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Whale’s Resurfacing Shows Options Market a Source of Turbulence

Whale’s Resurfacing Shows Options Market a Source of Turbulence

(Bloomberg) — Traders piling back into megacap technology shares need to keep an eye on the options market, where still-elevated activity sets the stage for heightened stock volatility.

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While the frenetic pace of speculation in derivatives has eased a bit recently, it hasn’t stopped, and a chorus of analysts warns the trading remains capable of exacerbating swings. Monday brought the biggest rally for the Nasdaq 100 Index since April, with options-derived measures of volatility climbing in tandem.

One proxy for the froth still latent in equity derivatives, the percentage of overall volume represented by single-stock contracts, remains up 19% from a year ago, according to JPMorgan Chase & Co. Most of it is concentrated in megacap technology and momentum-driven shares.

Meanwhile, a large buyer of tech calls dubbed the Nasdaq whale recently resurfaced, purchasing around $200 million worth of call contracts on tech stocks in a single day. The Nasdaq 100 Index has gained in all but two sessions this month and just notched its best week since July after last month’s sharp drop. It’s up 3.3% as of 12:55 p.m. in New York on Monday.

The situation is another thing for traders to worry about in whipsawing markets where liquidity remains thin. Trading in options showed itself capable of influencing share movement in August and September, when dealer hedging — demand from people who sell options for the underlying stock — created feedback loops that helped drive the Nasdaq 100 higher. That dynamic can also add fuel to downside moves as well as sellers adjust positions.

“This low liquidity environment lays the groundwork for dealer positioning (i.e., gamma imbalances) that can further exacerbate existing market trends,” wrote JPMorgan analysts including Shawn Quigg in a note Tuesday. “Exceptionally large trades in thin markets, especially in sectors (e.g., technology)

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U.S. expected to impose new sanctions on Iran’s financial sector: source

U.S. expected to impose new sanctions on Iran’s financial sector: source



a person wearing a costume: FILE PHOTO: A staff member removes the Iranian flag from the stage after a group picture with foreign ministers and representatives during the Iran nuclear talks at the Vienna International Center in Vienna


© Reuters/Carlos Barria
FILE PHOTO: A staff member removes the Iranian flag from the stage after a group picture with foreign ministers and representatives during the Iran nuclear talks at the Vienna International Center in Vienna

By Humeyra Pamuk

WASHINGTON (Reuters) – The United States is preparing to impose fresh sanctions on Iran’s financial industry as soon as Thursday, a Republican congressional aide briefed on the matter said, as Washington ramps up pressure on Tehran weeks ahead of a key U.S. election.

The move, which would effectively shut Iran out of the global financial sector, comes after the United States last month said it triggered a “snap back,” or resumption, of virtually all U.N. sanctions on Iran, an assertion rejected by key European allies and most U.N. Security Council members including Russia and China.

The Washington Post first reported on the U.S. plan.

Tensions between Washington and Tehran have soared since U.S. President Donald Trump unilaterally withdrew in 2018 from the Iran nuclear deal struck by his predecessor and began reimposing sanctions that had been eased under the accord.

U.S. sanctions have crippled the Iranian economy. President Hassan Rouhani in June said his country was experiencing the toughest year because of U.S. economic pressure and the coronavirus pandemic which has hit the Islamic Republic hard.

Iran hawks inside and outside the Trump administration have been pushing for the targeting of Iran’s entire financial sector for some time.

Iran’s oil exports, a key source of revenue for the OPEC member, have dropped to their lowest levels in decades earlier this year, but Thursday’s move, experts have said, could hit the Islamic Republic’s ability to secure humanitarian goods such as medicine.

The U.S. sanctions Trump has reimposed target everything from oil sales to shipping and financial activities, and while they exempt food,

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U.S. expected to impose new sanctions on Iran’s financial sector – source

U.S. expected to impose new sanctions on Iran’s financial sector – source

WASHINGTON (Reuters) – The United States is preparing to impose fresh sanctions on Iran’s financial industry as soon as Thursday, a Republican congressional aide briefed on the matter said, as Washington ramps up pressure on Tehran weeks ahead of a key U.S. election.

The move, which would effectively shut Iran out of the global financial sector, comes after the United States last month said it triggered a “snap back,” or resumption, of virtually all U.N. sanctions on Iran, an assertion rejected by key European allies and most U.N. Security Council members including Russia and China.

The Washington Post first reported on the U.S. plan.

Tensions between Washington and Tehran have soared since U.S. President Donald Trump unilaterally withdrew in 2018 from the Iran nuclear deal struck by his predecessor and began reimposing sanctions that had been eased under the accord.

U.S. sanctions have crippled the Iranian economy. President Hassan Rouhani in June said his country was experiencing the toughest year because of U.S. economic pressure and the coronavirus pandemic which has hit the Islamic Republic hard.

Iran hawks inside and outside the Trump administration have been pushing for the targeting of Iran’s entire financial sector for some time.

Iran’s oil exports, a key source of revenue for the OPEC member, have dropped to their lowest levels in decades earlier this year, but Thursday’s move, experts have said, could hit the Islamic Republic’s ability to secure humanitarian goods such as medicine.

The U.S. sanctions Trump has reimposed target everything from oil sales to shipping and financial activities, and while they exempt food, medicine and other humanitarian supplies, many foreign banks are already deterred from doing business with the Islamic Republic – including humanitarian deals.

Reporting by Humeyra Pamuk; Editing by Michael Perry

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