Derivs - Equity

The ESG derivatives market expanded further this week, as Cboe Global Markets opened trading for its new S&P 500 ESG index options.

The violent sell-off across financial markets this spring turned many investors’ positions upside down. Those without proper hedges in place were at best left embarrassed and at worst forced to shut up shop. Despite central banks once again intervening, plenty are finding reason to be cautious. Ross Lancaster investigates what lessons, if any, market participants have learnt from the meltdown.

ESG derivatives have been on the development fast track this year as product creation has swept from equity referencing contracts through to other asset classes. Ross Lancaster reports on the next steps the market must take to reach maturity.

GlobalCapital is delighted to announce the winners of its 2020 Global Derivatives Awards.

The European Commission on Tuesday gave the derivatives clearing industry a lifeline by granting an 18 month equivalence decision that will allow European firms to keep using UK central counterparties.

A push towards harmonising data and reporting standards in ESG finance is gaining momentum and is a much-needed move in the development of the market. This was the message from panellists at GlobalCapital’s Sustainable and Responsible Investment Capital Markets Virtual Forum this week.

High-frequency traders have fiercely resisted efforts by derivatives exchanges to bring in delaying measures, such as speed bumps, to their venues. But at Eurex, one such passive liquidity programme (PLP) is proving its critics wrong.

Since the Covid-19 crisis began, inflows to funds that use derivatives to offer protection against market drops have spiked as investors look for greater certainty in their returns.

Barclays has appointed Todd Sandoz and Paul Leech as permanent co-heads of global equities.

Traders across asset classes are beginning to position in size as the US presidential election approaches, with an expected tight run-off making it very hard to time the market.

Derivatives counterparties breathed easy in March when the Basel Committee on Banking Supervision and the International Organisation of Securities Commissions announced a year’s delay in the introduction of initial margin rules. But in Europe — with the deadline already passed — legal confirmation has still not appeared.

The European Securities and Markets Authority (ESMA) has said that making sure staff could work remotely hindered the ability of financial firms to work on regulatory and IT projects, in a final report calling for the implementation of a set of rules on settlement discipline — including on mandatory buy-ins — to be delayed until 2022.