RBI restricted American Express and Diners Club from adding new customers from May 1
The Reserve Bank of India (RBI) has restricted American Express and Diners Club International Ltd. from adding new domestic customers from May 1 for not complying with data storage rules. The central bank order won’t impact existing customers. The two companies have been found guilty of not complying with RBI’s directions on ‘Storage of Payment System Data’, according to the RBI.
American Express Banking Corp. and Diners Club International Ltd. are Payment System Operators authorised to operate card networks in the country under the Payment and Settlement Systems Act, 2007 (PSS Act). The RBI has taken the action under Section 17 of the PSS Act, a statement issued by the central bank said.
According to the terms of RBI’s circular on ‘Storage of Payment System Data’ dated April 6, 2018, all payment system providers were directed to ensure that within a period of six months the entire data (including full end-to-end transaction details, information collected, carried, processed as part of the message and payment instruction) relating to payment systems operated by them is stored in a system only in India.
They were also required to report compliance to RBI and submit a Board-approved System Audit Report (SAR) conducted by a CERT-In empanelled auditor within the timelines specified therein.
Here’s what we’re watching ahead of Friday’s opening bell.
U.S. stock futures edged up as investors assessed fresh data on how manufacturing and services world-wide are faring in the second quarter.
Futures tied to the S&P 500 ticked 0.2% higher, and Nasdaq-100 futures edged up 0.2%, pointing to muted gains in technology stocks after the open. Read our full market wrap.
What’s Coming Up
IHS Markit’s preliminary U.S. manufacturing index for April, due at 9:45 a.m. ET, is expected to rise to 60.5 from 59.1 at the end of March, and the services index is expected to rise to 61.0 from 60.4.
U.S. new home sales, due at 10 a.m., are expected to rise to an annual pace of 888,000 in March from 775,000 a month earlier.
shares shot 4.8% higher ahead of the bell. The social-media company’s daily active users reached 280 million, up strongly from a year earlier, though the social-media company posted another quarterly loss.
Copper’s price has soared roughly 90% over the last 12 months, with bulls pointing to robust demand from the world’s transition to green energy and speedy economic growth in China, which accounts for about half of global consumption.
—The Federal Reserve starts its two-day policy meeting. The International Monetary Fund releases its world economic outlook at 8 a.m. ET. The World Economic Forum’s virtual summit continues from Davos.
added 2.6% premarket. The aerospace and defense manufacturer reported earnings per share, ex-items, that was above estimates. It also said it has a $67.3 billion backlog for its defense division and that it plans to buy back at least $1.5 billion shares in 2021.
is rallying nearly 16% premarket. The videogame retailer’s shares surged to a record on Monday, rising more than 145% at one point, before plunging and seesawing back up again. The battle between day traders and short sellers appears to continue on.
The Global Cannabis Stock Index, which tracks U.S.-listed marijuana stocks, has climbed 35% since the start of this year.
Chart of the Day
Small-investor trading activity has stayed super hot in 2021, highlighting the opportunity for big banks to tap into a rare source of growth.
Investors are piling into bets that will profit if stocks continue their record run.
Options activity is continuing at a breakneck pace in January, building on 2020’s record volumes. It is the latest sign of optimism cresting through markets as individual and institutional investors pick up bullish options to profit from stock gains and abandon bearish wagers.
More than half a trillion dollars worth of options on individual stocks traded on Jan. 8 alone, the highest single-day level on record, according to
And bullish call-options trading surged to a high on Jan. 14, with about 32 million contracts changing hands, according to data provider Trade Alert.
A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data.
Options are contracts that give investors the right to buy (a call option) or sell (a put option) shares, at specific prices, later in time. They are typically used to bet on stocks’ direction or hedge portfolios. Although they can be risky to trade for amateur investors, activity has exploded in recent months. The interest has stemmed in part from investors looking to magnify gains in the stock market, since options allow them to put down a relatively small sum for the chance at an outsize return.
Many of these investors have flocked to online brokerages that have made it easier than ever to trade. Smaller options trades of just one contract—typically thought to stem from individual investors—recently made up almost a tenth of activity, up from 2% three years ago, according to Trade Alert data.
The robust trading comes as U.S. stocks have jumped to fresh highs. Earnings results have poured in over the past week, with companies such as
Investors have also looked ahead to the prospect of fresh stimulus that would help the struggling economic recovery. In January, stocks have built on their big, and perhaps unexpected, gains of 2020: The S&P 500 has gained 2.3%, setting four closing highs, after rallying 16% last year. The stock-market rally has also broadened, lifting laggard sectors like financials and energy.
Ben Austin, a 21-year-old student at Syracuse University, said he has increased his positions in stocks such as
in part because of the chance for more fiscal stimulus, which he thinks could boost spending.
“For the next couple months, I’m still kind of bullish on the market,” Mr. Austin said. “I think we’re going to see another giant stimulus package.”
He started trading options in November and primarily trades calls to position for big events that have the potential to lift stocks, shying away from put options. He acknowledges that options can be riskier than stocks but relishes trading.
“There’s somewhat of a thrill to the more risk aspect of it,” Mr. Austin said. “There’s way more potential for higher gains in a shorter amount of time.”
As stocks have continued their ascent and bullish positions have flourished, many have ditched bearish bets on the market.
Short interest in one of the biggest exchange-traded funds tied to the S&P 500 recently hit the lowest level since March 2020, according to data from IHS Markit. Investors that short shares typically borrow stocks and sell them, in the hopes of buying them back later at a lower price before returning them to the lender. These positions profit when stocks tumble. And bearish put options outstanding tied to the gauge recently fell to the lowest level in at least four years, Trade Alert data show.
‘This is the most popular I’ve seen call buying in my career.’ ”
— Jon Cherry of Northern Trust Capital Markets
“This is the most popular I’ve seen call buying in my career,” said
global head of options at Northern Trust Capital Markets, who has been in the industry for more than two decades. “Where I think that is really driving from is kind of the melt-up that we’ve seen in broader markets.”
Mr. Cherry said he has noticed interest in bullish positions as well as a desire to sell bearish options to juice income. Investors don’t want to miss out on any potential stock-market gains to come and want to stay in positions that will profit if stocks keep soaring, he said.
Hayden Cole, 22, a student at the College of the Canyons in California, waded into stocks and options after he lost his job during the coronavirus pandemic. He started chatting with his father about the stock market.
“He told me the stock market always recovers. It’ll always go back up,” Mr. Cole said.
JPMorgan Chase & Co. analysts said in a Jan. 8 note that call-option buying was prominent among individual investors, based on an analysis of trading activity made up of fewer than 10 options contracts. This call buying could lead to a rise in volatility, driven by options hedging, they said.
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And at times, overwhelming momentum in individual stocks such as
has coincided with a surge in options activity. As the stock skyrocketed 51% on Friday, options activity tied to the company jumped to the highest level ever.
Options traders appear to be positioning for bigger gains for some of the sector’s star performers ahead of their earnings reports this week. An options measure called skew, which measures the cost of bullish options relative to bearish ones, is near the lowest levels of the past year on stocks such as Apple, Advanced Micro Devices and Facebook, Trade Alert data show.
“People are always looking in the rearview mirror,” said
chief adviser for research at Cboe Vest, which oversees options-based strategies. “They’re looking at the returns that had been achieved if they bought a call option on a stock six months ago.