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Shin Kong Life Insurance Co., one of Taiwan's largest life insurers with assets totaling over TWD528 billion (USD15.29 billion), is planning to make its first credit derivatives foray for its USD3 billion fixed income portfolio. "We've been watching the credit market," said James Kao, manager in the international investment department in Taipei. Kao explained that after a restructuring effort in the coming months, the insurer will move to mark-to-market accounting and likely look for alternative products for its fixed income portfolio, such as credit-linked notes. Kao noted that once systems and accounting policies are set, the insurer could purchase the products within 12 months.

UBS is developing an automated trading system for equity derivatives. Stephen Fulford, joint head of risk management products in London, said the platform will eventually allow clients to trade on-line, receive confirmation and entry into the risk-management system. The firm can currently post prices for stock options on-line, but cannot trade and carry out the operational procedures.

Derivative traders in Thailand expect a surge of hedging activity on the back a flurry of bond issuance which is about to hit the domestic market. "Everybody's getting ready to issue bonds," said a trader at Standard Chartered in Bangkok, noting that most international houses in Thailand have been lining up mandates. Market officials estimate that with possibly over USD1 billion in bonds expected to hit the market in late September and October, activity in the interest rate swap market will increase as many issuers will look to swap fixed rate baht deals into synthetic floating rate U.S. dollars. "This is exciting stuff," said a dealer at Citigroup, noting that so far this year issuance has been subdued as rates moved lower, with only a handful of deals so far.

Two more derivatives staffers have left Commerzbank Securities in New York amid the German firm's attempt to patch up the holes. Henry Flowers, senior structurer on the cross-asset structuring desk, will join Merrill Lynch in an equity derivatives structuring role. Meanwhile Judith Erdman, who worked in third party distribution for high-net-worth individuals, is taking a similar role at Fidelity Investments, said an official familiar with the plans. Flowers and Erdman could not be reached. Ed Mitchell, spokesman in New York, declined comment.

Typically the payout of an option at maturity is linear with respect to spot. However, non-linear payouts can offer either enhanced leverage, or a better hedge for a non-linear underlying exposure. Pricing of such structures can be done by: * Monte Carlo simulation

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.