Dropbox announced a convertible note offering a few days ago. Overall number is $1.135 Billion. 

Latest Q4 2020 results were solid earnings per share rose 75.00% year over year to $0.28, which beat the estimate of $0.24. Revenue of $504,100,000 up by 13.03% year over year, which beat the estimate of $498,640,000.

So maybe their intention is to follow Microstrategy and use the proceeds to buy bitcoin? They suffered from the recent tech sell off, but price action seemed steady before

Short term IV is around 55% ATM, nearly same as long term. Also very interesting smile for the March/Apr contracts, so you can think about selling puts and buying some calls. However, given that this is likely correlated to Bitcoin, you are taking a double bet here that cryptocurrencies will perform strongly and also  the Tech selloff will not continue. 

If you like this as a long term idea, you can buy the DBX US 01/21/22 C30. Having still 328d until expiration costs you 2.60 and is slightly cheaper at IV 53.9. 

Alternatively you can consider getting more bang for the buck (gamma!) and try the DBX 4/16/21 C22 ATM at 2.34. However, if you believe the sell off is not over yet, how about adding DBX US 04/16/21 P20 to it and making it a strangle.The put is priced at $0.80.

I clearly haven't thought this all through. It's more that I'm looking to exchange some ideas/thoughts about this one. Options are definitely not super cheap at this vol, so I was hoping to find a short term gamma bomb that I might play... 

@Weston Nakamura Any thougths on this? 

While ICE is in an upward trend, it might make sense to hedge for potential fallout from trading losses due to the spike in energy prices

"After the market closed Friday, stunned traders scrambled to work out how much additional funds they would need to set aside for the following week. Some trading houses were extremely nervous. An executive at one said he was worried that some counterparties could go bust and leave his firm with positions to fill on the spot market."

Source

Energy Only Revenues to ERCOT Generators in 2021 YTD exceed all revenues 2018-2020 combined. So who's paying for that? In addition, this also concerns Natural Gas as well
Maybe some counterparties will get into trouble...

And yes, ICE has a large clearinghouse and owns multiple exchanges. Still, remember the trader that blew a €100m hole in Nasdaq nordic power market. Ok, the guy was clearing his own trades, so that might not have happened with clearing houses in between.

https://www.ft.com/content/43c74e02-b749-11e8-bbc3-ccd7de085ffe

Anyway, OOM puts are still cheap. 1 month 5% OTM skew is only +2.5 vol for puts over calls (IV 26.6 vs 24.1). So I will consider getting into 19 March expiry, Strike 105. Alternatively buy 105-100 Put spread for March at 40 cents premium, 5 max payout (buy the 105 strike at 28.5 vols, sell the 100 strike at 32.2 vols). The put spread seems pretty stable at costing 40cents a month historically.

As always, this is only a trade idea, no investment adivce. You have to do your own research before implementing any trade.

As desribe in our 2Q Focus for February, I'm long specific German exchanges and market makers that are listed on Xetra. These exchanges are getting a large proportion of the retail order flow of the German equivalents to Robinhood. Two examples I also mentioned in the report are Baader Bank (a bankd and market maker at Gettex exchange in Munich) and Lang & Schwarz (market maker at LS Exchange, the electronic trading platform of Hamburg exchange).

Both companies are closely connected to neo brokers Scalable Capital (Baader) and TradeRepublic (Lang&Schwarz). Thus I expect them to further benefit from the trend in retail trading. (Disclosure: I worked at Scalable Capital before). They already had a good run but came back a bit recently despite ad-hocs that state record breaking trade volumes in January.

I extracted latest numbers on trade volume (in €) from data they have to publish in accordance with Mifid II regulations (L&S is lagging...apparently someone is not taking regulatory requirements very serious). 2020 has definitely been extraordinary and 2021 is record breaking. From what I see from Gettex, where the data is up to date, the trend has weakend a bit after GME but is far from over. Trading is still going strong. I don't won't to publish data on spreads yet before I'm 100% sure what I see in the reports is really true. But let's just put it this way...best execution probably depends on the perspective. In the report I also put some numbers from the L&S balance sheet and they were quite convincing.

Trade duration:

At least until end of Q1 2021 but probably longer. I'm monitoring the trading trend closely as my personal opinion is that it will keep on being strong. Germany keeps being in lockdown until at least March, people are bored and will keep trading. We were already told that vacationing on easter (end of April) is probably not possible, so what do you think people will do?

Risks:

Liquidity is not super large in these stocks, that's why I spread my bets among other exchanges and connected companies that showed strong performance, too (Sino AG, Berliner Effektengesellschaft, Tradegate AG etc.)

Return target:

I started the trade a second "tranche" of the trade including more companies in Jan 2021. This selection is currently up +30% (I'm tracking it here). I have no specific target but a trailing stop on all of my positions. For sizing I usually use an ATR based method similar to the one on our blog so that I'm not risking more than 1-2% of my portfolio on each trade.

This is only a trade idea, no investment advice of any kind. You have to conduct your own research before entering any trade.

• DIRECTION & SECURITY: Long synthetic CSI 300 ETF, e.g. Xtrackers CSI300 Swap UCITS ETF, Short physical CSI 300 ETF, eg. L&G E Fund MSCI China A UCITS ETF
• HOLDING DURATION: multi-year, until demand for shorting physical A-shares decreases
• EXPECTED RETURN: Judging from history, 3-7% p.a., rather a bit more as spread has widened over the last years.
• MAX RISK: Counterparty risk on the synthetic leg
• Brief thesis: Synthetic ETFs on China A shares (e.g. CSI 300) show a yield pickup vs. physical ones. China has restrictions on shorting stocks, hence counterparties are interested in gaining short exposure by selling a swap on A Shares. Same yield pickup is visible if you own physical A shares.
• Potential problem: Short leg not possible. I didn't find any physical CSI 300 ETF in Europe which was shortable. Maybe you are more lucky in other regions.
  
  
  Screenshot showing hypothetical payoff. This is only an idea, not investment advice. You must do your own research before going anywhere near trading.