncertainty over the company's stock conversion plan. While the common shares finished Thursday at $4.52, the APE preferred shares ended the session at $1.86. The move sent AMC’s shares higher, disappointing bearish traders who expected news of a conversion to tank the price. Still, options traders appear to be powering on with their bearish wagers, in effect betting the conversion will eventually go through. On Thursday, AMC shares finished down 10%, while APE shares rose 6%.

Persons: Steve Sosnick, Brent Kochuba, Garrett DeSimone, Saqib Iqbal Ahmed, Ira Iosebashvili, Diane Craft Organizations: YORK, AMC Entertainment Holdings Inc, AMC, Trade, Reuters, New York Stock Exchange, Interactive Brokers, Thomson Locations: Ortex, OptionMetrics

NEW YORK, May 2 (Reuters) - The cost of insuring against further losses in regional U.S. bank stocks stood near a one-month high in options markets on Wednesday, even as shares of lenders saw a reprieve from their recent sell-off. Skew on the SPDR S&P Regional Banking ETF - a gauge of relative demand for puts versus calls - remained elevated, hovering near the highest level since the COVID-19 market slump, data from OptionMetrics showed. The SPDR S&P Regional Banking ETF rose about 1.9% to 39.64 in afternoon trade, though it is down 33% on the year and fell on Monday and Tuesday. "The fact that you didn't see the follow-through from some of these other regional banks, with what would appear to be such great news, really didn't inspire a lot of confidence in some of these regional banks," said Seth Hickle, a derivatives portfolio manager at Innovative Portfolios, referring to JPMorgan’s rescue of First Republic. "The problem with regionals are going to be rising interest rates,” said Matt Amberson, principal at options analytics firm ORATS.

Members of the FIA include the major banks on Wall Street. As a clearing house, the OCC settles and guarantee options contracts, working as a central counterparty for credit risk. Apart from the group meeting with the FIA, the OCC has also discussed this issue individually with some market participants, one of the sources said. The OCC told this person it did not see a major risk, but it wanted to assess its members' views and explore different risk scenarios. Many 0DTE options have a low probability of rising in value as they approach expiration.

☆ Analysis: Hawkish Fed could hobble volatility funds’ stock buying spree
▼ + stars: | 2023-02-01 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +4 min

The S&P 500’s (.SPX) 6.2% surge in January has been accompanied by a drop in measures of volatility across the board. The drop in market gyrations has triggered a buy-signal for certain computer-driven strategies including volatility control funds, risk parity funds and Commodity Trading Advisors (CTAs). Volatility control funds have raised their equity allocation to a nine-month high of 57.7%, strategists at Deutsche Bank wrote on Friday. Grinacoff, of BNP Paribas, estimates volatility control funds have assets of about $275 billion, while CTAs, not all of which have a volatility control strategy, as a group have $800 billion allocated across strategies. "Market volatility measured by VIX remains stuck above the 18 level, which is its long-term average.

Reuters Graphics Reuters GraphicsAmong factors fueling the swings is a flood of options trades, many of them short-term in nature. A surge in options trading tends to boost hedging by market makers – typically large banks or financial institutions that facilitate the trades and need to position in equity futures to reduce their risk from unexpected market moves. Their furious buying and selling can heighten short-term swings in stocks, adding to broader volatility, market participants said. LOW POSITIONINGMeanwhile, many so-called "real money" investors such as pension funds and mutual funds have cut their stock allocations to the bone after months of equity volatility, another factor fueling stock swings. At the same time, under-positioned investors have recently tended to jump aboard stock rallies, further extending the moves, market participants said.

☆ Stocks sink as investors wait for the Fed’s rate hike
▼ + stars: | 2022-09-20 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +2 min

Stocks slid Tuesday as investors grew anxious about the impact of another big rate hike. There were no earnings reports of note on Tuesday and not much economic data for investors to focus on other than a new housing report, which was mixed. The housing numbers are unlikely to change the minds of Fed policy makers, who will announce another rate hike on Wednesday. Stocks surged at the end of the trading session Monday after hovering near break-even levels for most of the day. “Transportation stocks are a canary in the coal mine when it comes to the economy.”

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