Derivs - Equity

Volatility has bounced back to levels last seen more than a month ago as the equity markets continue to be routed by earnings shocks in financial names.

Barclays Capital is preparing to launch an investment structure called a cross asset rotator.

Yann Garnier has replaced Nicolas Reille as head of structured products sales Asia ex-Japan for Société Générale in Hong Kong.

Calendar spreads on stock indices are becoming increasingly popular with some endowments.

Equity derivative trading volumes plunged to an all-time low during the last quarter of 2008 as funds and prop desks pulled back.

Neil McCormick, head of global equity exotics and hybrids trading at JPMorgan in London, is understood to have resigned.

Société Générale is recommending investors go long machinery, healthcare, electronics, communications equipment and software stocks by buying delta call spreads reflecting a roughly 40% chance the stocks will gain ground by the third quarter.

Maxim Group is looking to issue a gold-linked principal protected note to retail investors at month end for the first time. It expects investors to seek a hedge against possible inflation post-economic crisis.

Details of Deutsche Bank’s fourth quarter losses are emerging, with market sources suggesting equity and credit derivative positions could be responsible for it at least USD2 billion of the EUR4.8 billion (USD 6.3 billion) hole the bank pre-announced last week.

Asset managers and insurance companies in Europe are selling covered calls on German financial stocks as they did late last year and buying put options for protection, but are barely using any new trading strategies.

Standard Chartered has hired James deCastro as its head of Asia equity derivatives trading, a new role for the bank.

Commerzbank is reportedly set to cut 25-40% of the Dresdner Bank equity derivatives team, currently about 100 strong, after its purchase is formally completed in March.