Derivs - FX

Dealers have been making deliverable forward trades and buying and selling over-the-counter options in the U.S. dollar/Chinese yuan over the past week, as the offshore market in the currency gains ground in Hong Kong.

FX Concepts aimed to profit from the volatility skew in the euro against the U.S. dollar in a trade a few months ago on the back of a spike in market tail-risk hedging strategies earlier this year.

Paul Bowmar has joined BNP Paribas in New York as head of fixed income CVA trading and credit/rates/fx hybrid trading for the Americas, according to an internal memo seen by Derivatives Week.

Bullish U.S. dollar trades were hitting the market early this, reversing the generally bearish tone of the last few months. But, those long dollar plays were stalling today as volatility plays spiked.

A deep market for renminbi-denominated offshore structured products and forwards is still a ways off as the offshore renminbi deposits in Hong Kong are not large enough to sustain the market and the threat of China cracking down is still in players’ minds, investors and bankers said.

Hedge funds have been buying six month to one year double no-touch U.S. dollar/Canadian dollar options in response to the expectation of a correction in the Canadian housing market.

Hedge funds and insurance companies have been putting on bearish U.S. dollar trades against high-yield and commodity currencies through worst-of basket options and basket collars over the last few weeks.

Lloyds TSB Corporate Markets has hired Phil McCabe, head of rates products structuring at Royal Bank of Scotland in London.

The Futures Industry Association is creating documentation for clearing over-the-counter derivatives that market watchers believe could become the industry standard.

Hedge funds were buying four-month deep one-touch digital options on the U.S. dollar/Swiss franc this week, with barriers between CHF0.84 and CHF0.88.

The Futures Industry Association is creating documentation for clearing over-the-counter derivatives that some market watchers believe could become the industry standard.

Long-short FX basket options have been in demand over the past few weeks.