Derivs - FX

Credit Suisse is advising buying short-dated seagulls with a reverse knock-in on the U.S. dollar against the yen to position for continuing yen strength, following the Bank of Japan’s policy meeting Tuesday.

Hedge funds are snapping up three-to-six month double no touches referencing Latin American currencies, such as the Brazilian real, and major currency crosses in a bid to benefit from volatility decreasing further.

Attempting to simplify product information in a key information document for structured products may limit the usefulness of the disclosure and is likely to mislead investors, according to the Joint Associations Committee on Retail Structured Products.

Nomura is pitching an fx play to benefit from the expected replacement of Bank of Japan Governor Masaaki Shirakawa in April 2013.

The Japan Securities Clearing Corp.’s move to become the first Asia Pacific clearinghouse to register as a derivatives clearing organization—or DCO—under the U.S. Commodity Futures Trading Commission could be an expensive venture for the CCP, but is needed to be competitive in the emerging global clearing marketplace, according to lawyers and officials in Tokyo.

As the derivatives market moves towards central counterparty clearing, initial margin has increasingly become a subject of industry discussion. CCPs require firms to post initial margin when entering into derivatives to provide protection in the event of a default; however, concerns over how the margin is calculated are growing. Market participants are now looking at the potential for standardizing initial margin.

U.S. firms operating in Japan are losing trades to European and domestic counterparties, as complying with Dodd-Frank rules adds an extra 10 minutes to the trading process, according to Hiroki Tomiyasu, executive director at Morgan Stanley MUFG Securities in Tokyo.

Funds have been picking up a variety of options on the U.S. dollar against the yen with the view that the dollar will appreciate.

The Japan Financial Services Agency plans to push regulators in the U.S., Europe and other regions to move forward with the implementation of mandatory clearing of over-the-counter derivatives.

The International Swaps and Derivatives Association has written the Commodity Futures Trading Commission a letter saying that the forwards exclusion requirements under Dodd-Frank are too strict.

Omer Suleman, an ex-fx options trader at Citigroup in London, has joined Goldman Sachs as a G10 fx options trader, also in London.

Credit Suisse is pitching a structure to position for medium to near-term recovery in the rupee by buying six-month dollar/rupee put butterflies with the addition of a reverse knock-in barrier.