Derivs - Equity

Hedge funds have been increasingly opting for options on Eurostoxx dividends with mid-term maturities as risk premium contraction in equities has reduced expected returns from long only, delta one strategies. Typical option structures have included call spread/ratios, call spread collars and put collars, according to traders and strategists.

Equity investors in Asia have been sitting on the sidelines this week as the market slows down ahead of Chinese New Year and the upcoming meeting of the U.S. Federal Reserve, according to traders and strategists.

Officials in Seoul are skeptical moves by the country’s financial regulator to open the market to greater product diversity will boost dwindling derivatives volumes.

Andrew Baehr, the former head of U.S. structured sales at BNP Paribas in New York, has joined Credit Suisse in a senior role in the firm’s equity derivatives investor solutions team, also in New York.

RBC Capital Markets has hired Jonathan Russo, the former head of equity and fund derivatives structuring, Americas, at Calyon in New York, in a similar role, also in New York.

DBS Bank in Hong Kong is looking to market equity-linked notes denominated in renminbi that reference an equity underlying in Hong Kong. The issuance is based on the view that there will likely be a relaxation in RMB convertibility, which will spur demand for such structures.

Citigroup is planning to expand its structured product sales coverage in Asia Pacific as retail and institutional investors increasingly look to enhance their equities exposure.

Some of the largest global asset managers are looking at unwinding positions on Nikkei dividends entered into early in 2013 and could subsequently sell out-the-money 105 calls.

The International Swaps and Derivatives Association and China’s National Association of Financial Market Institutional Investors have talked about cooperating on areas of interest. It’s a detente following a period of frosty relations.

The Chicago Board Options Exchange is aiming to launch short-term VIX futures in February and short-term VIX options the following month.

The International Swaps and Derivatives Association has appointed external counsel to produce a memorandum updating its clients on China’s close out netting rules.

Standard Chartered is looking to launch a distribution platform within two months for a number of tradable custom indices, which will reference varied asset classes including equity, credit and high yield.