Forefront Communications

Forefront Week in Review: October 28, 2018

Sam Belden

Sam Belden

Welcome to the Forefront Week in Review, where we take another look at top recent stories from the action-packed world of trading and market structure.

On Wednesday, we saw a historically bad performance from stock-picking hedge funds — according to a report from Goldman Sachs, a large group of “fundamental long-short equity hedge funds” dropped 1.44%, making for the deepest one-day drop since it began tracking the data in 2012. The dismal day brought the funds’ returns to minus-6.21% for the year.

Other top stories included the SEC’s reluctance to release a two-year-old speed bump study, Refinitiv’s tentative plans to sell its IFR financial media unit, and the decided lack of enthusiasm surrounding bitcoin futures.

This week’s Week in Review features stories by Rachael Levy of the Wall Street Journal, Trista Kelley of Business Insider and John D’Antona of Traders Magazine, among others. Keep scrolling for more, and don’t forget to subscribe to the Forefront Trading Digest if you’re not on our list already.

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Broker News

A $100 Million Trade Shows How Credit Suisse Is Competing in a Cutthroat Race to Snag the Biggest Stock Trades
Business Insider| Trista Kelley

Credit Suisse in the past 12 months has introduced a so-called central risk book, a desk in which technology pools risk across dozens of traders so it can be better managed. The new CRB, rolled out this year in Europe after debuting last year in the US, is another sign the Swiss bank has growing ambitions and is increasing the amount of risk it’s taking in equities trading. One notable trade on the European risk book this year was above $100 million, a person familiar with the trade said. While a $100 million trade is a large amount for a single transaction at any bank, at Credit Suisse it was especially so.

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Exchange, ATS and Clearing News

CEO CHAT: Don Ross, PDQ Enterprises
Traders Magazine | John D’Antona

Traders Magazine recently caught up withDon Ross, CEO of PDQ Enterprises LLC, the parent company of CODA Markets Inc. Ross is an experienced thought leader in equities market structure and electronic trading, with a strong managerial background in the development and use of innovative trading strategies and software. In the interview, Ross shared with Traders Magazine Editor John D’Antona Jr. his pedigree, how he came to run an ATS, how it operates and what the future holds in off board trading.

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Vendor News

Profile: Mazy Dar & Adam Toms: OpenFin
Best Execution | Staff

Read along as two senior executives at OpenFin, Mazy Dar (CEO) and Adam Toms (CEO Europe), chat with Best Execution about the genesis of their firm, the problems it solves and the industry’s post-MiFID II future.

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Buy Side News

Goldman: Wednesday Was One of the Worst Days in Years for Stock-Picking Hedge Funds
Wall Street Journal | Rachael Levy

On Wednesday, a large group of hedge funds that bet for and against stocks had their worst day in almost seven years, according to a report released Thursday from Goldman Sachs. The so-called fundamental long-short equity hedge funds tracked by Goldman dropped 1.44% on Wednesday, according to the client report, which was reviewed by The Wall Street Journal. Goldman said it was the deepest one-day drop since the bank began tracking the data in January 2012. These funds are down 8.68% this month through Wednesday, bringing returns to minus-6.21% for the year, the report said.

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M&A/Investment News

Refinitiv Is Exploring Sale of IFR Financial-Media Unit
Bloomberg News | Luca Casiraghi, Dinesh NairLaura Benitez

Refinitiv, the financial data and risk company that changed hands this month in a $17 billion deal, is exploring the sale of its IFR media business, according to people with knowledge of the matter. Refinitiv has already been in touch with some potential buyers for the business that’s also known as International Financing Review, the people said, declining to be identified as the discussions are confidential. Publisher Euromoney Institutional Investor Plc and ratings company Moody’s Corp. may be among the potential suitors, they said.

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Regulatory & Legal News

SEC Won’t Release ‘Speed Bump’ Study It Promised Two Years Ago
Wall Street Journal | Cezary Podkul

The SEC won’t release a study of the impact of brief delays in stock trading on market quality and pricing that investors have been expecting for two years. The SEC committed in June 2016 to complete the study when it reinterpreted one of its rules to allow so-called “speed bumps” that briefly pause trades before relaying them to exchanges for execution. The move allowed IEX Group to become the first exchange to offer a trading venue that slows the speed of trading. A spokesman for the SEC declined to share any of the study’s findings and said the agency has no “immediate plans to release it to the public” because it deems the report internal.

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Blockchain & Crypto News

Anybody Want Bitcoin Futures? Anybody?
Bloomberg News | Lily Katz & Nick Baker

Ten months after their launch, some of the hopes for Bitcoin futures look more like pipe dreams. Cboe and CME combined traded about 9,000 contracts a day in the third quarter. “It has not been what you would call a roaring success,” says Craig Pirrong, a finance professor at the University of Houston and an expert on futures trading. “Institutional players have stayed on the Bitcoin sidelines, and as long as they are, the futures contracts are likely not to generate substantial amounts of volume.”

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That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.