May 2nd 2013

elb2Fascinating to see UK venture capital titan becoming chairman of that fascinating minnow, CISX while IB disappointed with their latest numbers.

However a real technology issue to ponder is that CME ‘loophole’ …the HFT debates heats up once more.

Here are today stories:

Public Markets

IntercontinentalExchange Reports 1Q 13

IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, reported financial results for the first quarter of 2013.

Consolidated revenues were $352 million, a decline of 4% from the first quarter of 2012.

Consolidated net income attributable to ICE was $135 million, down 8% from the first quarter of 2012, and diluted earnings per share (EPS) decreased 8% to $1.85 on a GAAP basis.

Ahead of the Futures? High-Speed Traders Reportedly Capitalize on CME Loophole

Fox Business

High-frequency trading firms are reportedly exploiting a hidden loophole at the Chicago Mercantile Exchange to gain a crucial head start against other traders in the futures market.

According to The Wall Street Journal, high-frequency traders are attempting to capitalize on an ability to discover when their own trades for commodities are executed before the rest of the market is able to see the trades.

While the data advantage may only consist of one to 10 milliseconds, that is enough for these speedy traders to profit on the information, the Journal reported.

CME delays exploited by high-speed traders

Chicago Tribune

In response to a Wall Street Journal report saying high-speed traders on the Chicago Mercantile Exchange are exploiting a 1 to 10 millisecond advantage over other investors, CME downplayed the discrepancies but noted it was attempting to eliminate them.

Press Release here

LSE revised offer for LCH.Clearnet declared wholly unconditional

Finextra

LCH.Clearnet Group Limited (“LCH.Clearnet”) and London Stock Exchange Group plc (“LSEG”) today announce that the Revised Offer is wholly unconditional and will complete today.

CBOE says trading fell 6 pct in April, lagging rivals

Reuters

CBOE Holdings Inc said trading on its flagship Chicago Board Options Exchange fell in April, as the oldest U.S options exchange gave up market share to rivals.

Trading at CBOE fell 6 percent to a daily average of 4.01 million contracts, the Chicago-based company said in a statement on Wednesday.

A software bug prevented CBOE from opening for half the day last Thursday. But the decline was bigger than could be blamed on businesslost on that single day.

CBOE Holdings Declares Second Quarter 2013 Dividend

Wall Street Journal

CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that its Board of Directors has declared a quarterly cash dividend of $0.15 per share of common stock payable on June 21, 2013, to stockholders of record at the close of business on May 31, 2013.

NYSE’s Niederauer says fast markets create risks

MarketWatch

Responding to concerns about the recent rise of technical glitches and botched initial public offerings, NYSE Euronext CEO Duncan Niederauer said Wednesday that market participants will be hearing more and more about operational risks at exchanges and in other venues in today’s high-tech, fast-paced markets.

Cairo and Istanbul stock exchanges complete final steps of merger

Al-Shorfa

The Egyptian and Turkish stock exchanges are poised to merge soon, according to Mohammed Omran, chairman of the Egyptian Stock Exchange.

Omran said during a press conference on Monday (April 29th) he expects Egyptian investors will be able to begin trading in the Turkish bourse and vice versa by September, adding that this step is the result of a memorandum of understanding signed between the two parties in June 2012.

The linkage aims to promote and revitalise both stock markets and facilitate an exchange of expertise, a step Egyptian experts view as a way to bolster the Egyptian financial market.

Private Markets

Interactive Brokers First Quarter Earnings Down Sharply

StockBrokers.com

Interactive Brokers (IBKR) reported earnings Tuesday after the close that were down sharply from a year ago. The online broker brought in revenue of $216 million, which was 30 percent lower than last year’s revenue of $304 million. Net income dropped 41 percent to a level of $6.6 million, or 14 cents per share. Analysts had expected revenue of $244 million and earnings per share of 13 cents from Interactive Brokers. Clearly, it was a big miss on the revenue number, but the online broker managed to beat by a penny on the bottom line.

Intrade avoids insolvency as deal struck with customers

Independent.ie

INTRADE, the betting website that halted trading in March amid a probe into suspected financial irregularities, said it reached forebearance accords with enough members to remain solvent.

Dublin-based Intrade told customers last month it found a $700,000 shortfall in client funds as it sought their backing for a survival plan.

Knight Capital Reports a Loss Amid Trading Slowdown, Asset Sale

Businessweek

The net loss was $9.4 million, or 3 cents a share, in the first quarter, compared with a profit of $33.1 million, or 36 cents a share, a year earlier, the Jersey City, New Jersey-based company said today. Excluding losses from discontinued operations and expenses related to the takeover, the August trading error and a reduction in workforce, earnings were 6 cents a share. That exceeded (KCG) the 4-cent average analyst estimate, data compiled by Bloomberg show.

Appointments

Jon Moulton appointed CISX chairman

HedgeWeek

The board of the Channel Islands Stock Exchange (CISX) has appointed Jon Moulton as director and chairman. He takes over from interim chairman Graham Hall, who remains on the board and will temporarily assist to ensure an effective handover.

Crowdfunding

Crowdfunding gives rise to projects truly in public domain – USA Today

USA TODAY

Pooling money for a cause online gets a new spin as small donors help lay the foundation for major municipal innovations, galvanizing communities.
When money for the Statue of Liberty’s pedestal ran short, publisher Joseph Pulitzer launched a call for donations in his New York newspaper and raised more than $100,000 in six months. About 125,000 people contributed $1 or less.

That was 1884.

When three 20-somethings came up with “+Pool” — the creation of community swimming pools that float in New York’s polluted East River and are filled with filtered river water — they put their plea out on a website and raised more than $41,000 within a week.

That was three years ago.

Careers Clinic: Crowdfunding – fund your entrepreneurial dreams while at university

ComputerWeekly

With unemployment rising, uncertainty and increasing university fees; we find a generation now caught up in a “financial time warp” as they still find it increasingly difficult to access credit from lenders. The concept of charity has led to the creation of an innovative business model called crowdfunding now popular amongst young entrepreneurs.

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