Cantor Fitzgerald has started trading variance swaps and has hired Christophe Beguinot, previously a broker at The Link Asset & Securities Company, to man the new business line in London. Beguinot joined Cantor at the end of last year, according to Didier Bensadoun, global head of equity derivatives at Cantor in London.
Bensadoun said the swaps are aimed at banks looking to hedge in the inter-dealer market. "There's a demand for liquidity in this product," he noted. Variance swaps are popular with banks and hedge funds, but are not widely traded by institutional fund managers (DW, 5/2). Bensadoun said Cantor has not decided whether or not to offer the instruments to hedge funds at a later date. A broker at a rival house noted Cantor may find inter-dealer clients are put off trading with the U.S. firm if they feel it is competing with them for hedge fund business.
