Derivs - People and Markets

Deutsche Bank is undertaking a major shuffle of global equity derivative trading, sending one of its most senior U.K. staffers to Hong Kong and shifting the Asia boss to London.

Credit defaults swaps on Aiful, flew out to 940 basis points on Monday on five-year spreads, widening 105bps in the week ending Aug. 8, according to Markit data.

• $3.9bn Q3 loss racked up after Alt-A hedging failure • $30bn plan to spin-off REI comes too late • Fannie and Freddie bailout euphoria wiped out Lehman Brothers was front, back and centre of events in the credit market this week and at the close in New York yesterday rumours gathered strength that Bank of America is poised to rescue the ailing investment bank.

Premiums for five-year credit default swaps on Lehman Brothers took a rollercoaster ride today—hitting as wide as 800 basis points earlier today, according to Courtney McAllister, a CDS trader at BNP Paribas in New York, before settling at 500 bps.

Some dealers will be able to terminate swaps and options referencing the stock of beleaguered mortgage lenders Fannie Mae and Freddie Mac, after traders agreed on Tuesday that a credit event had taken place.

Market participants are increasingly looking to uniform settlement agreements to trigger settlement processes for single-name credit default swaps.

Deutsche Bank’s joint head of European global equity derivatives in London, Nino Kjellman, is rumored to be heading to Hong Kong in a reshuffle of the bank’s trading desks.

Thai commercial banks may need to beef up their in-house derivatives expertise if they are able to capitalize on recent Bank of Thailand regulations which have freed up the derivatives market.

Standard Chartered plans to continue bulking up its structured products force in Asia across the board. Remy Klammers, global head of fixed income trading, financial markets for the firm, said it was in the process of looking to bring in more sales, traders and back office staff in the credit, commodities, equity and foreign exchange space.

A new mutual fund went live today that will use custom derivatives to provide predictable upside returns to investors in addition to a fixed return.

Paul Goetz, a single stocks options trader previously at Morgan Stanley, has reappeared at his old firm, Merrill Lynch. Goetz reports to Emmanuel Girod, head of derivatives trading.

The International Swaps and Derivatives Association is hosting a conference call this morning among 10-15 banks and brokers and it will likely lead to dealers getting the option to terminate derivatives linked to Fannie Mae and Freddie Mac.