Deutsche Bank plans to start marketing correlation-linked and volatility products to private wealth management customers. "The launch of the volatility product is imminent," said Stephen Birkwood, v.p. in the structured investment products group at Deutsche Bank in London. The correlation product is still in the early development stages, but the bank has started talking to clients.
The move comes hot on the heels of Merrill Lynch, which issued a volatility warrant on the VDAX index earlier in the year and UBS, which issued two certificates in February (DW, 3/07). Birkwood said the Deutsche Bank volatility product would also reference the VDAX index. Birkwood thinks the certificate could work as both a hedging tool, insuring against volatility change in the case of a terror attack, and an investment product.
