Derivs - People and Markets

Fx volatility, particularly in sterling, has increased on the back of increased options trading due to the uncertainty of the outcome of the upcoming Thursday Scottish referendum. This comes following months of historically low fx vols and a continued slump in trading volumes.

Overall credit default swap notional reported to swap data repositories last week increased 33% from the previous week, according to data form the International Swaps and Derivatives Association.

The Commodity and Futures Trading Commission is in talks with US clearinghouses, discussing the possibility of making some fx derivatives contracts mandatorily clearable by either year’s end, or Q1 2015.

The over-the-counter Derivatives Regulators Group is looking at various approaches to resolve cross-border implementation issues, especially pertaining to organised trading platforms and how they can be regulated.

Credit Suisse plans to launch its swap execution facility agency platform next Monday, which will facilitate SEF trading for the firm’s clients.

Increased trading activity in the fx options market, particularly in G10 currency pairs, has resulted in a significant spike in volatility following months of low fx vols and trading volumes.

US regulation may mean investment managers that are operated and managed out of the US will have to constrict their trading to US counterparties, therefore introducing barriers to trading opportunities and hampering competition.

Paul Baron, head of European equity derivative sales at Bank of America Merrill Lynch in London, has relocated to New York to take over from John O’Brien, former managing director and head of New York derivatives sales.

More made-available-to-trade determinations could be seen as swap execution facilities introduce more asset classes and the nascent market evolves further.

Calculating initial margin for uncleared over-the-counter derivatives is posing significant challenges for the industry and market participants need to look at adopting a standardised model to ensure consistency when calculating margin.

Ed Steel, former managing director and global head of equity derivatives trading at Standard Chartered in Hong Kong, has joined Nomura in London.

The Chicago Board Options Exchange will launch futures trading on the CBOE/ Chicago Board of Trade 10-year US Treasury Note Volatility Index on Thursday, Nov. 13, allowing users to hedge interest rate volatility risk based on U.S. government debt with a single product for the first time.