Derivs - Equity

Credit Suisse has hired a team of senior Lehman Brothers sales staffers who are expected to start in the New Year.

A former Banc of America Securities sellsider has started a boutique firm to advise clients in the equity derivatives space. Dean Curnutt, founder of New York-based Macro Risk Advisors, has applied for a broker-dealer license so the firm can structure trades catered to individual clients.

Citigroup is recommending a November butterfly on the Euro STOXX 50 on the back of exceptional increases in volatility. One-month implied vol on the index is at historic highs, sitting at around 61% today.

The trade rumored to have cost Deutsche Bank around EUR200 million is understood have been a short volatility position which was forced to close out on Friday as the Chicago Board Options Exchange volatility measure the VIX hit record highs.

Hedge funds are zeroing in on variance swaps referencing commodity indexes to reap the upside from increasing correlation between volatility in stocks and commodity prices.

Credit Suisse’s head of European equity derivative trading Yan Assoun’s future with the bank looks uncertain as it looks to cut staff amid ongoing layoffs in the industry.

Investors should pick up short volatility after the so-called fear measures the VIX and the VSTOXX hit records highs last week and look positioned to fall in line with previous retrenchments.

The London equity options market is buzzing with a rumor Deutsche Bank took a hit of up to USD350 million on its plain vanilla equity options book this week.

Wahid Chaudhry, the former head of index exotics trading at Lehman Brothers, has landed at Barclays Capital in London.

Hedge funds are pushing for equity derivative contracts that allow for a third party to hold on to the collateral they post to dealers, according to Craig Stein, a partner in the structured finance and derivatives practice at law firm Schulte, Roth & Zabel in New York.

Investors are reportedly sniffing around possible positions in correlation.

London-based asset manager F&C’s new UCITS III fund, designed to target asset classes such as volatility, is keeping its EUR43 million invested in cash until liquidity returns to the over-the-counter market—but expects to pull the trigger within two months.