Derivs - Equity

The Montreal Exchange could see more liquidity from US-based equity dealers wanting the benefits of exchange trading, while retaining the ability to protect their positions from front running by other market participants. TMX’s exchange rules allow dealers to hedge their positions before executing their trade, helping reduce delta risk - or the option’s price compared to the underlying stock.

CME Group saw record trading volumes on their S&P 500 options contracts late last week, with trading reaching over 1.1 million on the bourse’s e-mini contracts late last week.

Investors have been trading short-dated risk reversals on high yield bond exchange-traded funds or big cap equity ETFs in a bid to hedge further declines in the US stock market.

The Chicago Board Options Exchange traded about 68,033 volatility futures contracts Thursday night, breaking a record it set in July for trading in non-US trading hours.

Washington D.C.-based brokerage Matrix Capital Group is looking to launch a capped structured product that will track the Russell 2000 index via exchange-traded options, while using a unit investment trust-sponsored wrapper to help eliminate credit risk.

Investment management provider SEI has hired Paul Nevin, an ex-managing director in institutional structured sales at Credit Suisse in London, as a director and senior client portfolio manager in the firm’s institutional group.

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.

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.

James Boyle, head of equity derivatives trading, Asia Pacific, at Citigroup in Hong Kong, has been named as global head of equity derivatives, replacing Simon Yates who recently left the firm to join Two Sigma Securities as ceo.

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.

Jose Mosquera, ex-head of financials trading, and Rob Illingworth, ex-senior investment grade corporates trader, have both left HSBC in London, writes Hazel Sheffield.