Derivs - Equity

Bizarre trading dynamics conspired to save over-confident trades backing a Hillary Clinton victory in the US presidential election, with a ‘Trump bounce’ in the aftermath curtailing volatility and sending many short-volatility plays back into the money. But the shock of the Republican victory adds to that of the Brexit vote in June and has jolted market complacency on other political events in the coming months.

Velocity, a derivatives blockchain project, has closed, saying that financial derivatives “are a little too early” for the Ethereum ecosystem.

Singapore Exchange has completed its takeover of the Baltic Exchange in London.

Trading volumes reported in the wake of the US presidential election suggest that November is off to a flying start for derivatives exchanges. But the Trump effect only begins to mitigate a pronounced slump in activity for some asset classes in October.

The US stock market and the dollar have been falling since last week, as fears have grown that Donald Trump might win the US presidency in Tuesday's election.

A shift of momentum in the US presidential race has sent tremors through derivatives markets this week, with equity implied volatility ramping up, credit index spreads widening and the Mexican peso slumping against the dollar.

Equity derivative implied volatility in the US has ramped up over the past week as opinion polls on the result of the election suggest a 'closer call'.

The Depository Trust & Clearing Corporation has named a new head of its Fixed Income Clearing Corporation business.

This week, the Chicago Board Options Exchange (CBOE) launched a volatility smile index the tracks the steepness of the implied volatility curve of S&P 500 index options.

Hong Kong Exchanges and Clearing will introduce a ‘volatility control mechanism’ next month for its derivatives market in a bid to stop trading errors and other incidents causing extreme price volatility.

Concerns that a ‘hard Brexit’ will lay waste to the pound and ratchet up UK inflation are furnishing a wave of innovation in structured products, as market participants look for more sophisticated ways to play a breakdown in previously dominant correlations between different asset classes, writes Dan Alderson.

Eurex and CME Group both lined up new futures contracts this week as the market assessed a generational shift from bilateral derivatives towards cleared, exchange traded products.