Derivs - Equity

IInvestors are shifting their trading strategies from options on indices to single name stocks and exchange-traded funds on the back of pessimism regarding first quarter earnings results.

For several years, US Federal Reserve chair Janet Yellen has insisted that there is a real difference between forecasts and insurance policies — between what we think will happen and the price we are willing to pay in case we're wrong. Many market participants have been unwilling or unable to accept that message.

One institutional investor was seen picking up a large strangle on the Chicago Board Options Exchange volatility index as the VIX fell to its lowest level since December 2014 on Tuesday.

Active trading on central limit order books needs larger liquidity providers and better incentives for more dealers and buyside firms to actively participate, say market participants.

Eurex will launch options on Euro-Bund futures with weekly expiries in April, which will allow investors to gain short term exposure to interest rate moves and event-driven activity, experts say.

As regulators begin imposing penalties for compliance transgressions in swaps markets, firms must build out their operational and reconciliation frameworks, as well as tracking the source of errors and adjusting to new problems dynamically, according to market officials.

At its March meeting, the US Federal Reserve began winding down its policy of extreme transparency and forward guidance, pushing market participants to rely now on economic data instead of qualitative nudges from the central bank.

Emmanuel Girod, the ex-co-head of Europe, the Middle East and Africa equity-linked trading at Bank of America Merrill Lynch in London, is set to join Citigroup, also based in London.

Clifford Davis, managing director institutional equity derivatives sales at BNP Paribas in New York has left the firm.

Market participants trading non-centrally cleared swaps have been given a reprieve as proposals from regulators regarding rules for initial and variation requirements have been delayed.

Investors were buying puts and put spreads on real estate investment trusts ahead of the Federal Reserve Open Market Committee announcement on Wednesday (March 18), as such sectors are sensitive to interest rates so are prime targets for options hedging.

Clearing houses are being forced to re-evaluate margin requirements and costs thanks to persistent incongruences in national jurisdiction rules for central counterparties.