Derivs - Equity

Kweku Adoboli, a trader in UBS’ exchange traded funds business in London, has been arrested by the City of London Police in connection with a USD2 billion loss from unauthorized trading at the firm. UBS said the matter was under investigation and that the event could cause it to report a loss for the group in third quarter figures due next month.

Asian hedge funds and propriety trading desks have been buying of out-of-the-money puts on Asian indices in size and increasing their exposure to convexity via over-the-counter variance swaps in recent weeks.

The Basel Committee is expected to release additional guidance on the risk capital treatment of initial margin and default fund contributions within the next four weeks.

A number of weeks ago we discussed the crisis beginning in a “calm” manner, with surprisingly little reaction in implied and realized volatility, and skew as the market sold off considerably.

Margin requirements required by European and U.S. derivatives rules will hobble the development of renewable energy, according to speakers on an energy panel at Burgenstock yesterday.

Nicola Pantone, head of Asia equity derivatives flow sales at Société Générale in Hong Kong, is set to join HSBC in a similar role.

VTB Capital is to open up a New York branch within the next several weeks and is expanding its staff in Hong Kong.

The European equity options market is set to open up to high frequency trading in the coming year as a result of several factors including regulation, increasing competition between exchanges, and the merger between Eurex and NYSE Liffe, according to a report released by TABB Group today.

Daiwa Capital Markets has cut a number of equity derivatives staff, including Adam Cowperthwaite, head of equity derivatives sales for Asia ex-Japan in Hong Kong.

Richard Fulton, an ex-executive director in multi-asset structured product sales at Goldman Sachs in London, has joined Citigroup in a similar role.

The Chilean pension regulator has ruled that Undertakings for Collective Investment in Transferable Securities domiciled in Ireland are no longer approved for general investment.

EFG Financial Products has hired Alex Robinson, the ex-director in structured product sales at Barclays Capital, to build out the firm’s U.K. structured product business when it launches later this year.