Derivs - Equity

A Eurostoxx 50 dividend strategy, which targets a long eight-month constant tenor exposure to dividend futures by rolling weekly between near-dated contracts, is set to receive increased interest from investors looking to generate alpha in 2014, according to strategists at Bank of America Merrill Lynch.

Some investors have been buying 10800-11400 January call spreads on the HSCEI in a bid to take advantage of an expected rebound in the index.

The CBOE Futures Exchange has reported that annual trading for futures on the VIX reached an all-time high in 2013.

South Korea is set for a major shakeup in 2014, as regulators, investors, securities firms and the Korea Exchange push to inject greater diversity into available investment products in the country.

Market participants that are found guilty of committing fraud or manipulation in the E.U. could face jail under rules agreed by the European Parliament and E.U. member states today.

Financial counterparties and non-financial counterparties will be required to delegate risk-management procedures and arrangements to an asset manager who is providing portfolio management services to the counterparty on an agency basis, according to the European Securities and Markets Authority.

Arrowgrass, a London-based alternative asset manager, has hired Michael O’Connor, a former portfolio manager at GLG Partners for Asian debt, equity and convertible bonds, as a structurer in the firm’s corporate development and structuring team.

Nomura has hired Mike Ward, the former head of equity sales for Europe, the Middle East and Africa at Bank of America Merrill Lynch, as head of European equity sales in London.

Rules from the U.S. Commodity Futures Trading Commission that require derivatives to be traded on a swap execution facility have resulted in fragmented liquidity and decreased derivatives trading volumes, according to a survey conducted by the International Swaps and Derivatives Association.

Hedge funds are considering entering innovative conditional dividend swaps on the Eurostoxx 50.

Investors should consider going long the Nifty, entering December 2014 call spreads with strikes between 115% and 130%, in a bid to play the potential upside following India’s general election in 2014.

Institutional investors have been diving into December and January upside calls on the Eurostoxx 50 in anticipation of the U.S. Federal Open Market Committee meeting, which begins tomorrow.