MarketVoice News
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Trading Volatility – A Fund Manager’s Perspective on Index Options
Parametric Portfolio Associates is a sophisticated user of the U.S. options markets. The Seattle-based asset manager, which currently has $230 billion in assets under management, has been using derivatives for more than 30 years to deliver investment solutions to pension funds and other investors looking for alternative sources of return. In this interview with MarketVoice, two Parametric executives talk about how they use equity index options for one strategy in particular. This strategy is based on extracting the "volatility risk premium" from the options market by systematically selling puts and calls. The key to the strategy is the historical tendency for options buyers to pay a premium to options sellers in return for protection from volatility. To put it another way, the level of volatility implied by the pricing of options is typically higher than the actual level of volatility. Options sellers profit from the difference, so long as they manage the risks effectively.
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Charity Honors Big-Hearted New Yorker Lost on 9/11
Seventeen years ago, the world was horrified when over 2,700 people died in the Sept. 11, 2001 terror attacks on the World Trade Center. While memories of 9/11 have faded for some, there are many people within the New York financial community who continue to dedicate their time and energy to honoring the victims of those attacks.
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SocGen expands European investment products business with Commerzbank deal
In July, Société Générale reached an agreement with Commerzbank to purchase its Equity Markets & Commodities business, a move that will bring additional customers into the French bank's derivatives business and strengthen its footprint in Germany.
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Startup Raises $32 Million to Fund Blockchain for Derivatives
Financial technology firm Axoni is proving that the promise of blockchain may live up to the hype. Axoni, a provider of enterprise blockchain technology that was founded in 2013, raised $32 million in a Series B financing in August. The funding round was led by Goldman Sachs and fintech-focused venture capital firm Nyca Partners. Other investors included well-known venture capital investors Y Combinator and Andreesen Horowitz as well as financial firms such as Citigroup, J.P. Morgan, NEX Group and Wells Fargo.
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SGX Targets OTC FX with Flexible Futures
FX futures trading is exploding at the Singapore Exchange, with volumes more than double last year's level, as the exchange benefits from structural changes in the FX market that are driving more business to central clearing. Recognizing this trend, the exchange is rolling out a new version of its FX futures contracts that provides more flexibility for OTC traders. The contracts has the same security and capital efficiency advantages as standard futures, but can be traded bilaterally with tailored expiration dates.
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Photo Gallery - IDX 2018
Photos from FIA's 11th annual International Derivatives Expo conference in London from June 4 to 6, 2018. FIA held sessions covering a broad mix of topics and strategic issues in the cleared derivatives industry, from the fintech developments in all parts of the value chain to the direct impact of MiFID II.
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Special Report: U.S. Treasury issues recommendations to promote fintech innovation
On July 31, the U.S. Treasury Department released a report on financial technology and innovation. The report is the fourth and final in a series drafted in response to an executive order issued by President Trump in February 2017. The 200-page report describes the dramatic advances in financial technology in recent years and makes more than 80 recommendations to promote innovation in financial services.
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