Derivs - Equity

Retail investment house Arc Capital & Income was today seeking alternative third parties to back its Fixed Income and Kick-Out plans, which were set to be hedged by Lehman Brothers before its collapse.

A large, unnamed institutional investor has taken a short-dated position that shares of consumer banking giant Washington Mutual will not expire above USD5 at the end of this month.

Deutsche Bank is undertaking a major shuffle of global equity derivative trading, sending one of its most senior U.K. staffers to Hong Kong and shifting the Asia boss to London.

Some dealers will be able to terminate swaps and options referencing the stock of beleaguered mortgage lenders Fannie Mae and Freddie Mac, after traders agreed on Tuesday that a credit event had taken place.

The financial sector saw short dated equity put activity this week despite levels of illiquidity in the market that has left traders bemoaning the difficulties of doing business.

An unnamed European insurance company reportedly bought a hefty equity put spread collar at some point in the last few weeks, according to a senior trader in single stocks globally, who said the trade seems to be dramatically affecting skew.

Deutsche Bank’s joint head of European global equity derivatives in London, Nino Kjellman, is rumored to be heading to Hong Kong in a reshuffle of the bank’s trading desks.

A new mutual fund went live today that will use custom derivatives to provide predictable upside returns to investors in addition to a fixed return.

The International Swaps and Derivatives Association is hosting a conference call this morning among 10-15 banks and brokers and it will likely lead to dealers getting the option to terminate derivatives linked to Fannie Mae and Freddie Mac.

RBC Capital Markets issued a five-year 100% principal-protected note last week linked to a basket of global blue-chip stock indices.

Andrew Ellner, an equity derivatives pro who set up a systematic trading business at Lehman Brothers and was previously a principal at Credit Suisse, has formed a new fund.

Lyxor Asset Management is planning a push into the U.K. with its volatility funds.