Derivs - Equity

The recent historical stability in implied downside skew in the FTSE 100 is likely to drive an uptick in put strategies as market participants expect the skew to experience a drop in line with other equity indices. Over the last month, the S&P 500 has witnessed a sharp decline in implied downside skew, while the Eurostoxx 50 skew has continued to decline over much of the last year.

Lower volumes in equity derivatives from the buyside are weighing on sellside revenues, with a number of firms reporting declining revenues in equity in their latest quarterly results.

HSBC is set to hire Nagi Bedawi from JPMorgan and Enrico Lais, who most recently worked at Citigroup, as senior equity derivative traders in London.

Mumbai-based Reliance Capital has closed a 36-to-40 month INR20 crores (USD3.6 million) equity-linked auto-call structured product referencing the India’s Nifty index, the firm’s largest transaction ever and one of the largest deals in the Indian market this year.

Hugo Merida-Barba, head of equity trading for Asia at Banco Bilbao Vizcaya Argentaria in Hong Kong, has left the firm.

Knight Capital Group has hired Ana Concejero, a former head of Latin America and Iberia capital markets at BlackRock, as managing director in listed derivative sales for Europe, the Middle East and Africa in London.

Hedge fund investors are offering to sell short-dated convexity and volatility via variance and vol swaps on Asian indices this week, pushing prices down.

Credit Suisse has hired Will Brett as managing director and head of Americas corporate equity derivatives in New York. He is expected to start in the beginning of October.

To say the markets over the last 12 months have endured periods of heightened volatility would be an understatement. Buysiders, as a result, sharpened their awareness and upped capital allocation to volatility products, whether through exchange-traded notes, exchange-traded funds, or bespoke indices linked to the VIX. Those buyers, including asset managers and pension funds, tagged Nomura as ahead of the competition for its innovation in volatility themed strategies, indices, funds and products. That helped the firm land the 2012 Volatility House of the Year award from the editors of Derivatives Week/Derivatives Intelligence.

Issuers in Australia are growing their structured products desks to tap changing investor appetite for fixed-income products.

The Hong Kong Monetary Authority and Securities and Futures Commission has released their joint consultation findings on proposed over-the-counter derivatives regulations, concluding that they would relax some measures, including giving banks the option to use a foreign clearinghouse rather that requiring them to use a local onshore one.

The Securities and Exchange Board of India has approved the MCX Stock Exchange to begin trading equity and equity futures and options, interest-rate futures and wholesale debt segments, as it expands beyond commodities futures.