Equity Derivatives House Of The Year

Credit Suisse Credit Suisse has attracted attention this year for its equity trading effort, particularly from hedge funds, which report that the firm has beefed up its offering of exotic equity instruments. Lead by co-head of the European equities department Simon Yates in London, portfolio managers said the firm can be relied upon to quickly price and execute complex trades and is at the forefront of structuring new instruments designed to trade equity skew. Among other structures, for example, Credit Suisse has created a trade that it refers to as geometric variance dispersion, which avoids illiquidity and other problems associated with traditional dispersion trading.

 

Deutsche Bank The German bank is cited by traditional asset managers and hedge funds alike for the scale and depth of its flow equity derivatives business. Tim Hart, London-based head of sales, and his team have a global reach that other houses can't match, according to asset managers trading across continents. Hedge funds also noted the quality of the bank's research and its strategists' trading ideas.

 

Goldman Sachs

Although the U.S. house likes to keep itself to itself, hedge funds globally report that it is among the top firms for exotic equity derivatives, particularly when it comes to pricing variance swaps and other volatility trading instruments. This year, the firm has stood out because it was able to offer attractive pricing for exotics while other firms, hit by balance sheet restrictions, pulled back from the business. Heading up the firm's key U.S. equity derivatives desk is Paul Russo, with Peter Selman head of U.S. equity derivatives trading. Insurance companies in the U.S. also like the firm's bespoke equity structured notes, an area the firm has been growing this year.

 

JPMorgan

JPMorgan has improved its exotics pricing this year, according to hedge funds. Portfolio managers said the firm is increasingly looking to recycle risk accumulated from its structured retail business and this has driven it to offer attractive correlation and volatility trading instruments to hedge funds. Under David Herzberg, global head of equity derivatives, the firm has been aggressively pushing hedge fund sales and reasserting its edge in exotics pricing and risk management.

 
SG Corporate & Investment Banking

The French house is credited with introducing a novel instrument for trading equity kurtosis this year, which won it accolades from sophisticated hedge fund managers. The firm held on to its strong reputation for pricing exotics and for equity derivatives innovation. In addition, while other firms pulled back from hedge fund business, David Escoffier's global hedge fund group has consistently provided clients with new volatility instruments and trading ideas.