Derivs - People and Markets

TriOptima has completed the largest energy portfolio compression cycle to date, eliminating a notional outstanding value of $12.1bn.

Jamie Gavin, ex-executive director of operations and global head of change for listed derivatives and over-the-counter clearing at Morgan Stanley, has joined brokerage Newedge as head of institutional OTC clearing sales for the UK.

€2.9 billion notional of barrier options on the euro against the US dollar that expired Thursday ended up being worthless. The barrier options had strikes at $1.2850, but their tenor could not be gleaned.

Central counterparty clearing houses should have more "skin in the game" to keep them from liquidation, according to panellists debating CCP risk at the 35th annual Bürgenstock forum for global derivatives markets in Geneva on Wednesday.

A senior officer from the European Securities and Markets Authority warned on Thursday that submitting data to trade repositories is not enough to fulfil the legal obligation to report derivatives transactions in Europe, and that market participants must take steps to ensure the pairing and matching of trade data they file.

Some smaller dealers in Canada are grappling with the operational build out in order to comply with the Canadian over-the-counter derivatives reporting requirements set to begin on October 31.

Cross-product margin models at central counterparty clearing houses must be focused on structurally correlated products to maintain clearing member access to funds in the event of a default.

Overall credit default swap notional reported to swap data repositories last week increased 34% from the previous week, according to data from the International Swaps and Derivatives Association. This follows two weeks of a consistent uptick in CDS notional, with a combined increase of 64%. Overall interest rate derivatives that was reported, only increased by 5%.

Hedge funds have been taking profit or closing out long vanilla and exotic options trades on the US dollar against the Japanese yen as spot on the pair has continued its uptrend over recent weeks.

The European Commission is considering a six month extension to relief for central counterparty clearing houses not yet registered for clearing.

UBS has brought its futures business under the fixed income umbrella in New York as it continues the move away from principal-based trading to an agency model.

Concerns are mounting in the derivatives market and beyond that it is all starting to feel a bit like 2007 as market players pile into ever-riskier trades and strategies — in turn devouring greater amounts of precious capital — in a bid to overcome the deleterious effect of an enduring era of low volatility and rates on P&L targets.