Fintech Focus For July 14, 2021

Quote To Start The Day: “Effective leadership is putting first things first. Effective management is discipline, carrying it out.”

Source: Stephen Covey

One Big Thing In Fintech: Banks want the Federal Reserve to create tough standards for evaluating whether fintech firms with narrow-purpose banking charters should be given access to the payments system and other central bank services.

Source: American Banker

Other Key Fintech Developments:

• Citi debuted no-fee stock trading.
• Marco Financial adds $82M seed.
• AI influence on fintech innovation.
• Tiffin adds Cathie Wood to board.
• Chime taps lawyers ahead of IPO.
• LendingHome hires new leaders.
• Round lot reform can reduce cost.
• Marqeta, Payfare add partnership.
• Gupshup added a bill-pay service.
• Prove, Binance sign agreements.
• Warburg led Quantexa fundraise.
• BBVA debuts biometric card tech.
• BNP closes on Exane acquisition.
• Capital Group buys MSTR stake.
• MX launches a new insights API.
• Augmentum, Tikehau eye growth.
• HelloFlow raises a funding round.
• Brazil’s B3, Totvs add agreement.
• Novus planning launch of an app.
• Melio hires JPM Chase executive.
• Grayscale taps BNY for BTC ETF.
• DTCC teams Ebix on compliance.
• UK police seize $250M in cryptos.
• Apple, Goldman partner on BNPL.
• Quantexa adds $153M for AI tech.

Watch Out For This: The U.S. government is drawing on the expertise of Jeff Bezos’s Blue Origin space venture, General Electric Hitachi Nuclear Energy and other companies to develop nuclear-powered spacecraft that can travel faster and farther -- to Mars and beyond.

Source: Bloomberg

Interesting Reads:

• WebOps Pantheon raises $100M.
• Warner Bros, Nifty’s launch NFTs.
• Earnings spotlight on loan growth.
• Lumber wipes out gain; transitory?
• Startup funding to not slow down.
• Funding to black founders grows.
• Goldman raises pay close to 50%.

Market Moving Headline: The correlation of stock moves, versus option activity, has become more pronounced over the past few years, and even more so after the pandemic sell-off.

This comes as the demand for options is transmitted to underlying stocks via the risk management of market makers who, during outlier events, are short so-called gamma or convexity, the sensitivity of an options risk to the direction, given underlying price changes.

With option volumes now comparable to stock volumes, related hedging flows can represent an increased share of volume in underlying stocks.

The reflexive response by the opposing side of options trades — a result of regulatory frameworks, the low-interest-rate environment, as well as growth of the derivatives complex — causes a cascading reaction that exacerbates underlying price movements.

In a move to understand who is capitalizing on the aforementioned volatility dislocations, as well as how, Benzinga spoke with Kris Sidial, a former institutional trader and the co-chief investment officer of the Ambrus Group, a volatility arbitrage fund that looks to exploit changing market structure dynamics.

Source: Benzinga