Derivs - Equity

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.

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.

BGC Partners has increased its all-cash tender offer to acquire GFI Group to $5.45 per share, representing a $.20 premium per share compared to CME Group's offer.

The Financial Conduct Authority is focusing its risk-based oversight efforts in four critical areas of the European Market Infrastructure Regulation for 2015 – trade reporting quality, clearing services provision continuity from clearing members, market readiness for the clearing obligation, and the bilateral requirements for non-cleared trades. This comes as February marks the first year anniversary of trade reporting under the regulation.

Banks operating with large swaps trading operations will no longer be required to relocate their trading to a separate legal entity that is not federally insured following the rollback of Section 716 of the Dodd-Frank Act. As a result, banks will avoid incurring significant expenses, while saving time and personnel, according to lawyers.

Despite a last minute upswing, 2014 is poised to conclude as one of the least volatile years in recent memory.

The Commodity Futures Trading Commission has permanently approved LCH.Clearnet as a derivatives clearing organisation under the Commodities Exchange Act, after reviewing and amending the clearing houses’s original authorisation.

Volumes have nearly doubled over the past week in Chicago Board Options Exchange Volatility Index (VIX) call spreads as investors seek volatility protection, driving options premiums higher.

The European Commission has extended the mandatory capital standards for exposures to central counterparties under the Capital Requirements Regulations. Recognising that CCP authorisation and compliance requires more time to complete, regulators have extended the deadline by six months.

Institutional investors have been picking up protection via options on energy-linked stocks driven by a decline in energy markets. Market participants were seen both selling calls and/or buying puts.

The US Congress is scheduled to consider a proposal included in the government funding bill which would allow banks to keep swaps trading units, rescinding a provision in Dodd-Frank that forces banks to spin off certain derivatives trading activities into another legal entity.

Kay Swinburne, Conservative co-ordinator for economic and monetary affairs, has hit back at the idea that the more controversial aspects of the Markets in Financial Instruments Directive can be fixed when the European Securities and Markets Authority writes its technical standards.