Derivs - Equity

The European Council has taken a stricter stance on pension funds clearing over-the-counter derivatives in the latest draft of the European Market Infrastructure Regulation.

The correlation is a measure of the tendency of share prices to move together, and the most common incarnation is seen in the “diversification effect” in portfolio theory.

Some insurance companies, who typically buy long-dated variance swaps or long-dated put options to hedge their variable annuity exposure, have instead been selling their long-dated variance positions and buying back short-dated put options in size as a substitute hedge over recent weeks.

Société Générale recommends investors buy protection on the Australian iTraxx index if spreads tighten back to 150 basis points over the next few days.

JPMorgan has hired Jason Shrednick as an executive director in the corporate derivatives marketing group in a new role based in New York.

The China National Association of Financial Market Institutional Investors’ is reportedly planning to require counterparties to start using its master agreement for all yuan-denominated derivatives contracts, including offshore CNH deals.

The Canadian Securities Administrators could impose undue regulatory requirements on the jurisdiction’s structured product industry if they do not amend a current proposal that attempts to regulate securitized products alone.

The 2011 ISDA Equity Derivatives Definitions were published July 8, 2011 after a process lasting more than 17 months and involving more than 60 market participants on both the buy- and sell-side.

HSBC Global Asset Management has received approval from the Hong Kong Securities and Futures Commission to launch a new fund, the China Consumer Opportunities Fund, according to the regulator’s website.

The derivatives market in Asia has remained surprisingly calm and resilient despite recent global economic instability affecting the region’s stock markets, according to PJ Andersson, managing director head of pan-Asian equity derivative and convertibles sales at Citigroup in Hong Kong.

A bespoke swap giving an offshore dealer synthetic exposure to onshore China A-shares has closed, and two others are in the works, according to officials in Beijing and Hong Kong.

Investors should buy call spreads on Ebay, Sherwin-Williams and Intel stock, to name a few, as opposed to taking outright long positions in U.S. equity due to lingering concerns over the European debt crisis, say equity derivative strategists at Barclays Capital.