Derivs - Equity

Hedge funds, pension funds and insurers have been entering into option strategies to profit from the volatility spread between the Nikkei and the S&P 500, following a period of falling implied volatility in the Japanese index. Although implied volatility in the Nikkei has now recovered, funds are holding off from taking profits on the trades.

VTB Capital has hired Dimitrios Kavvathas, the ex-co-head of securities distribution and head of structuring, Asia Pacific ex-Japan at Goldman Sachs, as head of global markets for Asia Pacific in Hong Kong.

The central banks of the U.S. and Japan will not be required to comply with EMIR reporting and clearing requirements after the Council of the European Union approved a European Commission act calling for their exemption.

Ex-Deutsche Bank interest rate staffers Paul Swaddling and David Martins da Silva have launched Prism Financial Products, a buyside brokerage. Christopher Rokos, the ex-co-founder of Brevan Howard, is also involved in the launch, according to a U.K. Companies House filing.

Ashley Wilson, global head of equity finance and head of prime services at Barclays in London, has left the firm.

Recent press reports of Congressional and U.S. Commodity Futures Trading Commission investigations of possible price manipulations involving financial and energy assets have once again raised the question of what types of behavior constitute unlawful manipulation under the Commodity Exchange Act (CEA), which governs exchange and over-the-counter trading in a wide range of financial and commodities assets and values and can reach activities beyond U.S. borders.

Relative value volatility trades where investors go long the vol spread between two indices via variance spreads have been realizing significant profits over the last year.

Hedge funds are increasingly purchasing variance swaps on the Eurostoxx 50 against other indices on the back of volatility selling pressure in the Dec-14 and Dec-15 maturities.

The Hong Kong Securities and Futures Commission is leading the international charge to tackle cross-border extraterritoriality of global regulatory reforms stemming from the Pittsburgh G20 commitments, setting up a cross-border task force designed to bring industry and regulators together.

Mirae Asset Group listed Thursday on the Korea Exchange its first synthetic exchange-traded fund in South Korea, which tracks the MSCI U.S. Real Estate Investment Trust index.

Société Générale has hired Josh Elboim, an ex-director in equity derivatives sales at Credit Suisse in London, in a similar role, also in London.

Nomura Securities in Tokyo is preparing to list a new range of exchange-traded notes that track the Dow Jones Industrial Average leveraged and inverse indices while hedging yen depreciation, a first for the Japanese market.