Derivatives - All Articles

  • Backlash against short selling ban grows

    A financial industry fightback against bans on short selling by some jurisdictions is picking up pace, as lobbyists argued against the restrictions this week.

    • 31 Mar 2020
  • US gives sweet SA-CCR relief

    US market participants’ can now use their preferred method of calculating counterparty credit risk (CCR) for derivatives, after US regulators brought the adoption of SA-CCR forward.

    • 30 Mar 2020
  • Derivatives industry pushes for IM relief amid uncertainty

    Financial market trade associations are pushing regulators to give relief on incoming regulatory requirements on initial margin, pleading that the coronavirus is causing too much disruption to their members’ business lines.

    • 26 Mar 2020
  • ABN Amro suffers $200m loss as another strat bites the dust

    Another derivatives strategy has fallen foul of volatile trading conditions, as ABN Amro on Thursday declared a $200m net loss as a result of the blow-out of a client’s positions.

    • 26 Mar 2020
  • FCA stands firm on Libor transition deadline

    After discussions with the Bank of England and the Sterling Risk-Free Reference Rates Working Group over the impact of Covid-19 on companies’ plans to transition from Libor, the UK’s Financial Conduct Authority said on Wednesday that the final deadline of the end of 2021 was immutable.

    • 25 Mar 2020
  • Prop traders plead for faster SACCR amid options stress

    Proprietary trading firms, dealing with swollen options supply, are pleading for regulators to hurry along changes to counterparty credit risk calculations (SACCR) that in their present form are threatening their ability to make markets.

    • 24 Mar 2020
  • Banks kick off RMB interest rate options trading

    A group of 23 banks and 12 securities houses completed 154 renminbi interest rate option (IRO) transactions worth Rmb12.8bn ($1.81bn) on Monday. The new derivatives product is viewed as a solid step for China’s interest rate reform.

    • 24 Mar 2020
  • ISDA chief stresses ‘vital’ importance of keeping markets open

    ISDA chief executive Scott O’Malia on Monday stressed the importance of keeping markets open despite concerns about the spread of Covid-19.

    • 23 Mar 2020
  • Swaps liquidity collapse adds to SSA burden

    Wild swings in the euro/dollar basis swap, and an unreliable interest rate swap complicated bond execution in the SSA market this week. While some liquidity has returned in rates, cross currency swaps are still behaving very strangely.

    • 19 Mar 2020
  • CDS index rolls to go ahead, despite Covid-19 volatility

    IHS Markit is continuing with the Friday rolls for its popular CDX and iTraxx indices, despite the extreme volatility affecting credit markets as Covid-19 and low oil prices spread uncertainty.

    • 19 Mar 2020
  • Open outcry shuttered, as CME fights against shortened trading

    Exchanges around the world have closed their open outcry pits as the threat of Covid-19 has shunted trading over to electronic formats.

    • 19 Mar 2020
  • SRT market struggles with marks as SMEs, corps face crisis

    The synthetic risk transfer market, where specialist hedge funds write protection on up to €100bn of notional risk per year from banks, is grappling with the impact of the coronavirus on SME and corporate credit. The illiquid bilateral transactions barely trade, but have increasingly been financed through the repo market, giving banks and funds a challenge as they fight over where the positions should be marked.

    • 19 Mar 2020
  • Bridgewater unwinds European shorts, other speculators attack bans

    Prominent short sellers have criticised European financial regulators’ clampdown on short selling as being counterproductive. Meanwhile, US hedge fund Bridgewater Associates has been unwinding its multibillion short positions in European stocks, after price falls across indices on the continent in recent days.

    • 18 Mar 2020
  • CFTC slashes work from home rules but UK tinkers

    The US Commodity Futures Trading Commission gave market participants adapting to working from home some relief late on Tuesday, with sweeping no-action relief on voice recording requirements. The UK’s Financial Conduct Authority hasn’t gone so far, but has offered firms some flexibility.

    • 18 Mar 2020
  • LME Ring member comes down with Covid-19

    A Ring dealing member of the London Metal Exchange has been diagnosed with the Covid-19 coronavirus, as exchanges around the world adapt to its disruption.

    • 16 Mar 2020
  • Coronavirus forces change of tactics for SSA new issues

    The volatility gripping markets shows no signs of abating, in spite of the best efforts of central banks. Syndicate desks are hard at work, planning how best to bring SSA deals to such a difficult market.

    • 16 Mar 2020
  • Capital markets firms activate disaster plans

    As the coronavirus pandemic threatens every facet of capital markets activity, trading floors and back offices have emptied in recent days, leading to questions about how efficiently business can be done from home and alternative sites, write Paola Aurisicchio, Jasper Cox, Jennifer Kang and Ross Lancaster.

    • 12 Mar 2020
  • Stress test turns real as virus vol hits fever pitch

    Financial market participants were left wondering this week if what felt to many like a very vivid stress test had become a complete meltdown, as searing volatility puts all players into crisis preparation mode, write Ross Lancaster, Jon Hay, Max Adams and David Rothnie. Strains are appearing in places where they were not expected, such as the US Treasury market. But markets are continuing to function and some traders have enjoyed exceptional volume.

    • 12 Mar 2020
  • Carnage in credit as Crossover plunges further

    The Markit iTraxx Crossover index, a barometer of non-investment grade credit, printed as wide as 575bp on Thursday, as credit markets weakened further, and trading desks were seen refusing to bid bonds and working orders only. Real prices were said to be two or three points below those on screens.

    • 12 Mar 2020
  • Vol shock triggers reassessment in equity derivatives

    Wild swings in equity market volatility have caused a rush to reassess derivatives positions, as the cost of hedging increases and weakness emerges in more exotic products.

    • 11 Mar 2020
  • TP ICAP unveils new FX options platform

    TP ICAP has launched a new trading platform for FX options that will offer both order book and RFQ trading for its users.

    • 10 Mar 2020
  • Hiring on hold as banks battle virus impact

    Investment banks are said to be freezing hiring plans in capital markets, as the impact of the coronavirus epidemic slashes new issuance volumes and expectations for the year ahead. Some institutions are also said to be using the virus as an excuse to push through planned cuts to banking businesses.

    • 10 Mar 2020
  • Siemens Gamesa follows ESG derivatives trend with IRS

    Siemens Gamesa, the wind power provider, has tapped into the nascent market for ESG derivatives with a three year interest rate swap executed by HSBC.

    • 09 Mar 2020
  • Trade bodies warn of CFTC capital rules effects on swaps

    Financial industry lobbyists have told the US Commodity Futures Trading Commission (CFTC) that its proposed revisions to swap dealers’ and major swap participants’ capital requirements will have “a significant negative impact on the US swaps market”.

    • 05 Mar 2020
  • People moves in brief

    Aberdeen Standard's Milligan to quit — Daiwa's Hultgren leaves over Frankfurt relocation — MUFG picks Domann

    • 05 Mar 2020
  • Derivatives exchanges report record volumes as volatility spikes

    Demand for exchange-listed derivatives soared during February, with Cboe Global Markets, CME Group and Intercontinental Exchange hitting record average daily volumes during the month.

    • 05 Mar 2020
  • Covid-19 sees off major derivatives meet

    One of the derivatives industry’s largest annual conferences was cancelled on Tuesday, after the spread of the Covid-19 coronavirus made the event unviable in the view of the organisers.

    • 04 Mar 2020
  • HSBC to join up securities services and markets

    HSBC is moving its securities services business into global markets to create a new unit. Allegra Berman and Richard Godfrey, co-heads of securities services, will gain new responsibilities as part of the change.

    • 04 Mar 2020
  • Mazi and Bibbey take over as El Hayek leaves HSBC

    HSBC has made Mehmet Mazi global head of debt trading and financing, a newly created position. It comes after the departure of Elie El Hayek, a veteran of the bank who had run fixed income.

    • 03 Mar 2020
  • Domann joins MUFG for structured solutions

    Roland Domann has moved to MUFG to be part of its European sales and distribution team, just months after being hired by Nomura.

    • 03 Mar 2020
  • Eurex adds MSCI derivatives to ESG suite

    Eurex launched MSCI index derivatives tailored to fit environmental, social and governance (ESG) investment criteria on Monday, as it works to expand its suite of related products beyond Europe.

    • 02 Mar 2020