Derivs - Credit
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Some hedge funds opportunistically put on short positions as credit spreads widened after the market digested the content of Tuesday’s statement from the Federal Open Market Committee.
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The move to central clearing could spark the long tail risk hedging market.
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Credit default swaps on single names are being tipped for an upswing in trading as volatility subsides and index plays wane as a result.
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HSBC is ramping up its European corporate credit default swap trading operation in London to bring that side of the business in line with its cash trading efforts, according to one senior official with knowledge of the situation.
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Stephen Lane, head of trading for Europe and Asia in Crédit Agricole Corporate and Investment Bank’s debt and credit markets division, has left just over a year since joining the firm, as has Luca Favero, head of credit derivative trading in London.
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Société Générale has hired Steve Munday, a senior credit trader at Nomura, as a director in high-yield credit trading based in London.
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A draft bill circulated by the New York Assembly insurance committee that would have banned naked credit default swaps (DW, 3/22) will have to be scrapped since the U.S. Dodd-Frank Act expressly prohibits states from regulating swaps as insurance.
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As the Securities and Exchange Commission proceeds with its review of fund’s usage of derivatives, it has urged funds to take a fresh look at derivatives-related disclosures.
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Corporates could be impacted by rules being considered in Europe that would restrict short selling across all financial instruments, according to Rolls-Royce.
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BNP Paribas has hired Pinank Modi as a v.p in index options trading based in the firm’s New York office.
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Markit is looking at creating an index of implied volatility for credit indices—the first of its kind as credit indices have focused only on realized vol to date.
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The specter of corporates defaulting on their derivative trades is being raised as lawmaker efforts to grant margin exemptions to the Dodd-Frank Act appear to have lost steam.