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Deutsche Bank is marketing what is believed to be the first weather derivatives product to its retail clients. In the certificates, priced at EUR100 (USD87) a shot, investors receive EUR108 if the average temperature between June 1 and Aug. 31 is over 20.3ûC in Frankfurt. Investors get EUR98 back if the temperature is below 20.3ûC, according to Akos Zold, v.p. in structured products in London.

JD Capital Management, a hedge fund in Greenwich, Conn., has hired Eric Madoff, v.p. in the equities division at Goldman Sachs in New York, to join its relative value strategy team. Madoff reports to David Rogers, the fund's founder. Madoff declined to comment. Rogers did not return calls.

Gen Re Securities, a derivatives and securities dealer which announced Jan. 28 a plan to close down, laid off approximately 60% of its global staff on Thursday, according to a company official. The staff came from all areas of the firm, including interest rate, credit derivatives, equity options and foreign exchange options traders.

Lehman Brothers is relocating its entire Italian fixed income sales force to Milan, according to officials familiar with the plans. The firm plans to have moved between 12-18 staffers by the end of next month. The firm is making the moving because of the success of moving the French team to Paris and the German team to Frankfurt, according to one official.

Merrill Lynch's head of high-yield sales in London, Tim Davenport, has returned to New York to head the firm's corporate derivatives marketing effort.

Bear Stearns International has hired Reza Rezaeian, convertible arbitrage and default swap trader at Enron Credit in London, as a convertible asset swaps trader. Rezaeian said credit-default swap traders previously handled convertible asset swaps and he is the first and only planned full-time hire.

BNP Paribas is planning to issue synthetic collateralized debt obligations for the first time in non-Japan Asia in the coming months on the back of growing client demand. "It's a natural evolution," said Guillaume Dieu, director and head of Asia Pacific synthetic securitization in Hong Kong. He continued that the firm will look to issue its first synthetic CDO, likely USD1 billion in size, in the next three to six months and possibly two or three additional transactions of the same size later this year.

For the complete results of Institutional Investor magazine's ranking of derivative dealers and products, please click here.

Abbey National Financial Products is about to launch a capital guaranteed FTSE 100 tracker fund that is structured using over-the-counter derivatives. Nigel Cannon, head of equity derivatives marketing in London, said the notes are innovative because they offer 100% participation within what is essentially a capital guaranteed structure, as the FTSE 100 would have to drop by more than 50% in the next five years for investors to lose capital. Traditional capital guaranteed structures do not have that downside feature but usually only offer 70% upside, he noted. "There's a one-for-one downside risk if the market ever falls by more than 50%, but you're talking about the FTSE 100 going below 2,500, and God forbid this market should ever go down that far," he said. The U.K. equity benchmark closed at 5,135 Tuesday.

Banks that sold a European-style dollar/yen double no-touch barrier option with a payout of some USD20-50 million were scrambling last week to cover their exposure as the option looked increasingly likely to expire in the money. Traders said firms short the option have been active selling strangles, in which they sell dollar calls/yen puts struck at the upper barrier and sell dollar puts/yen calls struck at the lower barrier, in order to generate premium in the event the barrier option expires in the money.

Five-year credit-default protection on U.K. telecom company Cable & Wireless blew out 100 basis points Wednesday before tightening to about 70bps wider than the previous week. The move comes amid concern over the telecom operator's accounting practices, which also caused similar widening in the cash bond market and sent its shares to a 12-year low. Mid-market default swaps were quoted around 250bps Thursday, from roughly 180bps earlier in the week.