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ABN AMRO has hired Emma Edworthy, foreign exchange options analyst at Standard & Poor's MMS in London, to boost its trading recommendations capability. Tony Norfield, global head of foreign exchange research at ABN AMRO in London, said with more currency overlay managers and corporate treasurers using foreign exchange derivatives it decided the time was right to offer regular trading strategies. The bank's research team has focused on market movements rather than trading recommendations until now. Edworthy, who started two weeks ago and reports to Norfield, did not return calls.

Ronald Tam, a currency options trader at BNP Paribas in Singapore, has joined AIG International in Singapore, where he is responsible for trading options on all tradable Asian currencies. Tam reports to Greg Romundt, senior v.p. and director of emerging markets in London. Romundt said the firm is looking to build its Asian currency presence, declining to comment on whether Tam takes a new position or if he has replaced a trader. Tam said the position at AIG represents a better opportunity.

Credit default swap prices on sovereign Argentina widened late last week after Domingo Felipe Cavallo replaced Ricardo Lopez Murphy as economy minister and announced his plans to stimulate economic recovery. Bid levels for one-year protection skyrocketed to 1,050 basis points from around 850bps after Callo announced that he planned fewer spending cuts than the market expected, according to an emerging markets credit derivatives trader in New York.

Banks in Europe, led by Commerzbank, were seen snatching up receiver swaptions in size last week as prop desks and clients positioned themselves for a European Central Bank interest-rate cut this week. Traders estimated that several billion euros (notional) of receiver swaptions rolled through the market, with Commerzbank said to be behind about EUR1 billion (USD888 million) in trades. Meyrick Chapman, director, derivatives strategy at UBS Warburg, said a EUR1 billion swaption is huge in a market where a EUR200 million deal is noteworthy. Popular trades included buying the right to enter a five-year or 10-year swap in one month or six months. Implied volatility on the option to receive fixed in the five-year swap in a month shot up 100bps to 13.75% Thursday.

One-month U.S. dollar/Brazilian real implied volatility surged last week to 14%/17% from about 11%/14% after the resignation of Argentina's minister of economy and the appointment of a new minister. Speculators and hedgers bought dollar calls/real puts, typically in one- to three- month maturities and struck at-the-money or slightly out-of-the money, according to Anshu Goyal, v.p., Latin American foreign exchange options and forwards trader at Lehman Brothers in New York.

Mehraj Matto, co-head of fund derivatives at BNP Paribas in London, has joined Dresdner Kleinwort Wasserstein as head of fund derivatives. Matto will report to Robin Farrell, head of the alternative investments group in London. Farrell said Dresdner hired Matto to help with preparations to start writing options on the performance of hedge funds. It expects to structure its first hedge fund option within the next couple of months (DW, 3/19). Matto resigned last Monday, is expected to start in a month, and could not be reached for comment.

Mortgage-backed securities players are skeptical about the usefulness of a new futures contract on the Current Mortgage Price Index, launched Friday by the Chicago Board of Trade, arguing that the over-the-counter market already provides sufficient, liquid tools that can also be more closely tied to current production. But according to DW sister publication Bond Week, at least one buysider sees potential for using the contract to make basis plays. Officials at the CBOT did not return repeated calls.

The Financial Accounting Standards Board has made a definitive decision concerning accounting treatment for warrants with a net-share settlement feature--they are to be marked to market. Some market practitioners thought net-share settled warrants were exempt from mark-to-market treatment because of a confusing passage in Statement number 133, the FASB's hedge accounting statement. "In hindsight, we wrote [the passage] badly," said Stephen Young, practice fellow in Norwalk, Conn. Net settlement, for example for an equity call option, is where the option is settled via the holder receiving a quantity of the underlying equal to the intrinsic value of the option upon exercise.

The silence was deafening last week in the dollar/yen options market as vol began retracing after steadily climbing upward for months. With spot off its recent high of JPY125, one-month vol fell to the high 12% region from the mid 13% region, said John Meyer, fx options trader at UBS Warburg in Stamford, Conn. Traders in New York said following the Bank of Japan meeting Monday and the U.S. Federal Open Markets Committee meeting Tuesday, uncertainty was taken out of the market. Demand for bullish dollar options trades against the yen abated for the first time in weeks, the traders added.

Yeoh Hong Nam, Asian currency trader at Standard Chartered in Singapore, has moved to Deutsche Bank in a new position as a general Asian options trader. Nam is responsible for trading currency options on Asian and G-7 currencies. He reports to Rig Karkhanis, head of emerging market currency trading. Deutsche Bank is looking to leverage customer flows and sees a strong future in Asian currency trading, according to a trader close to the firm. Nam could not be reached by press time. Karkhanis declined comment.