Episode Transcript
[00:00:06] Welcome to the John Lothian News daily Update podcast for September 24, 2024. I am your host, John Lothian. This podcast is brought to you by John Lothian News, the home of markets wiki and markets wiki education. Thank you for joining us. Here are the hits and takes cabinets from today's JLN a recent study reveals that while Robinhood advertises rock bottom fees for options trading, its customers face hidden transaction costs significantly higher than those at other brokers. The study, conducted by finance professors, found that nearly 7% of the dollar value of Robinhoods options transactions is lost to those hidden costs, compared to just 1.8% at Fidelity and a slightly negative cost at Vanguard. Robinhood disputes the findings, arguing that it delivers better prices relative to exchanges. The study suggests that while Robinhood may be cheaper for options with narrow bid ask spreads, brokers like Fidelity and Vanguard offer better overall value for most options trades on September 25, Fincen will host a virtual information session on the Corporate Transparency Acts beneficial ownership reporting requirements. The session will cover how companies doing business in the US can comply with the law by reporting information on who owns or controls them to the US Department of the Treasury's Financial Crimes Enforcement Network, or FinCEN. The Commodity Futures Trading Commission, or CFTC, announced a record breaking issuance of four whistleblower awards totaling approximately $4.5 million to seven individuals. These awards, the most granted in a single day by the CFTC, recognized the whistleblowers for their significant contributions to multiple enforcement actions. The recipients included victims of fraud, a whistleblower who exposed a new fraud by a repeat offender, a market participant who provided crucial evidence, and an employee who reported violations after internal efforts failed. CFTC chairman Rostam Banham will participate in a fireside chat at the 2024 Treasury Market conference in New York City. Event is scheduled for Thursday, September 26, 2024, from 02:35 p.m. to 03:05 p.m. eastern time at the Federal Reserve bank of New York. CFTC Commissioners Carolyn D. Pham and summer Kay Mercinger will deliver a keynote fireside chat titled the Power of Dissent and the Future of Crypto Regulation at Dacom New York, 2024, the Digital Asset Compliance and Market Integrity Summit. The event will take place on Wednesday, September 25, 2024 at 02:00 p.m. eastern time at Hogan Lovells, 390 Madison Street, New York. New York Ice president of fixed income and data Services Chris Edmonds narrated a video on how access to data can provide an edge in fast moving markets. The video is excellent, though it could benefit from a bit of pancake makeup. My friend Chris and I both struggle with shiny forehead issues.
[00:04:02] Two of the three top daily losers among listed products yesterday were DJT and DJ TW, the stock and warrants for Trump Media and technology group Corp. According to Yahoo Finance, DJT was down 10.33% yesterday and down 30.57 year to date. DJ TW was down 16.81% yesterday and is down 78.48% year to date. European Central Bank Christine Lagarde spoke with John Stewart on the Daily show about the global economy, inflation and artificial intelligence. They discussed how the pandemic and Putin's invasion of Ukraine contributed to high inflation, the disparity between rising prices and stagnant wages, and the ideal of stable inflation. With the UN General assembly occurring, Lagarde emphasized the need for global AI governance to ensure it supports workers rather than replaces them. Here are excerpts from in front of Fows paywall from some recent stories at the Fow trading India 2024 conference, experts highlighted Indias vast domestic market as a significant opportunity for international exchanges. Meanwhile, Japans recent regulatory reforms in asset management are bolstering the case for broader derivatives use. According to Isdae, ING is aligning its UK contracts with the EUS new digital operational resilience rules. Globally, regulatory goals are converging, but approaches differ, particularly between the UK and EU.
[00:06:05] Additionally, the inaugural Durivia Intelligence Middle East 2024 conference, focusing on derivatives and structured products is set for November 20 in Dubai.
[00:06:20] Our most read stories from our previous edition of jail and options were Robinhood touts rock bottom fees for options trading. Then come the hidden costs from the Wall Street Journal. SEc approves Nasdaq to list options on iShare, bitcoin trust ETF from Bloomberg and I trading the US globally from Cboe subscribe to the free JlN Options newsletter with a link in today's JLN. Here are more stories from the first read section of today's JLN.
[00:06:54] Here's a message from JLN. La Salle street racing to move scout forward fundraiser on September 25 that's tomorrow the pathway to Adventure Council of the Boy Scouts of America is hosting the LaSalle street racing to move scouts forward event at the Chicago of Trade building. This annual tradition, dating back to 1971, brings together professionals from LaSalle street to support scouting in our community. The highlight of the evening will be a Pinewood derby race. You'll have the opportunity to build your own car or lease one at the event. It's a fantastic way to tap into your competitive spirit while enjoying cocktails and delicious food with colleagues and friends. Your participation will directly benefit scouting programs that help develop leadership skills and character in our youth. There are various sponsorship levels available to suit your preferences. The event will be held at series with plans to move outdoors if weather permits. It's a perfect opportunity to network, have fun and make a difference. You can register buy a ticket with a link in today's newsletter. Here's a story from Traders magazine. The headline the build versus buy dilemma why MSP's continue to gain ground in banking infrastructure by Alistair Watson, managing director, EMEA TNS Financial Markets as we near the end of the year, the longstanding debate of what to handle in house and what to outsource will reemerge in the financial services industry and specifically for banks. Many functions like it and staffing can be outsourced, but a key area worth considering is trading infrastructure. What was once a proprietary advantage for banks to build on their own now offers little competitive advantage and can often be more expensive to maintain. With the rise of cloud technologies and advancements in risk management services, has the time now come not to build, but to buy or partner with a proven managed service provider for banking infrastructure? My comment some debates never end.
[00:09:19] Put buy versus build in that category.
[00:09:24] Here's another story, this one from the Associated Press. The almost all small businesses are using a software tool that is enabled by AI. As the use of artificial intelligence expands, more small firms say they are harnessing AI to help their businesses. In a survey by the US Chamber of Commerce in Teneo, nearly every small business, 98% said they are utilizing a tool that is enabled by AI. 40% said theyre using generative AI like chatbots and image creation, nearly double from last year's survey. My comment Christine Lagarde said all businesses would be impacted by AI, so it's good to see the uptake by small businesses. Here's the top three stories from Monday's JLN our most clicked story Monday was celebrating independence and competition, a 4 July reflection, a commentary by John Lothian, that's me, from July, regarding the history of exchange competition in Chicago, including Cantor Fitzgerald. Second was a tie between US and Mexico braced for storms raging in Atlantic and Pacific. From BNN, Bloomberg and BGCs, Howard Lutnick takes on CME with interest rate futures debut from the Financial Times. Third was exchanges launched key derivatives on busy September 23 from fow here are the top three stories from the lead section of todays JLN. The first story is from Bloomberg. The headline Deutsche Bors and Nasdaq raided in EU cartel probe companies say they were targeted by EU antitrust inspection says theyre fully cooperative in probe EU announced Monday. Deutsche bors AG and Nasdaq said they were raided by European Union antitrust watchdogs who suspect the firms may have been involved in a cartel related to financial derivatives and Deutsche Bohr spokesperson confirmed that the company was hit by the EU's unannounced inspections on Monday and that it is fully cooperating with the probe. A Nasdaq spokesperson said that it is fully committed to cooperate with the EU and support the relevant authorities with the investigation.
[00:12:10] My comment there's another version of it as well. From the Financial Times here's another story, this one from the Wall Street Journal the headline Robinhood tests rock bottom fees for options trading then comes the hidden costs customers using platform faced higher transaction costs than those of other brokers, a study finds. This is what we referenced earlier. Robinhood Markets Advertises rock bottom fees for options trading, but a new study finds that its customers face hidden costs far higher than those of other brokers. The findings, released this month, offer a rare glimpse into the brokers transaction costs, the spreads between the price you pay when buying options and the price you get when selling them. While brokers disclose how much they charge in fees, they shed little light on the costs associated with such spreads.
[00:13:12] Here's another story, this one from the Financial Times. The headline Standard Charter takes investors to court in Liber transition test case legal battle over how uk based bank pays its dividend Standard Charter is taking legal action against several of its own investors, including a hedge fund run by De Shaw in what is seen by legal experts as a test case over the transition from the scandal ridden Libor interest rate. The legal battle, which is due to be heard in London's High Court of Justice this week, could set a precedent for other companies investor payouts.
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