Derivatives - All Articles

  • ESMA rejects EC exemption for intragroup derivatives

    The European Securities and Markets Authority has raised concerns over the European Commission’s proposal for a three year exemption from clearing and collateral responsibilities for firms making intragroup interest rate derivatives transactions with third country entities, because such entities are not yet deemed to have regimes equivalent to the European Market Infrastructure Regulation.

    • 30 Jan 2015
  • TABB Forum: All eyes on MAC swaps

    Volumes in market adjusted coupon swap trading are increasing due to margin efficiencies, increased liquidity and the ease of trading, according to speakers at the TABB Forum Fixed Income 2015 conference in New York on Thursday.

    • 30 Jan 2015
  • Electronic trading move won’t eliminate volatility

    More swaps trading being pushed onto exchanges and other venues will not eliminate the presence of volatility in derivatives markets. However, the move to electronic trading has increased matched trades and efficient sourcing of capital.

    • 30 Jan 2015
  • Growing asset managers need to reduce their delta

    As buyside firms transact in ever larger volumes, asset managers need to reduce the delta risk, known as DV01, the change in the value of their trades caused by a basis point change in rates. However, this is very difficult as capital requirements for investment banks mean that a dealer’s ability to warehouse risk for its buyside clients is diminished.

    • 30 Jan 2015
  • Q&A: Lucio Biase, CEO and Hilary Park, chief strategy officer at LMRKTS

    Tools that enable firms to reduce the number of line items in a portfolio, while keeping the same risk profile, are changing the way market participants trade derivatives. These tools are becoming the new market norm as users look to optimise their balance sheets as increased regulation envelops the derivatives market. Gabriel Suprise was granted an exclusive interview with Lucio Biase, CEO, and Hilary Park, chief strategy officer at LMRKTS, a new firm that offers a novel type of tool in order to minimise counterparty risk. Topics of discussion included what LMRKTS is, how it works and why it is different from other compression offerings in the derivatives marketplace.

    • 29 Jan 2015
  • Funds eye outperformance of SenFin vs. Main

    Hedge funds are eyeing the spread differential between iTraxx Senior Financials and iTraxx Main, which has gone from 1bp in December to wides of almost 10bp this week, following the election of the left-wing Syriza party in Greece. The interest comes on the back of an expectation that the SenFin index will outperform in the longer term.

    • 29 Jan 2015
  • UBS sees gains with new VIX-related ETN

    UBS this week trumpeted the recent launch of an exchange traded note that provides investors with hedged exposure to the Chicago Board Options Exchange Market Volatility Index (VIX).

    • 29 Jan 2015
  • Syriza sends volatility rippling through EU CDS

    The result of the Greek elections on Sunday was clear — an emphatic victory for the anti-austerity Syriza party. The Greek public have signalled that they want to move in a different direction from that of austerity, which they blame for causing high levels of economic pain.

    • 29 Jan 2015
  • Time for discretion

    The financial crisis caused a surge in demand for systematic strategies, but the market environment now may be easier to navigate with qualitative, human intelligence.

    • 29 Jan 2015
  • Compression behind drop in IRD notional, ISDA says

    Compression is behind a 3.6% drop in gross notional outstanding of interest rate derivatives between December 2013 and June 2014, according to the International Swaps and Derivatives Association, who said that the growth in services available at central counterparties and other portfolio compression providers combined with regulatory pressure is driving the trend.

    • 29 Jan 2015
  • IBA reforms ISDAFIX calculation using tradable quotes

    The Intercontinental Exchange Benchmark Administration (IBA) is reforming the methodology for the ISDAFIX derivative benchmark calculation, which represents a first ever move from calculating the rate on a submission-based panel of banks to tradable quotes listed on regulated trading venues.

    • 28 Jan 2015
  • Deutsche loses FX trading bigwig

    Benoy Raveendran, head of options, exotics and cross-currency swaps trading at Deutsche Bank in London, has left the firm.

    • 28 Jan 2015
  • Exchange chief departs LCH.Clearnet

    Alberto Pravettoni, managing director and global head of exchanges at LCH.Clearnet in London, has left the firm.

    • 28 Jan 2015
  • FX volume in the US hits record high of $1 trillion

    The average daily volume total for over-the-counter FX instruments in the US was up by 35% in October 2014 versus April 2013 surpassing $1tr, the highest volume recorded since the survey began in 2004.

    • 28 Jan 2015
  • Nasdaq prepares automated individually segregated accounts

    Nasdaq OMX is working on a new model for collateral management at its clearing house, which could revolutionise the way clearing members handle the operational hurdles of individually segregating each client’s cash and collateral.

    • 28 Jan 2015
  • JPX, SGX launch direct network for listed derivs

    The Japan Exchange and The Singapore Exchange have launched a co-location direct service to offer straight through international network connectivity between data centres in either country following a letter of intent signed between the two exchanges last December.

    • 28 Jan 2015
  • ICAP, Wind Info pair to offer offshore financials to China

    ICAP Information Service has paired with Wind Information Company, a Shanghai-based market data provider, to offer a multi-faceted renminbi and Treasury data service to investors and market participants in China. The partnership will result in the first ever continuous, offshore financial data provision to Chinese markets.

    • 28 Jan 2015
  • Single stock vanillas scooped after Greek election

    Institutional investors have been trading single stock options following a rebound in European equity markets. Despite concerns of turmoil ahead of a potential Greek exit from the eurozone following the country's elections, options trading appeared to be unaffected, with equity derivatives analysts tipping this to continue until action by other leftist parties in eurozone countries becomes clearer.

    • 27 Jan 2015
  • Fast money sell at-the-money vol on QE news

    Fast money investors have been seen selling at-the-money volatility on iTraxx Main in the aftermath of the European Central Bank’s asset purchasing announcement last week, following a trend for buying gamma prior to the meeting.

    • 27 Jan 2015
  • CME Europe lists cocoa futures

    Hedging the cocoa market will be enhanced by a euro-denominated futures contract available from CME Group from March 30, marking the exchange’s first foray into deliverable soft commodities.

    • 27 Jan 2015
  • Revived transaction tax could collapse on legal issues

    The revived attempt to pass a financial transaction tax in Europe could end up caught between a rock and a hard place — a relief for market participants who have seen the tax as yet another potential restriction on trading businesses grappling with a raft of other regulatory burdens.

    • 27 Jan 2015
  • Total Derivatives: Currency move backs short-end CNY bid

    Short-end CNY swaps have been bid as currency weakness has more than offset easing liquidity concerns. Underperformance in the belly of the curve has backed some disinversion momentum in the 1s/5s NDIRS slope, writes Deirdre Yeung.

    • 27 Jan 2015
  • Funds profit on stocks vs CDS after Syriza victory

    Hedge funds took profit on a long stocks, short credit default swaps relative value trade on Monday after Syriza's victory in the Greek election failed to dampen expectations in equities, while the iTraxx wobbled slightly wider.

    • 26 Jan 2015
  • Rates trading dips modestly following multi-week rises

    Overall interest rate derivatives trading that was reported to swap data repositories last week decreased by 12% from the previous two weeks, according to data from the International Swaps and Derivatives Association.

    • 26 Jan 2015
  • SIFI designation under FSOC inherently flawed, say lawyers

    The Financial Stability Oversight Council in the US is changing the classification process for systemically important financial institutions, prompting concern about the government's extended remit over insurance, clearing and other non-financial organisations. With no hard set of rules and procedures for the new classification system yet released, lawyers are concerned that the statute is ambiguous, inherently flawed and opaque.

    • 26 Jan 2015
  • CCP recovery preferable to resolution: ISDA

    Clearing houses should avoid resolution at all costs, according to a recovery framework published by the International Swaps and Derivatives Association on Monday, which said that even when prefunded resources such as member contributions have been exhausted, recovery of a clearing house is always preferable to closure.

    • 26 Jan 2015
  • Total Derivatives: CNY 1s/5s inversion to correct?

    Recent cash injections by the People's Bank of China (PBoC) have supported lower fixings and light receiving in short-dated CNY swaps. With the 1s/5s NDIRS slope still inverted, there is potential for this week's US Federal Reserve meeting to accelerate a corrective move, writes Deirdre Yeung of Total Derivatives.

    • 26 Jan 2015
  • European CDS spreads tighten on ECB purchase plans

    European credit default swap indices tightened yesterday on news that the European Central Bank would buy €60bn worth of bonds a month until September 2016 or later, with the iTraxx Main closing 3bp tighter at 54.7bp and the Crossover also tightening approximately 3bp to 303.1bp.

    • 23 Jan 2015
  • Short term options surge as buyside seeks liquidity

    Hedge funds and asset managers are increasingly turning to short term options and short dated derivatives products as ways of maximising liquidity in an increasingly illiquid market, according to TABB Group.

    • 23 Jan 2015
  • CCPs continue to skimp on skin in the game

    The controversial topic of skin in the game for clearing should focus largely on the contributions that each clearing member must make and not that of the central counterparty, said CME Group, firing back at those who say it is not contributing enough in its US business.

    • 22 Jan 2015
  • Forex failures caused by over-regulation, lawyers say

    Sharon Bowen, from the Commodity Futures Trading Commission, issued a statement on January 22 arguing that the retail FX market was the least regulated part of the derivatives industry, following the shock move on January 15 by the Swiss National Bank to abandon the Sfr1.20 euro/Swiss franc exchange rate peg. However, lawyers argue that retail FX is one of the most heavily regulated sectors, which may in fact be increasing risk.

    • 22 Jan 2015
  • BlackRock pushes buyside trading plan in Europe

    MarketAxess and BlackRock have brought their trading alliance to Europe, launching an all-to-all trading platform for Eurobonds.

    • 22 Jan 2015
  • Credit markets price in European risk

    Commentators on financial markets are sometimes prone to hyperbole, but it is surely no exaggeration to say that the next few days are crucial in determining sentiment for 2015 and beyond.

    • 22 Jan 2015
  • Risk premiums diverge in the political mire

    In recent months, risks have been emerging from nearly every corner of the market. 'Policy divergence' may sound academic, but the effects of changing flows may prove all too real.

    • 22 Jan 2015
  • OCC taps AIG bigwig as chief of risk

    John Grace, ex-senior managing director at AIG, has joined the Options Clearing Corporation as executive vice president and chief risk officer.

    • 22 Jan 2015
  • Earnings jitters see US bank CDS spreads widen

    The credit spreads of five major US banks have widened since they posted fourth quarter earnings results, regardless of whether the earnings posted were above or below expectations, according to a new report by Markit. The report suggests that credit market participants are showing caution on US financial names as regulatory charges heighten investors' awareness of credit risk.

    • 21 Jan 2015
  • Investors eye SX5E options through QE speculation

    Investors have been looking at buying call spreads on the Euro Stoxx 50, funded with out-of-the-money put spreads based on high volatility and expectations of quantitative easing announcements at the European Central Bank meeting on January 22.

    • 21 Jan 2015
  • OCC increases liquidity resources via repo facility

    The Options Clearing Corporation (OCC) has established a pre-funded $1bn committed repurchase facility with a leading pension fund in order to increase the central counterparty’s overall liquidity resources from $2bn to $3bn.

    • 21 Jan 2015
  • Total Derivatives: Inverted curve to extend CNY bid

    Liquidity concerns and firm data have supported paying in CNY swaps. However, the current 1s/5s inversion is expected to limit short-end paying and extend the bid towards five years, writes Deirdre Yeung of Total Derivatives.

    • 21 Jan 2015
  • Rates derivs trading continues upward trend

    Overall interest rate derivatives trading that was reported to swap data repositories last week increased by 14% from the previous week, according to data from the International Swaps and Derivatives Association.

    • 20 Jan 2015
  • BGC overtakes CME with GFI bid exceeding $6/share

    BGC Partners has retaliated once more within hours of CME Group announcing an increased two-tier, front end-loaded tender offer for GFI Group at $5.85 per share, with the interdealer broker offering a fully financed, all-cash tender offer of $6.10 per share.

    • 20 Jan 2015
  • CLS, TriOptima to deliver FX compression tool

    CLS Group and TriOptima have teamed up to offer an FX forward compression service in order to address the regulatory requirement for financial counterparties to have procedures in place to analyse the possibility of portfolio compression for non-centrally cleared over-the-counter derivatives.

    • 20 Jan 2015
  • CME ups the ante once again in GFI bid

    CME Group has once again increased its two-tier, front end-loaded tender offer for GFI Group to $5.85 per share, matching BGC Partners’ contingent $5.85 per share all-cash offer announced on 15 January. This price escalation represents the newest development in a nearly eight month bidding war for the firm, and nearly a $0.40 per share escalation since 15 January.

    • 20 Jan 2015
  • Fast money position for credit index squeeze post-ECB

    Fast money investors have been positioning for a post-quantitative easing squeeze on European credit default swap indices, according to strategists at Citigroup in London, who have noted large net long positioning in iTraxx Main and a small net short non-dealer position in Crossover.

    • 20 Jan 2015
  • Funds tap relative value trade on Italian bank CDS

    Hedge funds have been trading the relative value between credit default swaps on Italian banks UniCredit and Intesa Sanpaolo as UniCredit’s spreads gap wider because of exposure to Russia and Ukraine. On Monday, five year subordinated CDS on UniCredit were trading at 296bp while Intesa Sanpaolo sub CDS traded at 195bp.

    • 19 Jan 2015
  • Hong Kong, EMIR equivalence not enough, lawyers say

    A memorandum of understanding from the European Securities and Markets Authority recognising the Hong Kong clearing regime as equivalent to the European regime under European Markets Infrastructure Regulation is not enough to avoid fragmenting the market, according to lawyers, who said ESMA must prioritise the key issue of US clearing house equivalence.

    • 16 Jan 2015
  • ISDA responds to cross-border issues with reshuffle

    The International Swaps and Derivatives Association has reshuffled its organisational structure to better respond to cross-border issues. Steven Kennedy, ex-head of strategy, research and communications at ISDA, is now global head of public policy. ISDA has also created a regulatory and legal practice group based in Washington DC in addition to a non-cleared margin implementation initiative.

    • 16 Jan 2015
  • UPDATE: BGC fires back with GFI counteroffer within hours

    BGC Partners has retaliated within hours of CME Group announcing an increased tender offer for GFI Group at $5.60 per share, offering a non-contingent $5.75 per share offer that can increase up to $5.85 should the tender offer be accepted by the extended 29 January 2015 deadline. This price escalation represents the newest development in a nearly eight-month bidding war for the firm.

    • 15 Jan 2015
  • Real money investors tap payer spreads on Main

    Real and fast money investors were seen buying payers spreads with February and March expiries in iTraxx Main, as flows in credit options this week suggested market participants have ruled out a substantial widening of credit default swap index spreads.

    • 15 Jan 2015
  • Bidding war continues as CME, BGC go tit-for-tat

    CME Group has increased its two-tier, front end-loaded tender offer for GFI Group to $5.60 per share, matching BGC Partners’ $5.60 per share all-cash offer announced on 14 January. This price escalation represents the newest development in a nearly eight-month bidding war for the firm.

    • 15 Jan 2015
  • Panic erupts as SNB abandons floor causing euro/Swiss to tank

    The Swiss National Bank shocked markets on Thursday when it abandoned its Sfr1.20 floor on the euro and cut the interest rate on sight deposit balances to minus 0.75%. The SNB and some investor portfolios will suffer big losses.

    • 15 Jan 2015
  • Geopolitical blips weigh heavy on markets

    What began as a curious geopolitical squall has become a major storm, affecting not just the markets on which it falls but the weather in other asset classes as well. Risk premiums that remained low until the end of 2014 have finally responded to the pressure.

    • 15 Jan 2015
  • Derivatives reporting to converge under multiple EU regimes

    The way that firms report trade and transaction data under the European Market Infrastructure Regulation and the Markets in Financial Instruments Directive could converge before the implementation of MiFID II in January 2017.

    • 15 Jan 2015
  • Third country end users face clearing challenges under EMIR

    Derivatives end users in the US and Asia are likely to face the biggest hurdles complying with the clearing mandate under the European Market Infrastructure Regulation when it kicks in towards the end of this year, according to lawyers.

    • 15 Jan 2015
  • Learning Curve: From EMIR to eternity

    2014 continued to be an active year for financial regulation in the EU, with a push to finalise much of the outstanding primary legislation on the regulatory reform agenda and to move towards implementation of regulation already in place. The derivatives market will be particularly affected by the new regulatory landscape and the market will face many new challenges in 2015 and beyond.

    • 14 Jan 2015
  • SGX, EBS join forces for FX futures offerings

    The Singapore Exchange and ICAP’s electronic FX business, EBS, have teamed up to develop a new range of Asian currency products and services which will strengthen the liquidity in the FX over-the-counter derivatives and futures markets in Asia.

    • 14 Jan 2015
  • Ambiguous MiFID II to impact commodity derivs markets

    Under MiFID II, forward contracts as currently defined will be considered financial instruments, which is raising significant concerns for commodity derivatives market participants as they will be subject to regulation that they weren’t previously.

    • 14 Jan 2015
  • Making equity derivatives pay at BNP Paribas: Gérardin’s first project

    New BNP Paribas investment bank boss Yann Gérardin is an equity derivatives man through and through, having built the business from scratch since he joined in 1987.

    • 14 Jan 2015
  • What does the falling oil price mean for CDS?

    The precipitous decline in the oil price has taken some of the attention away from Greece, albeit until the elections next week. Less than four months ago the price of West Texas Intermediate crude was more than $100 a barrel; now it is languishing below $50.

    • 14 Jan 2015
  • ESMA’s RFQ battle could hinder derivs trading

    Concerns are rising among market participants that the European Securities and Markets Authority is showing a lack of understanding of request-for-quote and other trading protocols as it prepares new rules. If ESMA imposes overly-restrictive transparency regulations on these technical systems, market participants may refrain from using them, according to lawyers.

    • 14 Jan 2015
  • From EMIR to eternity: the challenges for derivatives in 2015 and beyond

    2014 continued to be an active year for financial regulation in the EU, with a push to finalise much of the outstanding primary legislation on the regulatory reform agenda and to move towards implementation of regulation already in place. The derivatives market will be particularly affected by the new regulatory landscape and the market will face many new challenges into 2015 and beyond, which we consider further below.

    • 14 Jan 2015
  • Weak Norwegian krone sparks vanilla buying in low liquidity environment

    Market participants have been buying vanilla options on the Norwegian krone as the currency continues to weaken as a consequence of the oil price rout. Low liquidity is in turn widening bid-ask spreads.

    • 14 Jan 2015
  • CBOE targets FX investors with currency VIX

    The Chicago Board Options Exchange is now publishing values for three new volatility indexes using the prices of CME Group’s FX futures options in response to client demand.

    • 13 Jan 2015
  • Euronext launches vanilla options on iShares ETFs

    Euronext has launched plain vanilla options on six of its iShares exchange-traded funds on the firm's Amsterdam derivatives market in response to investor demand.

    • 13 Jan 2015
  • Asset managers avoid peripheral CDS hedging on Grexit fears

    Asset managers are concerned about peripheral names in European credit given the potential for a Greek exit of the Eurozone, which could have unpredictable effects on the direction of markets.

    • 13 Jan 2015
  • CDS notionals, rates trading spikes by 400%

    Overall interest rate trading that was reported to swap data repositories last week increased by 420% from the previous week, according to data from the International Swaps and Derivatives Association. Overall credit default swap notional that was reported, also increased by 400% from the previous week.

    • 13 Jan 2015
  • Demand for $/€ exotics increases as pair declines

    Investors have been picking up options on the euro against the dollar as the euro continues to depreciate amid uncertainty over what happens to Greece and the eurozone.

    • 13 Jan 2015
  • MSCI update allows investors to identify crowding

    Hedge funds and broker dealers are set to benefit from the latest suite of updates to MSCI’s equity risk models, which gives equity derivatives investors the ability to track underlying securities and identify crowding that could cause volatility.

    • 12 Jan 2015
  • Swaps end-users eye margin rule reprieve

    End-users trading swaps could be exempted from posting margin on swaps not cleared by registered derivatives clearing organizations under a new Congressional rule amending the Dodd-Frank Act. Despite flaws in the original drafting, the amendment to the rule would be a substantive change to the legislation and would clarify the margin posting process, according to lawyers.

    • 12 Jan 2015
  • GAIN Capital scoops KCG global sales chief

    John Miesner, the ex-global head of sales at KCG Hotspot, has joined GAIN Capital as managing director, head of global sales for GTX, the firm’s institutional FX electronic communications network.

    • 12 Jan 2015
  • BNPP sweeps up $91m for novel structured product

    The first green structured note linked to an equity index by a call option designed for retail investors closed last week with a total subscription amount of $91m, making it the largest public offer for a non-Euro denominated equity index linked bond in Belgium and Luxembourg in 2014. The green bond, a seven year structured note issued by the World Bank, was sold with a zero coupon plus a call option on a basket of stocks from ethical companies.

    • 12 Jan 2015
  • Options desks run huge offshore dollar/renminbi risk hedging

    Banks have been comfortable taking on large amounts of risk in trading options on the dollar versus the offshore renminbi. As liquidity, hedging and volatility increase with the currency’s rising popularity however, new market entrants, new derivatives products and confidence in the Chinese liberalisation programme will drive growth in coming months, according to speakers at a panel hosted by CME Group and the Treasury Markets Association.

    • 09 Jan 2015
  • Banks look to standardise OTC equity derivs

    Investors may soon see structured equity products listed on exchanges as banks look to save costs by using electronic platforms to quote standardised products, instead of individually pricing them over-the-counter.

    • 09 Jan 2015
  • Standardisation is the solution to post-trade efficiency

    The process of minimising line items in a portfolio has been a driving force behind trade compression and termination tools, but whether or not it is the ideal solution has been questioned by some market participants. Gabriel Suprise investigates.

    • 09 Jan 2015
  • LCH-CME basis swaps take off side-by-side with PTC

    LCH-CME basis swaps have been growing in frequency as dealers seek to balance exposure between one or more central counterparties, reports Beth Shah.

    • 09 Jan 2015
  • Netting tools tipped to spike as EU plays regulatory catch-up

    The US has raced ahead of Europe and the rest of the world in implementing derivatives regulation since the global financial crisis in 2008. So it will come as no surprise that US buy and sellsiders are also ahead in implementing compression and similar tools to tidy up their balance sheets. However, Europe is not far behind, as Hazel Sheffield reports.

    • 09 Jan 2015
  • Managing your risk: Compression-like tools here to stay

    Tools that enable firms, whether buyside or sellside, to reduce the number of line items in a portfolio, while keeping the same risk profile, are changing the way market participants trade derivatives.

    • 09 Jan 2015
  • Derivatives: The long road to equity derivatives trading in China

    The opening of the Shanghai-Hong Kong Stock Connect in November, designed to enable Chinese investors to buy shares in Hong Kong, and international investors to access China’s A share market, promises to open up a new era in Chinese derivatives trading. As Hazel Sheffield reports, market participants are proceeding cautiously, but are confident that the market is going to get big.

    • 09 Jan 2015
  • Derivatives: No end to ‘nightmare’ as trading tax rears its head again

    Talks over a European Financial Transaction Tax have been revived since 2014’s European elections. The tax is now being deliberated between 11 key EU member states. Although the scope of its coverage appears to have shrunk, the uncertainty may lead to unforeseen costs for derivatives market participants. Gabriel Suprise reports.

    • 09 Jan 2015
  • Derivatives: A market whose time has come? Treasury vol futures set for hikes

    New futures on a 10 year US Treasury Note Volatility Index, which allow investors to hedge interest rate volatility with a single product for the first time, are gaining traction. As the US is ending quantitative easing, market participants are tipping volumes to surge in the first quarter of 2015 as investors look to hedge their fears over looming rate hikes. Beth Shah reports.

    • 09 Jan 2015
  • Derivatives: Fractured derivative market needs to regain global strength

    Harmonisation and crossborder issues are key concerns for the International Swaps and Derivatives Association as markets enter 2015. As Scott O’Malia, CEO of ISDA and former commissioner at the Commodity Futures Trading Commission, tells Beth Shah, regulators need to ensure that crossborder oversight is based on risk and not location.

    • 09 Jan 2015
  • ISDA: Liquidity threshold under MiFID proposals key concern

    Concern is growing over the European Securities and Markets Authority’s process of establishing definitions and thresholds in the Markets in Financial Instruments Directive – a critical part of which is the process for determining whether an instrument is liquid. If thresholds are calculated incorrectly, market makers may be less willing to provide liquidity to clients, prompting concerns that other market participants may use public data to trade against them, according to the International Swaps and Derivatives Association.

    • 08 Jan 2015
  • Synthetic CDOs back as hedgies drive full cap sales

    Synthetic collateralised debt obligations, one of the financial products synonymous with the global crisis, are set to accelerate their recent tentative comeback. Real money investors are joining hedge funds in chasing the controversial instruments’ double-digit yields, write Will Caiger-Smith and Beth Shah.

    • 08 Jan 2015
  • ICE to launch five new EM FX contracts

    The Intercontinental Exchange has added five new currency contracts to its suite of FX contracts, highlighting investor demand for more access to currency risk management and hedging strategies via emerging market currencies.

    • 08 Jan 2015
  • Real money players snap up volatility on iTraxx Main

    Real money investors, and other investors with a long cash portfolio, have been buying volatility on European credit default swap indices.

    • 08 Jan 2015
  • A market whose time has come? Treasury vol futures set for hikes

    New futures on a 10 year US Treasury Note Volatility Index, which allow investors to hedge interest rate volatility with a single product for the first time, are gaining traction. As the US is ending quantitative easing, market participants are tipping volumes to surge in the first quarter of 2015 as investors look to hedge their fears over looming rate hikes. Beth Shah reports.

    • 08 Jan 2015
  • New Year, New VIX Record

    Fresh concerns about downside risks to global demand sent markets lower and option volatility higher in the first few sessions of the year. As if to acknowledge growing expectations for a more volatile 2015, changes in the level of S&P 500 implied volatility set a new record before the first full week of trading was even complete. Investors saw new reasons to worry about the political stability of the eurozone and about its economic path, as Greece moved toward elections and PMI and inflation data suggested weaker growth prospects for the EU. In addition, the continued drop in oil prices led some participants to wonder whether the weak energy market was indicative of worsening broader global demand.

    • 08 Jan 2015
  • BNPP moves closer to completing RBS EQD buyout

    BNP Paribas is six months away from finalising its acquisition of the Royal Bank of Scotland’s equity derivatives business, according to Nicolas Marque, global head of equity derivatives at BNP Paribas in London.

    • 08 Jan 2015
  • Greek spreads widen as election approaches

    It seems like an aeon ago that a relatively small country in south-eastern Europe held the fortunes of the global economy in its hands. But less than two years has passed since Greece’s debt was restructured, and it is all too apparent that the sovereign still has the capacity to create a noise that belies its modest size.

    • 08 Jan 2015
  • The long road to equity derivatives trading in China

    The opening of the Shanghai-Hong Kong Stock Connect in November, designed to enable Chinese investors to buy shares in Hong Kong, and international investors to access China’s A share market, promises to open up a new era in Chinese derivatives trading. As Hazel Sheffield reports, market participants are proceeding cautiously, but are confident that the market is going to get big.

    • 07 Jan 2015
  • Exchanges report EQD significantly outperforms 2013

    Equity derivatives volumes were a lot higher in December at many of the large exchanges than a year earlier.

    • 07 Jan 2015
  • Margin rules 'must be extended', lenient enforcement needed

    Market participants are unlikely to have documentation in place to meet the G20's initial margin and variation margin requirements in time for the December 2015 deadline, according to lawyers, who said the buyside faces the greatest challenge to comply.

    • 07 Jan 2015
  • Investors trade risk-reversals against Swiss peg as euro tumbles

    Market participants have been trading risk-reversals on the euro against the Swiss franc, effectively betting that the Swiss National Bank will have to lower its floor following renewed eurozone troubles, despite implementing negative deposit rates in December.

    • 06 Jan 2015
  • VXX downside options set to take off in 2015

    Downside trades, such as puts and put spreads, on the iPath S&P 500 VIX short-term futures exchange-traded note (VXX) are expected to increase in popularity as a way to mitigate the risk of volatility spikes in 2015.

    • 06 Jan 2015
  • No end to ‘nightmare’ as trading tax rears its head again

    Talks over a European Financial Transaction Tax have been revived since 2014’s European elections. The tax is now being deliberated between 11 key EU member states. Although the scope of its coverage appears to have shrunk, the uncertainty may lead to unforeseen costs for derivatives market participants. Gabriel Suprise reports.

    • 06 Jan 2015
  • Funds tap SX5E, short iTraxx Main on EU growth optimism

    Hedge funds and absolute return fund managers are going long the EuroStoxx 50 while shorting iTraxx Main on the expectation that stocks will outperform synthetic credit indices after the recent decline of the euro, which reached a multi-year low against the dollar on Monday.

    • 06 Jan 2015
  • Investor taps short-dated VIX options

    An institutional investor was seen picking up call options on the Chicago Board Options Exchange Volatility Index on Monday as market participants look to close out volatility positions that were sold in December.

    • 05 Jan 2015
  • CNH futures gain popularity as A-share exposure hedge

    The start of the Shanghai-Hong Kong Stock Connect pilot is helping to drive up offshore renminbi futures volumes, particularly from international investors, as market participants look to manage currency risk from growing A-share exposure.

    • 05 Jan 2015
  • CDS notional kicks off the new year with upward surge

    Overall credit default swap notional that was reported to swap data repositories last week increased by 44% from the previous week, according to data from the International Swaps and Derivatives Association.

    • 05 Jan 2015
  • Q&A: Scott O’Malia, CEO, ISDA

    Harmonisation and crossborder issues are key concerns for the International Swaps and Derivatives Association as markets enter 2015. As Scott O’Malia, CEO of ISDA and former commissioner at the Commodity Futures Trading Commission, tells Beth Shah, regulators need to ensure that crossborder oversight is based on risk and not location.

    • 05 Jan 2015