stock market – Chateau Langeais http://chateaulangeais.com/ Sun, 17 Apr 2022 12:31:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://chateaulangeais.com/wp-content/uploads/2021/10/icon-92-120x120.png stock market – Chateau Langeais http://chateaulangeais.com/ 32 32 Ametek Stock: Near Gains, According to Market Maker Coverage (NYSE: AME) https://chateaulangeais.com/ametek-stock-near-gains-according-to-market-maker-coverage-nyse-ame/ Wed, 09 Mar 2022 13:46:00 +0000 https://chateaulangeais.com/ametek-stock-near-gains-according-to-market-maker-coverage-nyse-ame/ Pgiam/iStock via Getty Images Investment thesis You just read it verbally, now watch it work in practice on a comparison of portfolio choices, evenly between Ametek Inc. (AME) and such as OEM inventories. Description of the company concerned AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices worldwide. It operates in two segments, Electronic […]]]>

Pgiam/iStock via Getty Images

Investment thesis

You just read it verbally, now watch it work in practice on a comparison of portfolio choices, evenly between Ametek Inc. (AME) and such as OEM inventories.

Description of the company concerned

AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices worldwide. It operates in two segments, Electronic Instruments (EIG) and Electromechanical (EMG). The Company’s EIG segment offers advanced instruments for the process, aerospace, energy and industrial markets; Its EMG segment offers electrical connectors and electronic packaging designed to protect sensitive devices and critical electronic components. AMETEK, Inc. was founded in 1930 and is headquartered in Berwyn, Pennsylvania.”

Source: Yahoo Finance

Street analysts

Yahoo finance

Equipment Manufacturer Inventory Risk-Reward Comparisons

Figure 1

MM hedging involves risk-reward trade-offs

blockdesk.com

(Used with permission)

The trade-offs here are between short-term upside price gains (green horizontal scale) considered worth protecting by market makers with short positions in each of the stocks, and past actual price declines experienced during of the holding of these shares (red vertical scale) . Both scales are percent change from zero to 25%.

The intersection of these coordinates with the numbered positions is identified by the stock symbols in the blue field to the right.

The dotted diagonal line marks the points of equal upward price change predictions derived from Market-Maker [MM] hedging actions and actual worst-case price declines from positions that could have been taken as a result of earlier MA predictions like today’s.

Our primary interest is in ARGX at the location [16]. A “market index” standard of reward-risk trade-offs is offered by the SPDR S&P 500 index ETF at [21].

These predictions are underpinned by the self-protective behaviors of MMs that typically need to put company capital at temporary risk to balance the interests of buyer and seller by helping capital-intensive portfolio managers adjust multi-billion dollar portfolio volumes. The hedging measures taken with real money betting daily define the magnitude of probable price changes expected for thousands of stocks and ETFs.

This map is a good starting point, but it can only cover some of the investment characteristics that must often influence an investor’s choice of where to invest their capital. The table in Figure 2 covers the above considerations and several more.

Compare alternative investments

Figure 2

detailed data implied by hedging actions

blockdesk.com

(Used with permission)

The column headers in Figure 2 define the items for each rank stock whose symbol appears to the left in the column [A]. The elements are derived or calculated separately for each stock, depending on the specifics of its situation and the forecast of the current MM price range. Data in red numbers is negative, usually undesirable for “long” positions. Table cells with “fillers” on a pink background signify generally unacceptable conditions for “buying” recommendations. The yellow fills are data for the main stock of interest and any issues in the ranking column, [R].

Readers familiar with our analytical methods may wish to skip to the next section displaying the price range forecast trends for AME.

The purpose of Figure 2 is to attempt universally comparable answers, stock by stock, of a) how SIGNIFICANT the gain in price may be, b) what is the LIKELIHOOD that the gain will be a profitable experiment, c) in what time frame this may occur, and d) what RISK of a price decline may be encountered during its holding period.

Column price range prediction limits [B] and [C] be defined by MM’s hedging actions to protect the firm’s capital which must be exposed to the risk of price changes from volume trade orders placed by large $”institutional” clients.

[E] measures the potential upside risks for the short MM positions created to execute these orders and rewards the potentials for the buy positions thus created. Past forecasts like this provide a history of relevant risk of lower prices for buyers. The most severe actually encountered are found in [F]during the periods of maintenance in the effort to reach [E] earnings. This is where buyers are most likely to accept losses.

[H] indicates what proportion of the [L] sample of similar past predictions made gains by causing the price to reach its [B] target or be above sound [D] cost of entry at the end of a maximum holding period limit of 3 months. [ I ] gives the net gains-losses of those [L] experiences and [N] suggests how much [E] can be compared to [ I ].

Other reward-risk trade-offs involve the use of [H] win odds with loss odds 100 – H as weights for N-conditioned [E] and for [F]for a combined yield score [Q]. The typical job retention period [J] to [Q] provides a symbol of merit [fom] ranking measure [R] useful in portfolio position preference. Figure 2 is arranged by row on [R] among the candidate titles, with EW ranked first.

In addition to candidate-specific stocks, these selection considerations are provided for the averages of nearly 3,500 stocks for which MM price range predictions are available today, and 20 of the top-ranked (per of) of these forecasts, as well as the forecast for the S&P 500 Index ETF (NYSEARCA:SPY) as a proxy for the stock market.

Recent trends in the MM price range SOUL Forecasts

picture 3

daily price range forecast, last 6 months

blockdesk.com

(Used with permission)

This picture is do not a “technical sheet” of past prices for AME. Instead, it’s the last 6 months of daily price scale forecasts upcoming market actions in the coming months. The only past information is the closing price of the stock on the day of each forecast.

This data divides the opposite predictions of the price range into bullish and bearish outlooks. Their trends over time provide additional insight into upcoming potentials and help keep perspective on what may be to come.

The small image at the bottom of Figure 3 is a frequency distribution of the daily appearance of the Range Index over the last 5 years of daily forecasts. The range index [RI] indicates how much the decline in the forecast range occupies that percentage of the entire range each day, and its frequency suggests what may seem “normal” for this stock, in the eyes of evaluators.

Here, the current level is close to its least frequent and least expensive occurrence, encouraging acceptance that we are looking at a realistic valuation for the AME. With almost all of the RIs moving above the current RI than below, there is ample room for an even more positive outlook.

Prospect of past profitability of investment candidates

Figure 4

Profitability prospects induced by hedging

blockdesk.com

(Used with permission)

This comparison map uses an orientation similar to Figure 1, where the most desirable locations are bottom and right. Instead of being limited to price direction, the questions are more qualitative: “how big” and “how likely” are expectations of price changes now?

Our main interest is the qualitative performance of AME, in particular in relation to the choices of alternative investment candidates. Here AME is at the location [6]the intersection of the horizontal and vertical scales of +10% gain and +97% insurance (chances of “winning”).

As an industry standard, SPY is at the location [5] with a gain of +7% and 100% profitability assurance. This is a very unusual posture for the ETF index most often seen as an overall picture of stock valuations.

The international unrest created by Russia’s invasion of Ukraine is undoubtedly a major factor here. SPY is rarely at a range index as low as 17. This suggests that 5/6 of the prospective price changes for the market ETF will occur on the upside. More than 83% of a price range of almost +16% could be reserved for equity investors. Although the “win odds” of this level may be 100 out of 100, it is never a certainty. And the scope of a maximum market rise can be momentary, providing little time or ability to turn equity holdings into cash at the peak.

Yet the current picture is one of considerable optimism across the broad market front.

Conclusion

Among these alternative investments explicitly compared, Ametek Inc. seems like a logical buying preference now for investors looking for short-term capital gain.

Additional disclosure: Peter Way and generations of the Way family are long-term providers of insight information, previously helping professional investors and now individual investors, to distinguish between wealth-building opportunities in individual stocks and ETFs. We do not manage money for others outside the family, but provide pro bono advice to a limited number of non-profit organizations.

We strongly believe that investors should keep their skin in their game by actively initiating capital commitment choices and time investments in their personal portfolios. Thus, our information presents for DIY investors what the most informed professional investors think. Their insights, revealed by their own self-hedging hedging actions, indicate what they believe is most likely to happen to specific issue prices in the weeks and months ahead. Evidence of how these past predictions have worked is regularly provided on our SA blog under my name.

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argenx SE has a close gain ahead, based on market maker coverage (NASDAQ:ARGX) https://chateaulangeais.com/argenx-se-has-a-close-gain-ahead-based-on-market-maker-coverage-nasdaqargx/ Mon, 07 Mar 2022 05:50:00 +0000 https://chateaulangeais.com/argenx-se-has-a-close-gain-ahead-based-on-market-maker-coverage-nasdaqargx/ Pgiam/iStock via Getty Images Investment thesis You just read it verbally, now watch it work in practice on a comparison of portfolio choices, evenly between argenx SE (ARGX) and like biotech stocks. Description of the company concerned “argenx SE, a clinical-stage biotechnology company, is focused on the development of antibody-based therapies for the treatment of […]]]>

Pgiam/iStock via Getty Images

Investment thesis

You just read it verbally, now watch it work in practice on a comparison of portfolio choices, evenly between argenx SE (ARGX) and like biotech stocks.

Description of the company concerned

“argenx SE, a clinical-stage biotechnology company, is focused on the development of antibody-based therapies for the treatment of autoimmune diseases, hematology and cancer. It is developing its lead product candidate, efgartigimod, for the treatment of patients with myasthenia gravis; phase III immune thrombocytopenia; and other similar ailments. The company has a strategic partnership with AbbVie S.À.RL and LEO Pharma A/S; and collaboration agreement with Cilag GmbH International, Staten Biotechnology BV and Shire International GmbH. argenx SE was incorporated in 2008 and is based in Breda, the Netherlands.

Source: Yahoo Finance

Street analysts estimate the growth of ARGX

Yahoo finance

Risk-reward comparisons of biotech stocks

Figure 1

MM Hedging Implicit Risk and Reward Map

blockdesk.com

(used with permission)

The trade-offs here are between short-term upside price gains (green horizontal scale) considered worth protecting by market makers with short positions in each of the stocks, and past actual price declines experienced during of the holding of these shares (red vertical scale) . Both scales are percent change from zero to 25%.

The intersection of these coordinates with the numbered positions is identified by the stock symbols in the blue field to the right.

The dotted diagonal line marks the points of equal upward price change predictions derived from Market-Maker [MM] hedging actions and actual worst-case price declines from positions that could have been taken as a result of earlier MA predictions like today’s.

Our primary interest is in ARGX at the location [16]. A standard “market index” of reward~risk trade-offs is offered by the SPDR S&P500 index ETF at [21].

These predictions are underpinned by the self-protective behaviors of MMs that typically need to put company capital at temporary risk to balance the interests of buyer and seller by helping capital-intensive portfolio managers adjust multi-billion dollar portfolio volumes. The hedging measures taken with real money betting daily define the magnitude of likely expected price changes for thousands of stocks and ETFs.

This map is a good starting point, but it can only cover some of the investment characteristics that must often influence an investor’s choice of where to invest their capital. The table in Figure 2 covers the above considerations and several more.

Compare alternative investments

Figure 2

detailed data for selection comparisons

blockdesk.com

blockdesk.com

(used with permission)

The column headers in Figure 2 define the items for each rank stock whose symbol appears to the left in the column [A]. The elements are derived or calculated separately for each stock, depending on the specifics of its situation and the current forecast of the MM price range. Data in red numbers is negative, generally undesirable for “long” holding positions. Table cells with a pink “fill” background signify conditions that are generally unacceptable for “buy” recommendations by our standards. The yellow fills are data for the main stock of interest and all shows in the ranking column, [R].

Readers familiar with our methods of analysis may wish to skip to the next section displaying the price range forecast trends for ARGX.

The purpose of Figure 2 is to attempt universally comparable answers, stock by stock, of a) how SIGNIFICANT the price gain might be, b) how likely is the gain to be a profitable experience, c) in what timeframe this may occur, and d) what A RISK of a price decline may be encountered during its holding period.

Column price range prediction limits [B] and [C] be defined by MM’s hedging actions to protect the firm’s capital which must be exposed to the risk of price changes from volume trade orders placed by large $”institutional” clients.

[E] measures the potential upside risks for the short MM positions created to fill these orders and rewards the potentials for the buy positions thus created. Past forecasts like this provide a history of relevant risk of lower prices for buyers. The most severe actually encountered are found in [F]during the periods of maintenance in the effort to reach [E] earnings. This is where buyers are most likely to accept losses.

[H] indicates what proportion of the [L] sample of similar past predictions made gains by causing the price to reach its [B] target or be above sound [D] cost of entry at the end of a maximum holding period limit of 3 months. [ I ] gives the net gains-losses of those [L] experiences and [N] suggests how much [E] can be compared to [ I ].

Other reward-risk trade-offs involve the use of [H] win odds with loss odds 100 – H as weights for N-conditioned [E] and for [F]for a combined yield score [Q]. The typical job retention period [J] to [Q] provides a symbol of merit [fom] ranking measure [R] useful in portfolio position preference. Figure 2 is arranged by row on [R] among the candidate titles, with ARGX at the top.

In addition to candidate-specific stocks, these selection considerations are provided for the averages of nearly 3,500 stocks for which MM’s price range predictions are available today, and 20 of the top-ranked (per of) of these forecasts, as well as the forecast for the S&P 500 Index ETF (NYSEARCA:SPY) as a proxy for the stock market.

Recent Trends in MM Price Range Predictions: ARGX

picture 3

past ARGX forecast productivity

blockdesk.com

(used with permission)

This picture is do not a “technical sheet” of past prices for EW. Instead, it’s the last 6 months of daily price scale forecasts upcoming market actions in the coming months. The only past information is the closing price of the stock on the day of each forecast.

This data divides the opposite predictions of the price range into bullish and bearish outlooks. Their trends over time provide additional insight into upcoming potentials and help keep perspective on what might be to come.

The small image at the bottom of Figure 3 is a frequency distribution of the daily appearance of the Range Index over the last 5 years of daily forecasts. The range index [RI] indicates how much the decline in the forecast range occupies that percentage of the entire range each day, and its frequency suggests what might appear “normal” for that stock, in the eyes of evaluators.

Here, the current level is close to its least frequent and least expensive occurrence, encouraging acceptance that we are looking at a realistic valuation for ARGX. With almost all past IRs above the current IR than below, there is more room for an even more positive outlook.

Prospect of past profitability of investment candidates

Figure 4

previous MM forecast results

blockdesk.com

This comparison map uses an orientation similar to Figure 1, where the most desirable locations are bottom and right. Instead of being limited to price direction, the questions are more qualitative: “how big” and “how likely” are the price change expectations now?

Our main interest is the qualitative performance of ARGX, particularly in relation to the choices of alternative investment candidates. Here ARGX is at location [6]the intersection of the horizontal and vertical scales of +19% gain and +90% insurance (chances of “winning”).

As an industry standard, SPY is at the location [7] with a gain of +7% and an assurance of profitability of 83%. ARGX tends to dominate all others in this comparison.

Conclusion

Among these alternative investments explicitly compared argenx SE seems like a logical buying preference now for investors looking for short-term capital gain.

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Dubai launches ‘xCube’ to boost business of market makers https://chateaulangeais.com/dubai-launches-xcube-to-boost-business-of-market-makers/ Thu, 27 Jan 2022 08:00:00 +0000 https://chateaulangeais.com/dubai-launches-xcube-to-boost-business-of-market-makers/ Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Governor of Dubai, Deputy Prime Minister and Minister of Finance, announced the launch of the company “xCube” to organize and facilitate the activities of market maker companies in the financial market from Dubai. The step is part of the Dubai Securities and Exchange Higher Committee’s strategy […]]]>

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Governor of Dubai, Deputy Prime Minister and Minister of Finance, announced the launch of the company “xCube” to organize and facilitate the activities of market maker companies in the financial market from Dubai.

The step is part of the Dubai Securities and Exchange Higher Committee’s strategy to increase the size of the emirate’s stock market to AED3 trillion ($816 billion) in the coming period.

Sheikh Maktoum has appointed Essa Kazim as Chairman of the Board of xCube. Arif Amiri, Saeed al-Awar, Hind bint Kharbash and Jacques Visser were appointed council members.

XCube aims to develop and adopt state-of-the-art algorithms and technologies to perform market-making activities and high-frequency trading in spot equities and derivatives listed on local exchanges.

Kazim, who is also the governor of the Dubai International Financial Centre, said both retail and institutional investors will benefit from the improved pricing margins and lower volatility that often results from market makers being active in the markets. .

“By bringing the latest technology and market making know-how to local markets, we anticipate renewed interest from local and global investors,” he said.

xCube aims to enhance the competitiveness of Dubai’s financial markets and attract more local and foreign capital and investors.

The market maker fund also seeks to invest in promising stocks and hedge risk, which in turn leads to building investor confidence and creating a more buoyant stock market.

In late 2021, a committee overseeing stock market development said Dubai plans to launch two funds worth a total of AED3 billion ($816 million) to boost trading in stock markets and encourage investors. small and medium-sized enterprises to register on its financial markets.


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Opinion: Citadel’s Ken Griffin calls accusations his market makers colluded with Robinhood a “bad comic joke” https://chateaulangeais.com/opinion-citadels-ken-griffin-calls-accusations-his-market-makers-colluded-with-robinhood-a-bad-comic-joke/ Wed, 10 Nov 2021 19:57:00 +0000 https://chateaulangeais.com/opinion-citadels-ken-griffin-calls-accusations-his-market-makers-colluded-with-robinhood-a-bad-comic-joke/ Ken Griffin may not have finished hearing about the #KenGriffinLied meme on social media. In an interview Wednesday morning at the Dealbook Online Summit, the billionaire founder of hedge fund Citadel LLC and market maker Citadel Securities lashed out at his legion of hateful retail investors on social media who continue to believe that he […]]]>


Ken Griffin may not have finished hearing about the #KenGriffinLied meme on social media.

In an interview Wednesday morning at the Dealbook Online Summit, the billionaire founder of hedge fund Citadel LLC and market maker Citadel Securities lashed out at his legion of hateful retail investors on social media who continue to believe that he played a key role in the abrupt end. the chaotic January contraction in stocks even like GameStop GME,
-3.59%
and others.

When the idea is emphasized that Griffin is sitting in the middle of the memes stock market movement and many retail investors believe his role as a ubiquitous market maker stems from the Robinhood HOOD buy orders,
-6.02%
and other commission-free trading platforms while running a massive hedge fund, creates a situation where he wields too much power, Griffin said.

“Most people I deal with love the fact that as a retail investor you trade instantly and get a better price in return,” said Griffin, championing the controversial pay-for-flow practice. orders.

But while many retail traders now want this practice to be scrutinized by the SEC and other regulators, their real problem with Griffin comes from seeing him as an almost Rasputin-like figure in the decision to Robinhood to restrict trading on GameStop shares on January 1. 28.

Because Citadel Securities uses payment for order flow to pay for the privilege of executing more than half of Robinhood’s trades, this is a key source of application revenue, and the importance of this The relationship fueled conspiracy theories that Citadel Securities executives relied on Robinhood to end the short squeeze by banning users from buying meme shares.

Citadel LLC’s $ 2.75 billion investment in / bailout of Melvin Capital, the hedge fund run by target retail investor Gabe Plotkin, fanned the flames of these theories, as did a modified lawsuit filed in Florida on September 21 on behalf of a group of retail investors. who claimed to prove that Robinhood executives were talking to their Citadel Securities counterparts a day before the restrictions were announced.

An SEC investigation into GameStop’s shortening found no evidence of collusion, which Griffin and his team have publicly celebrated.

Griffin spoke out on his experience in the center of the storm on Wednesday.

“The whole GameStop conspiracy theory, I mean it’s come and gone,” Griffin said, revealing that he doesn’t spend a lot of time on Reddit. “It was fascinating to be at the center of this conspiracy.”

When asked what that does, Griffin looked at both his detractors and a certain New York-based TV show.

“It was like a bad comedy joke,” Griffin replied. “It was like a Saturday Night Live skit the whole time.”

But apparently Griffin was not at the forefront of the conspiracy. He said on Wednesday that he doesn’t have a Twitter account and that “people are just coming to tell me what’s going on.”

Those folks will have been busy Wednesday afternoon as retail social media investors pilloried Griffin’s appearance, a predictable outcome because inviting Ken Griffin to talk about the stocks meme is, for many, asking Kanye. West what he thinks of the Kardashians.

“Ken Griffin lied (again),” read the headline of a popular r / AMCStock subreddit post on Wednesday afternoon.

On Twitter, the takes were more visual:

Despite several social media threads pledging to use Griffin’s comments as more fodder for their favorite actions, GameStop and AMC Entertainment AMC,
-4.11%,
were down more than 4% on Wednesday afternoon.

Griffin also shared his growing concerns about inflation, his advice to the White House that the fiscal stimulus has gone too far, his continued cryptocurrency skepticism and a new pledge to spend some of his fortune. to defeat Illinois Governor JB Pritzker, with whom he publicly opposed what Griffin sees as the political destruction of his hometown of Chicago.


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On DFM, now is the time for market makers to cash in https://chateaulangeais.com/on-dfm-now-is-the-time-for-market-makers-to-cash-in/ Sun, 07 Nov 2021 05:46:18 +0000 https://chateaulangeais.com/on-dfm-now-is-the-time-for-market-makers-to-cash-in/ DFM as a market and as a business is a hot ticket. Image Credit: Virendra Saklani / Gulf News Dubai’s decision to list government and semi-government companies is expected to take Dubai’s financial market to the next level. A stock market needs the presence of blue chips to attract investors. Currently, banking and real estate […]]]>


DFM as a market and as a business is a hot ticket.
Image Credit: Virendra Saklani / Gulf News

Dubai’s decision to list government and semi-government companies is expected to take Dubai’s financial market to the next level. A stock market needs the presence of blue chips to attract investors. Currently, banking and real estate constitute an important part of the index, which is why the new quotations will allow better sector diversification.

In the Middle East, large SOEs are seen as stable, well-managed, and shareholder-friendly. Already, reports suggest that DEWA (Dubai Electricity and Water Authority), valued at $ 25 billion, will be the largest list on record in the emirate for now.

Equally important is the decision to create a MAD 2 billion market making fund, which will help increase liquidity in the Dubai stock markets. On DFM or generally in the Middle East, trading volumes are still low by international standards, and even blue chip stocks suffer from low liquidity. Low volumes increase market volatility and also increase the severity of a stock market crash.

On the other hand, good liquidity will attract international investors with deep pockets, as it helps to reduce transaction costs and allows easy entry and exit of trades. It’s a chicken-and-egg scenario that can only be solved by appealing to market makers. The move from Dubai will strengthen DFM’s long-term profile and make it more representative of the local economy.

And finally, it puts an end to the rumors of merger between ADX and DFM. Instead, the new round of initiatives shows the Dubai government is serious about DFM at higher heights.

So that brings us to the next big question; Which companies will be the immediate beneficiaries of the current movement. The most obvious is the Dubai financial market, and stock market shares have already risen 39% in recent trading sessions. Volumes on the stock exchange will benefit from a considerable increase, and revenues are already on the rise and should reach 270 million Dh in 2021 and against 187 million Dh in 2019.

The listing of large companies like DEWA should be another tailwind. In addition, DFM, with a market capitalization of Dh 11.12 billion, is fundamentally sound, with a net cash reserve of Dh 3.2 billion.

Two other companies that will benefit are BH Mubasher and Al Ramz Securities, which offer brokerage services. BH Mubasher was already showing good growth in 2020 when it posted the highest turnover since its inception. The company’s vision is to be a full-fledged boutique investment firm. It is the first company on DFM to obtain a short-term margin trading license and is also approved as a Securities Lending and Borrowing Agent (SLB).

Al Ramz also turned around its financial performance, with revenues growing strongly in the last quarter. It acquired the market making business of Shuaa Capital in 2020. With Dubai very focused on improving transaction volumes, the market making business is expected to thrive. The company also plans to repurchase nearly 10 percent of its issued shares, which gives some reassurance.

These companies have an exciting road ahead, and investors should watch …


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Consumer advocates urge CFPB to curb payday loan companies https://chateaulangeais.com/consumer-advocates-urge-cfpb-to-curb-payday-loan-companies/ Tue, 12 Oct 2021 22:17:00 +0000 https://chateaulangeais.com/consumer-advocates-urge-cfpb-to-curb-payday-loan-companies/ Consumer Financial Protection Bureau Headquarters in Washington, DC REUTERS / Andrew Kelly Summary Law firms Related documents Defenders send letter to new CFPB director Rohit Chopra on access to earned wages They argue that EWA is risky, should be regulated like credit The company and law firm names listed above are generated automatically based on […]]]>

Consumer Financial Protection Bureau Headquarters in Washington, DC REUTERS / Andrew Kelly

  • Defenders send letter to new CFPB director Rohit Chopra on access to earned wages
  • They argue that EWA is risky, should be regulated like credit

The company and law firm names listed above are generated automatically based on the text of the article. We are improving this functionality as we continue to test and develop in beta. We appreciate comments, which you can provide using the comments tab on the right of the page.

(Reuters) – Dozens of lawyers have called on the US Consumer Financial Protection Bureau to regulate wage access products earned as a form of credit, arguing that giving workers money before payday poses unresolved risks.

In the letter to Rohit Chopra, who was sworn in as the agency’s director on Tuesday, 96 attorneys, including the National Consumer Law Center, urged the CFPB to rescind Trump-era legal guidelines that certain consumer products Wage Earned Access, or EWA, should not be deemed credit under consumer protection laws.

EWA companies advance the wages earned to workers, either directly or as a benefit through their employers. Businesses describe themselves as a sustainable alternative to high interest payday loans and bank overdrafts.

In their letter and one legal note, consumer advocates have argued that workers who use the programs tend to do so consistently week after week, putting them on a financial treadmill where even small fees, to speed up payments, for example, can accumulate.

“At the end of the day, consumers may just find themselves in a situation where they regularly pay to get paid,” they wrote.

A CFPB spokesperson said on Tuesday the agency received the letter. “We appreciate the contribution of this coalition on this issue,” said the spokesperson.

James Kim, a partner at Ballard Spahr who advises fintech companies, said Tuesday that the call to treat EWA as a credit does not distinguish between products, which have different characteristics.

“Putting it all together and saying that collectively we should conclude that they are all credit or uncredited is a mistake,” he said.

The EWA industry has occupied a regulatory gray area adjacent to traditional lenders.

In November, a memo from Kathleen Kraninger, then director of CFPB, stated that EWA products with certain features, such as those that do not collect worker payments, are not credits, but rather akin to an accelerated worker pay cycle.

Advocates called for the order to be overturned on Tuesday, saying its legal reasoning creates a “slippery slope” that can be used to undermine legal protections for consumers.

They pointed out that the CFPB issued a notice in December that Payactiv Inc’s EWA product was not a credit, although it does charge attendees a nominal fee in some cases. The agency is also expected to review this approval, they said.

Advocates also said the CFPB should drop the advisory program that allowed Payactiv to seek advice, calling it inappropriate for the agency to endorse specific products.

Payactiv’s general counsel Aaron Marienthal said on Tuesday the company was reviewing the letter.

Read more:

US Senate votes to confirm new head of consumer oversight

capital markets ecosystem over the past 20 years. The growing electronization of the markets has enabled them to monopolize a large part of the action of the banks, whose appetite for market making was greatly reduced by the changes to their capital rules following the financial crisis.

So why is the #WeAreMarketMakers campaign being launched now? It is surely not to mark the 10th anniversary of their professional body, the FIA ​​European Principal Traders Association.

READ UK crackdown on risky trading threatens stock platforms even ‘constantly tempting consumers’

Granted, if you look into the United States, there are plenty of reasons the industry might think it needs a bit of a PR boost. After years of trying to combat public suspicion of “high frequency trading,” the industry is now in the regulatory limelight, following its role in the stock market saga of Robinhood and GameStop memes.

Gary Gensler, chairman of the United States Securities and Exchange Commission, raised the possibility of banning “payment for order flow,” the controversial practice that allows digital stock brokers like Robinhood to earn money. money by selling transactions to market makers.

He also expressed concern about the dominance of two of the biggest market makers, Citadel and Virtu, which together manage more than 70% of total retail sales in US-listed stocks.

Meanwhile, market makers are pushing fiercely on possible reforms to the US Treasury bill market. Market makers strongly support some suggested changes, such as the introduction of central clearing of treasury securities, but are opposed to other reforms that they see as special advocacy on the part of the banks.

While lobbyists for independent market makers have their hands full in the United States, the stakes in Europe are quite different. Their European group, of which Citadel and Virtu are prominent members, argues that payment for order flows is illegal in the EU under MiFID II. But market makers fear that this could happen in several Member States anyway, notably in Germany. This creates “an unfair playing field” and endangers best execution, according to Piebe Teeboom, secretary general of FIA EPTA.

As in the United States, broader regulatory reviews are also underway, with the EU reviewing MiFID II and the UK conducting a broader review of wholesale financial market rules.

Independent market makers want their voices heard in these debates and the new PR campaign is clearly designed to highlight the important role they currently play in capital markets.

A report commissioned by FIA EPTA shows that its members provided a key source of liquidity for asset managers when some banks pulled out during the trade crisis of last March.

“Liquidity issues in bond markets at the onset of the pandemic created a vacuum, forcing buyers to find new trading partners and access points to liquidity – and market making firms have stepped up to fill the void, ”said report author Rebecca Healey.

Independent market makers were particularly important for smaller asset managers, which did not have such strong relationships with banks, according to the report.

READ De-Spac hangover looms for evening of $ 127 billion blank checks: “Spac market is in terrible shape”

The crisis has shown the importance of having “a diverse set of liquidity providers at your disposal,” Teeboom explains.

To reinforce this diversity, market makers are keen to ensure that they are not disadvantaged in current regulatory revisions. They are, for example, opposed to the UK Treasury’s idea of ​​removing the EU’s “share swap obligation”, which was introduced to encourage trading in transparent markets. For market makers, the grand prize would be more transparency around price relationships, in particular the introduction of a “consolidated band” for both stocks and bonds.

But market makers often find themselves confronted with large investment banks, who want to defend their less transparent relational model. “We still see a bit of a pullback from vested interests,” Teeboom says. “There is no point in simply changing the rules to facilitate outdated trading methods. There is a role for relationship-based delivery. But it is very clear from the comments in our report that buyers want diversity at their fingertips. “

There are good reasons to strengthen this diversity, but investment banks have tremendous lobbying power. No matter how strong their argument is, market makers will have their work cut out for them to win the PR battle.

To contact the author of this story with comments or news, email David Wighton


]]> Market makers face banks in public relations battle over trade reforms https://chateaulangeais.com/market-makers-face-banks-in-public-relations-battle-over-trade-reforms/ Mon, 04 Oct 2021 07:00:00 +0000 https://chateaulangeais.com/market-makers-face-banks-in-public-relations-battle-over-trade-reforms/ When an industry lobby group launches a public relations campaign, the cynical observer instinctively asks: why? Why now? Do they have an image problem? What are they worried about? Do they want changes in the regulations? These are the questions raised by the campaign “For a better knowledge of independent market makers” in Europe, launched […]]]>


When an industry lobby group launches a public relations campaign, the cynical observer instinctively asks: why? Why now? Do they have an image problem? What are they worried about? Do they want changes in the regulations?

These are the questions raised by the campaign “For a better knowledge of independent market makers” in Europe, launched on September 27th. Companies such as Citadel Securities and Virtu Financial that use their own capital to build equity and bond markets have become important parts of the capital markets ecosystem over the past 20 years. The growing electronization of the markets has enabled them to monopolize a large part of the action of the banks, whose appetite for market making was greatly reduced by the changes to their capital rules following the financial crisis.

So why is the #WeAreMarketMakers campaign being launched now? It is surely not to mark the 10th anniversary of their professional body, the FIA ​​European Principal Traders Association.

READ UK crackdown on risky trading threatens stock platforms even ‘constantly tempting consumers’

Granted, if you look into the United States, there are plenty of reasons the industry might think they need a PR boost. After years of trying to combat public suspicion of “high frequency trading,” the industry is now in the regulatory limelight, following its role in the stock market saga of Robinhood and GameStop memes.

Gary Gensler, chairman of the United States Securities and Exchange Commission, raised the possibility of banning “payment for order flow,” the controversial practice that allows digital stock brokers like Robinhood to earn money. money by selling transactions to market makers.

He also expressed concern about the dominance of two of the biggest market makers, Citadel and Virtu, which together manage more than 70% of total retail sales in US-listed stocks.

Meanwhile, market makers are pushing fiercely on possible reforms to the US Treasury bill market. Market makers strongly support some suggested changes, such as the introduction of central clearing of treasury securities, but are opposed to other reforms that they see as special advocacy on the part of the banks.

While lobbyists for independent market makers have their hands full in the United States, the stakes in Europe are quite different. Their European group, of which Citadel and Virtu are prominent members, argues that payment for order flows is illegal in the EU under MiFID II. But market makers fear that this could happen in several Member States anyway, notably in Germany. This creates “an unfair playing field” and endangers best execution, according to Piebe Teeboom, secretary general of FIA EPTA.

As in the United States, broader regulatory reviews are also underway, with the EU reviewing MiFID II and the UK conducting a broader review of wholesale financial market rules.

Independent market makers want their voices heard in these debates and the new PR campaign is clearly designed to highlight the important role they currently play in capital markets.

A report commissioned by FIA EPTA shows that its members provided a key source of liquidity for asset managers when some banks pulled out during the trade crisis of last March.

“Liquidity issues in bond markets at the onset of the pandemic created a vacuum, forcing buyers to find new trading partners and access points to liquidity – and market making firms have stepped up to fill the void, ”said report author Rebecca Healey.

Independent market makers were particularly important for smaller asset managers, which did not have such strong relationships with banks, according to the report.

READ De-Spac hangover looms for evening of $ 127 billion blank checks: “Spac market is in terrible shape”

The crisis has shown the importance of having “a diverse set of liquidity providers at your disposal,” Teeboom explains.

To reinforce this diversity, market makers are keen not to be disadvantaged in the current regulatory revisions. They are, for example, opposed to the idea of ​​the British Treasury to abolish the EU’s “share swap obligation”, which was introduced to encourage trading in transparent markets. For market makers, the jackpot would be greater transparency around price reporting, in particular the introduction of a “consolidated band” for both stocks and bonds.

But market makers often find themselves confronted with large investment banks, who want to defend their less transparent relational model. “We still see a bit of a pullback from vested interests,” Teeboom says. “There is no point in simply changing the rules to facilitate outdated trading methods. There is a role for relationship-based delivery. But it is very clear from the comments in our report that buyers want diversity at their fingertips. “

There are good reasons to strengthen this diversity, but investment banks have tremendous lobbying power. No matter how strong their argument is, market makers will have their work cut out for them to win the PR battle.

To contact the author of this story with comments or news, email David Wighton


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BlackRock responds to BIS theory that it bypassed market makers https://chateaulangeais.com/blackrock-responds-to-bis-theory-that-it-bypassed-market-makers/ Sun, 09 May 2021 07:00:00 +0000 https://chateaulangeais.com/blackrock-responds-to-bis-theory-that-it-bypassed-market-makers/ Receive free updates on exchange traded funds We will send you a MyFT Daily Summary email gathering the latest news on exchange traded funds every morning. Interested in ETFs? Visit our ETF Hub for investor insights and insights, market updates and analysis, and easy-to-use tools to help you select the right ETFs. BlackRock hit back […]]]>


Receive free updates on exchange traded funds

Interested in ETFs?

Visit our ETF Hub for investor insights and insights, market updates and analysis, and easy-to-use tools to help you select the right ETFs.

BlackRock hit back at suggestions from the Bank for International Settlements that exchange-traded funds may have bypassed market makers during the March 2020 market liquidation.

The BIS document suggested that significant price dislocations opened up last year between bond ETFs and the prices of their underlying securities because ETF managers deliberately handed over baskets of funds to authorized participants. ‘low quality bonds. This would have discouraged the underlying trading and blocked the arbitrage mechanism to bring an ETF’s share price back in line with its net asset value.

But in a report released on Monday, the world’s largest asset manager says the data he compiled proves he didn’t and that those so-called buy-back baskets contained a mix of stocks reflecting faithfully the underlying assets of each ETF.

APs and market makers are the engines of ETFs, not only providing liquidity, but also fulfilling an intermediary role: accepting baskets of securities from the ETF provider and returning them daily to the provider, trading the securities sub- underlying assets of the ETF and control the amount of existing ETF shares by creating and redeeming them. This process is supposed to keep ETF prices close to the underlying NAV of the securities they hold, but in March of last year there was a huge price dislocation.

BlackRock analysis shows that between February 19 and March 12, the worst day of the crisis, 95 percent of the 1,000+ stocks held by the $ 21.8 billion iShares $ iBoxx High Yield Corporate Bond ETF (HYG) appeared in the buyback baskets received by AP at one point.

Similarly, 67% of the roughly 2,000 credits held by the $ 41.6 billion iShares iBoxx Investment Grade Corporate Bond (LQD) ETF were in the baskets. The numbers for a series of five fixed income ETFs domiciled in Europe ranged from 80 to 89%, with the exception of one corporate bond fund which actually saw net inflows during the crisis period.

BlackRock argued that these numbers show that the baskets were very diverse when sold, which left him little wiggle room for filling the repurchase baskets with disproportionately high quality securities, even though he had been inclined to do it.

Unlike those of equity ETFs, bond ETF redemption baskets usually do not contain all securities, as the relatively large minimum trading size of bonds means that it can be impractical to hand a AP a tiny shard of hundreds. even thousands of credits.

The way bond ETFs were traded during the market liquidation caused by Covid in March-April 2020 has come under scrutiny. BlackRock’s Market ETF (BND) and $ 71 billion iShares Core US Aggregate Bond (AGG) ETF closed at haircuts of 6.2% and 4.4% respectively on March 12.

An array of other junk bond, municipal debt, bank loan, and US government bond ETFs have also traded at extraordinary discounts, although ETFs are deliberately designed to closely track the value of their stocks. underlying assets.

Other data from BlackRock on the average duration, bid-offer spread and liquidity of the contents of the buyback basket, compared to ETFs themselves, shows relatively little difference between the two, although in some cases the spreads were a little wider. for the securities in the basket.

“The [BIS] The document suggested that some issuers would try to offer more concentrated baskets. It was actually the opposite, ”said Samara Cohen, co-head of markets and investments at iShares, of a period she described as“ the mother of all stressed bond markets ”.

“In a volatile market with a lot of difficulty around price transparency, the best way to ensure that we are delivering a representative basket was to widen the basket,” Cohen said. “A more diverse basket was also what the market maker community wanted. This relieved them of having to sell concentrated positions. “

In addition, the higher the level of redemptions, the more it is necessary to widen the redemption baskets in order to prevent an ETF from becoming increasingly asymmetrical with respect to its underlying index, has it. she adds.

The BIS analysis covered a longer period than the BlackRock study, with no artificial deadline of March 12. It also looked at a wider range of sub-sectors, including Treasury bond funds, and a wider range of ETF providers.

Contrary to the BIS study, Cohen said it was the discounted price of many bond ETFs that truly reflected the market’s perceptions of fair value during the crisis, and not the prices of the underlying bonds used to calculate. the net asset value of the fund.

BlackRock said, for example, that on March 12 of last year, at the height of the stock market storm, LQD traded nearly 90,000 times, compared to an average of just 37 times each for the five largest holdings. of the ETF.

Throughout March, more than half of LQD’s holdings were traded between zero and five times a day, on average, he added.

“Price formation based on tens of thousands of transactions is likely to be more informative than price formation based on considerably fewer transactions in the underlying bonds,” Cohen said.

“We have never released this data before,” Cohen added. “This is a new dimension of what has become a truly massive body of ETF literature. “

Click here to visit the ETF hub


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How moves in the VIX can make market makers fearful https://chateaulangeais.com/how-moves-in-the-vix-can-make-market-makers-fearful/ Tue, 02 Mar 2021 08:00:00 +0000 https://chateaulangeais.com/how-moves-in-the-vix-can-make-market-makers-fearful/ Steve Sosnick, chief strategist of Interactive Brokers, joins Yahoo Finance to discuss what the VIX moves are saying about the market. Video transcript [MUSIC PLAYING] – This is Yahoo Finance Live. We are looking at futures that indicated a slightly lower open, so far. Now they have reversed and they point to a very slightly […]]]>


Steve Sosnick, chief strategist of Interactive Brokers, joins Yahoo Finance to discuss what the VIX moves are saying about the market.

Video transcript

[MUSIC PLAYING]

This is Yahoo Finance Live. We are looking at futures that indicated a slightly lower open, so far. Now they have reversed and they point to a very slightly higher open, perhaps building on the big gains we saw yesterday in the major averages.

Let’s take a look at Steve Sosnick, the chief strategist of Interactive Brokers. And Steve, one of the similar themes – which we talked about a few weeks ago – is about the kind of discrepancy between what we would normally expect from the VIX at a time like this, and what is going on underlying them. actions. And is that we still see a relatively high VIX, and a high VIX curve, as stocks recover. Which is confusing for some people. And as Miles has spoken of many times, this has led Marko Kolanovic – above JP Morgan – to say that we may even see a bubble in the VIX. So I am curious, first of all, to have your opinion on this kind of speech.

STEVE SOSNICK: As much as I respect my colleague from JP Morgan– my colleague, he’s a much more renowned strategist than I– he– I’m going to push him away, on this one. Because this one – there are a few things that I think it lacks, in terms of VIX. And that’s where having been a trader for so many years comes into play.

Part of the thing with … part of the thing that I think people are looking at. You know, he said it’s very high relative to historical volatility. As far as I know, it was using historic volatility near the close. And if you want an example of how this fails you, think of a day like last Wednesday where we dived for most of the day and then closed essentially unchanged.

Well if you use historical volatility close to the close that is around zero and goes into the calculations going forward as close to zero. The problem is, if you are a trader, you consider this day to be an incredibly volatile day. I’m using – I’m going to use a high-low volatility calculation – which is sorry to be really esoteric, here – but I’m going to worry if I can make money by trading – by trading my gamma , covering my wallet, buying low, selling high. And I’m going to add 2% volatility to that equation, that’s what we’ve seen. This equates to an annualized volatility of 32%.

So this is the first part. So depending on whether you are just using historical volatility near the close, the VIX will always look high. Because professionals, who trade the options that would make up the VIX calculation, use high-low volatility. Because that’s how they trade.

Second, the below market option – the VIX takes a wide range of options, so the below market options have always kind of pushed the VIX up. They’ve been doing this since 1987 when the world sort of realized they needed a little downward bias. And it was better to hedge with options than to try and sell futures in a bear market. The difference is now – and I hate to use the term “it’s different this time”, because those are extremely dangerous words – but right now what we’re seeing is with all this speculation on the calls, upward calls also raise the VIX. They actually had a slightly depressing effect on VIX.

So you have this combination that also works. This last part may or may not be sustainable, in the longer term. But as long as we see demand for calls, we’ll see an additional premium – which we’re seeing on VIX – over what we normally see on historic volatility near the close.

Steve, in a simpler way – if it’s possible for volatility, and that sort of thing –

STEVE SOSNICK: Sorry.

Are the markets just – are the markets just looking at one – or are traders just anticipating a different market environment now, than they were two years ago? And is that maybe going to change a lot of these comparisons that strategists try to make? What about the themes that they try too hard to describe to their clients, when clients ask what is going to happen to the stock market?

STEVE SOSNICK: Yeah, that’s interesting because at the same time you’ve kind of – you’ve had the Fed more or less of a rush on volatility for a while. Because with the amount of – I’ll call it – the stimulus, and so forth, it should somehow have a reducing effect on volatility. But I think it’s gotten so extreme that we’re seeing the opposite.

And again, what we’re seeing now that we really haven’t seen before – maybe for a short time in 1999 – was this mad speculation about the calls. And what’s happening now is the markets are adjusting to that. If you’re a call writer – many of whom I guess are the folks watching this – you’re going to charge an extra premium for the calls you write. Market makers certainly do.

And so you see a different environment now. Whether this is a definitely different environment remains to be seen.

And then we had the opening bell on Wall Street. Yet another SPAC, TCW, ringing the opening bell. Steve, let’s look at the market from a 100,000 foot perspective. And I’m sure you saw the new ultra-millionaire tax proposed by Elizabeth Warren yesterday. 2% annual tax on household and trust equity between $ 50 million and $ 1 billion. What do you think this has an impact on the market? And I’m asking management this – maybe the market doesn’t understand how much taxes – corporate taxes, maybe even personal taxes if there is a trade tax – maybe that it comes into effect somewhere, well, under the Biden administration within the first two years. And stocks at these levels do not properly reflect this reality.

STEVE SOSNICK: Well, Brian, I think a wealth tax is going to be a big challenge. I think … you know, think about who pays the lobbyists. And I have a feeling it’s going to be difficult to go through. I think in the – you know, I think in terms of transaction taxes, it’s going to be tough as well. I think that would really throw sand in the cogs of the market, if you were successful in doing it.

I think right now – and in many ways this ties in with Julie’s original question – VIX futures are showing a high level in April and May. And I think it has to do with the more basic income taxes people have to pay. I think market makers are concerned that the public, who have successfully speculated, will have to take money out of the market to pay their regular income taxes. Because I think people are going to be a little blown away by their tax bills if they are successful in trading. And invest for the short term, like a lot of people have done.

So the 100,000-foot view? It’s difficult. Right now the one thing I would say more than anything is what scares me the most, is the lack of fear itself. But I think when it comes to specific taxes, I’m going to say we’re going to go through the tax season of April 15 first. And then start to worry about some of those things, which can really rock the basket of apples if they come in, in a lot of ways.

Hey, Steve, is the futures curve also steep due to concerns about inflation and / or bond yields? Perhaps fear is too strong a word, since we are also looking at strengthening the economy. But how much do we have to do with what seemed like – a tantrum, again, too strong a word – but those kinds of jolts in the market that are caused when we see higher yields.

STEVE SOSNICK: I’ll call it a pre-tantrum. I think people are starting to worry that there might be a tantrum. We have a lot of Fed-speak this week. I think the chairman made it very clear that we don’t increase rates — we don’t increase inflation rates until we see the white of their eyes, sort of thing. But let’s see what other Fed Governors have to say when they speak up this week.

I think a year and a half is not necessarily enough to worry people. I think a seventh – a 3/4 addition, too, is probably the next level of concern. I think what surprised people was that along the way, people expected the Fed to intervene on the long-term yield curve when it hit a, or when it hit. one and a quarter, or a year and a half. And we haven’t seen that. And I don’t think they want to do it. I think it adds a bit of risk to the market. But not in a really unhealthy way, because – again, what we’re talking about is strangely a risk of strengthening the economy. And I think at the end of the day everyone wants a stronger economy, even though that may have unforeseen effects in the market. On the stock market, per se.

Steve Sosnick, Chief Strategist of Interactive Brokers. Thank you very much to you and your argument Lael Brainard from the Fed speaking at 1:00 pm today. So while she didn’t address this issue yesterday in some comments, we’ll see if she does today.


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