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Derivatives Week Learning Curves

  • Trends In Linear Payout Structures ­ Part I

    Recently, there has been an increase in straight payout structures being priced and traded in the interest rate derivatives market. Unusual market conditions and a general aversion to conventional exotics has helped these trades evolve relatively quickly. Although they are very complex trades to value these simple exotics offer very clear and straight forward payouts and allow speculation on or hedging of very specific types of risk. Often the more simple the payout, the more complex the initial pricing and modeling can be.

  • FINRA Provides A Reverse Convertibles Reminder

    In response to controversial sales practices relating to reverse exchangeable securities (reverse convertibles), the U.S. Financial Industry Regulatory Authority recently issued two documents--a regulatory notice and an Investor Alert--on the instruments.

  • The Dante Decision: A Legal Analysis

    A recent decision in the U.S. Lehman Brothers bankruptcy case held that investors in a collateralized debt obligation called Dante did not have the right to jump ahead of Lehman to get repaid, contradicting an English court decision and raising questions about how similar deals will be treated.

Previously in Derivatives Week

  • CME/Citadel Restructure JV

    The joint clearing venture between CME Group and Citadel Investment Group has been restructured to focus solely on clearing, shelving the Citadel-led electronic execution platform for credit default swaps trading, CMDX.

  • Hawaiian Fund Lands More Ex-B of A Traders

    Olivier Droulers, a former head of index flow trading at Bank of America Merrill Lynch in London, and Emmanuel Slezack, who took over when Droulers was made redundant in March, have joined Hawaiian hedge fund Evolution Capital Management.

  • Barclays Restructures USD12.3B In Toxic Assets

    Barclays Capital is restructuring USD12.3 billion of structured credit assets through a sale to Protium Finance, a newly created Cayman Islands fund. Protium will pay C12 Capital Management—a new management company led by Stephen King, former head of Barclays’ principal mortgage trading group, and Michael Keeley, member of Barclays’ management committee covering European financial institutions—USD40 million a year to manage the assets.

  • Meteor Offers Dual-Linked Structure

    London-based Meteor Asset Management today launched what it calls its Prima Platinum Plan, a five-year investment with returns linked to the FTSE100 and the S&P500.

  • Indonesian Master Translation On Deck

    The International Swaps and Derivatives Association has commissioned a Bahasa translation of the 2002 ISDA Master Agreement.

  • Calif. AG To Investigate Credit Raters

    Edmund Brown, the attorney general of the state of California, has announced the launch of an investigation into the role credit-rating firms may have played in the current crisis.

  • Citi Looks To Unload Smith Barney Stake

    Citigroup is looking to get rid of its 49% stake in the Morgan Stanley Smith Barney joint venture, according to Vikram Pandit, Citi’s ceo.

  • Lawmaker Looks To Expedite Lehman Claims

    Rep. Gregory Meeks (D-N.Y.) is spearheading an effort to speed up the settlement of claims by Lehman Brothers creditors.

  • ICE In Pact To Automate OTC Trading

    IntercontinentalExchange and ConvergeEx have entered into an agreement that will integrate ConvergeEx’s order management system with the ICE’s platform for over-the-counter derivative trading.

  • BIS Backs Standardized OTCs

    The Basel Committee on Banking Supervision has thrown its support behind the standardization of derivatives as a way of using risk-mitigation techniques to reduce systemic risk.

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Q&A

    Patrick Pearson Exclusive Q&A

    Patrick Pearson, head of financial markets infrastructure within the European Commission's internal market division in Brussels, told Derivatives Week in an exclusive interview with London reporter Rob McGlinchey that the Commission is collecting data from dealers and end-users with a view to drawing up a benchmark of bid/ask spreads. The aim is to help shave users' hedging costs and determine how expensive it would be on top for users to clear their trades.

Conference Coverage

    Regulators Push For OTC Trading Tape

    Regulators want to see a tape for capturing post-trade information on over-the-counter derivatives, akin to what is used in the equity markets.

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