Derivs - Credit

Investors are entering long strategies on the CBOE VIX, with call spread strategies proving to be the most popular trade, in a bid to protect against higher volatility.

Fund provider Direxion launched Tuesday on the New York Stock Exchange a series of exchange-traded funds that use total return swaps to gain leveraged exposure to equity and fixed income benchmarks.

Overall credit default swaps notional that was reported to swap data repositories last week dropped by 30% from the previous week, according to data from the International Swaps and Derivatives Association. Overall interest rate derivatives trading that was reported, however, climbed by 19%.

Broker-dealers should not have to connect to all trading venues and policy makers should take steps to limit this number in a bid to reduce costs.

Anders Malcolm, ex-head of sales and business development for SEB Fund Services in Luxembourg, has joined Assenagon as managing director responsible for portfolio operations and risk control. He will be based in Luxembourg.

Kim Stolz, vp in equity derivatives sales at Citigroup in New York, has left the firm and will join Bank of America Merrill Lynch as a director, Americas equity derivatives flow sales.

Hedge funds and real money accounts have been selling credit default swaps on Deutsche Bank and buying CDS on Barclays, expecting Deutsche Bank to tighten relative to Barclays in light of litigation risk that could impact both banks.

Inna Bochkova, former managing director and head of US flow equity derivatives sales at BMO Capital Markets, has joined Susquehanna International Group.

Bearish hedge funds are taking advantage of record elevated skew levels on the S&P500 this week, entering at-the-money three-month down-and-out put options.

UBS has hired Amir Heravi, a former equity derivatives trader at BNP Paribas in New York, as co-head of index flow trading, also in New York.

Overall interest rate trading that was reported to swap data repositories last week dropped by 15% from the previous week, according to data from the International Swaps and Derivatives Association. Overall credit default swaps notional that was reported, however, climbed by 2%.

Credit options flows have diverged in recent days as investors become divided on strategies amid heightened market liquidity, suggesting geopolitical tensions in Gaza and Ukraine have had little impact on investors' risk appetite.