045 Exchange Invest Weekly Podcast

Transcript   Names mooted as the new CEO for the FCA. Moscow Exchange facing a class action suit from big names and traders alike. Interactive brokers expands its loss provisions on WTI. I was thinking. Australia, it may be the land of the free but maybe not free markets. Elsewhere, there's a big private market merger and much much more as the BIS is wobbling between Banks or CCPs. They clearly do the I but is it B before S?    Welcome to the bourse business weekly digest. It's me, Patrick L Young, bringing you the Exchange Invest Weekly Podcast   This was the week where 38 seconds was all it took to close the Colombo exchange. After 51 days closed the Sri Lankan market reopened only to hit its 10% limit down in just over half a minute, closing the market for the rest of the day.    Indeed, it was an edifying week for those who reopened, Jordan finally made it through. That came a week after Palestine. The Nepal Stock Exchange saw steep losses after 50 days of being closed. And ultimately, we ended up with only the Bangladesh bourse being in splendid isolation without any trading sessions to go on: this 50 plus days after the crash of early 2020, driven by COVID-19.    In other matters driven in some way, shape or form by COVID-19, we of course have the Cushing crisis. All traders are shunning West Texas Intermediate, Reuters told us as they worry about delivery issues. That said the oil business still seems to be thinking “inside the box” or I suppose one might say “inside the barrel.” Likewise, there was the same problem this week with the CFTC. The American regulator. Certainly it seems bizarre that a valid front month for oil trading appears to be somewhere in mid summer, despite the fact we're only in late spring. That happens in yield curves on occasion, but for a deliverable commodity that would smack of the market for some reason not being orderly. Again, one wonders why the CFTC are so keen to point out that oil prices could go negative once again. Well, not actually managing to do a great deal so far, at least in public or coherently wondering about whether it's not the contract that itself is deeply flawed.    QV the super smooth settlement of Brent crude only a week ago. Licking their wounds is interactive brokers. It was a tale of woe this week: a man who started his day trading account with $77,000 and ended up owing IBKR over 9 million. That story was discussed in multiple angles, but at the same time, it does raise questions: Who in their right mind with $77,000 in their account as a day trader thinks that it was sensible to have 250 contracts of anything? Nevertheless, IBKRmoving their loss provision up from $88 million to 104 million dollars has repercussions as clearly as well ramifications strike me as follows. Complex markets take days to resolve technology shifts of which adding negative pricing to oil clearly as one which requires more than five days of notice. While brokers ought to have pointed this out, we await details of what communication trail there may been with the CME.   Of course there can be no argument the highly professional CME IT team which surely themselves appreciate that changing prices in any way has consequences and take time to effect. In this case, a classic butterfly flapping chaos binary took place, just allowing it to go negative ended up with a veritable tsunami when it came to actually pricing trading Cushing, WTI. I know that raises the same age old question. if my memory serves me correctly, regulators including the CFTC, and the politicians who oversee the commission seek to have orderly markets which enable risk transfer speculation arbitrage at all. That ought to create a balancing price discovery mechanism. It remains difficult to justify how this sequence of WTI events involved an orderly m...