Derivs - Credit

Swap execution facility TeraExchange has launched the first regulated platform for bitcoin derivatives and a spot bitcoin price index in response to growing demand from global merchants, payment processors, miners and hedge funds for an efficient hedging tool.

GlobalCapital’s annual Global Derivatives Awards in London on September 18 will honour the people, companies and deals that shaped derivatives markets over the last year. Among those winners will be Blythe Masters of JP Morgan, winner of the Outstanding Contribution Award. Ahead of the gala evening, Masters granted a rare interview to GlobalCapital’s Beth Shah to talk about her life and extraordinary career.

Front month CBOE Volatility Index futures may experience a 1 vol point increase from -0.33 to 0.66 pts on Monday roll dates relative to historics, due to recent changes made to the indices methodology, closing off a strategy systematic volatility traders have been using to capitalise on the weekly “seasonality” effects of the roll.

The Chicago Board Options Exchange is in talks with the Financial Industry Regulatory Authority regarding an agreement for FINRA to provide certain regulatory services to the CBOE and C2 options markets.

Hedge funds and asset managers with exposure to Russian banks have been buying credit default swaps on EU companies with exposure to Russia, implementing a proxy hedge in light of new sanctions against Russian reference entities, writes Hazel Sheffield, just as one law firm warned of the perils of trading CDS on the country's credits.

Overall credit default swap notional reported to swap data repositories last week increased 33% from the previous week, according to data form the International Swaps and Derivatives Association.

The over-the-counter Derivatives Regulators Group is looking at various approaches to resolve cross-border implementation issues, especially pertaining to organised trading platforms and how they can be regulated.

Credit options on iTraxx Crossover and iTraxx Senior Financials indices may migrate to the subordinated financials index after the roll to series 22, due to new names in Crossover and greater protection in SubFin offered by new financials definitions.

US regulation may mean investment managers that are operated and managed out of the US will have to constrict their trading to US counterparties, therefore introducing barriers to trading opportunities and hampering competition.

Paul Baron, head of European equity derivative sales at Bank of America Merrill Lynch in London, has relocated to New York to take over from John O’Brien, former managing director and head of New York derivatives sales.

Calculating initial margin for uncleared over-the-counter derivatives is posing significant challenges for the industry and market participants need to look at adopting a standardised model to ensure consistency when calculating margin.

Hedge funds and some real money desks were seen setting up bullish positions using credit options in iTraxx indices ahead of the European Central Bank meeting on Sept. 4 and unwinding them to a profit not long afterwards, according to credit analysts.