Fintech Focus For December 11, 2020

Quote To Start The Day: US President Donald Trump and his backers, having been stymied dozens of times by judges and elections officials across the country, are confident one last-ditch lawsuit will overturn his election loss.

“All I ask for is people with wisdom and with courage, that’s all,” Trump said at a White House Hanukkah party on Wednesday night, according to a video posted to Twitter. “Because if certain very important people, if they have wisdom and if they have courage, we’re going to win this election in a landslide.”

Source: Al Jazeera

One Big Thing In Fintech: Pyctor, a collaborative effort involving ING, ABN AMRO, BNP Paribas Securities Services, Citibank, Invesco, Societe Generale, State Street, UBS and others, is designed to make banks feel comfortable handling crypto. The project involves layers of security such as multi-party computation (MPC) and hardware security module (HSM) technology, and is also decentralized.

Source: Coindesk

Other Key Fintech Developments:

• Sterling Trading Tech enhances tech.
• Azimo, dLocal team on remittances.
• daVinci Payments completes merger.
• LCH SA starts clearing for Oslo Børs.
• Next Insurance bought Juniper Labs.
• Brits really wary of trusting neobanks.
• JPM’s Dimon looks to new innovation.
• BoA launches cross-border paytech.
• BestEx Research closed out Series A.
• TD invests in data services, analytics.
• Capital launches freemium analytics.
• Curv, ConsenSys to launch DeFi tech.
• BitPay wants to create national bank.
• Zelis launches digital payments tech.
• Stripe is plotting an Asian expansion.
• Verizon is offering Clover from Fiserv.

Watch Out For This: While traditionally a tool that fund managers have used to hedge their portfolios, it now appears options are being used more for speculative bets on the price of the underlying shares by retail investors. A surge in trading of small lots of options this year has been linked to the growing number of individuals who got involved in the market amid the Covid-19 lockdowns.

The fact that most of the small lot call options being bought have a shorter duration supports the view that retail traders are now playing a more significant role in the options market, according to Oppenheimer’s head of institutional equity derivatives, Alon Rosin.

This speculation continues to help propel stocks. When there is a spike in buying of call options, it creates incremental demand for shares from the options dealers who move to hedge their positions by buying shares of the underlying stocks. Known as gamma hedging, that strategy can create a sort of feedback loop that was on display in August, when it helped drive a 10% rally in the Nasdaq 100 as demand for calls on megacap technology stocks prompted dealers to increase their stock positions in an attempt to offset the rising options prices.

Source: Bloomberg

Interesting Reads:

• NASA, Boeing do-over Starliner test.
• 8 industries being disrupted by Musk.
• Singapore could get flying taxis soon.
• Chick-fil-A sues on antitrust violations.
• Will US cities be ready for a vaccine?
• Google acquires Dataform UK startup.
• 10 ways you can use text messaging.
• Venture investors look to AI for deals.
• Biden’s USDA lead sparks backlash.
• US renters to owe $70B by January.
• Your next car will probably be electric.
• A serious nuclear incident in Finland.
• Nvidia rivals with data storage vendor.
• Employees facing burnout amid virus.

Market Moving Headline: The number of Americans filing for first-time unemployment benefits with states jumped to 853,000 last week – marking a 137,000 increase from the previous week’s reading, the United States Department of Labor said on Thursday.

Source: Al Jazeera