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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.

General Re Financial Products (Japan) Inc. has hired Rick Puglisi, an interest-rate options trader at Lehman Brothers in Tokyo, as head of fixed income and structured products trading in Tokyo. Puglisi said the move provides a great opportunity, declining further comment.

Bankgesellschaft Berlin plans to use over-the-counter equity call options to structure two guaranteed products aimed at retail investors looking to hedge their downside exposure. Gerald Klein, assistant director in the structured products department in Berlin, said these products are a reply to investors' demands for protection against a market crash while maintaining exposure to indices as part of long-term savings plans.

Asia Financial Holdings, a Hong Kong-based financial holding company with HKD14.25 billion (USD1.8 billion) in assets, plans to start writing covered equity calls in the coming months to generate premium. James Lee, investment analyst, said the company will initially look at using exchange-traded instruments but will consider using over-the-counter derivatives if pricing and liquidity are competitive. Lee believes the strategy will be profitable because upside potential in the U.S. equity market is limited in the near term. The company is talking to Morgan Stanley Dean Witter and Goldman Sachs as potential counterparties. Spokespersons at the securities firms did not return calls.

Jeff Zajkowski, managing director, corporate equity-linked products marketing at Goldman Sachs in New York, has joined Merrill Lynch in New York. A spokeswoman at Goldman declined comment. Officials at Merrill did not return calls for comment.

DuPont Teijin Films, a joint venture between science and technology giant DuPont and Japanese chemical producer Teijin, is considering using derivatives to hedge foreign exchange and interest-rate risk on its USD500 million loan portfolio. The company, which was formed in January 2000, believes it is now ready to take a more sophisticated approach to managing fx and interest-rate risk.

Standard Chartered is talking with four possible counterparties about entering an interest-rate swap with a maturity of up to seven years. "It's in the pipeline," according to Madhav Shankar, manager of derivative products in Mumbai. He added that corporates in India are looking for longer-term swaps to hedge outstanding balance sheet liabilities. Shankar believes the market for five to seven-year interest-rate swaps will develop rapidly, within the next few months. He declined to name the potential counterparties.

The Commodity Futures Modernization Act of 2000 authorizes trading, on a delayed basis, stock futures, meaning single-stock and narrow-based stock index futures, and options on such futures. As a result, the tax laws were also amended to make sure that stock futures would not get a tax advantage over equity products currently traded in both the over-the-counter and exchange-traded markets. With the CFMA changes to the tax laws, the tax treatment of stock futures is made similar to the current tax treatment of OTC and exchange-traded options on single stocks and narrow-based stock indices.

A unit of San Francisco-based Pegasus Aviation Inc. plans to enter an interest-rate swap on the back of an upcoming USD1.127 billion bond issue backed by aircraft leases. In the securitization, the leases are sold to a special purpose vehicle, PALS Holding Co. III, which in turn issues the bonds, said Chandra Gopinathan, associate analyst at Moody's Investors Service in New York. Moody's is rating the deal. Ratings on the tranches are expected to range from Ba2 to Aa2.

Credit protection on U.K. rail operator Stagecoach is expected to fall in price after the company reportedly won a new franchise to run trains in the U.K. A London-based trader said before the rumor began circulating, bond investors and banks with loan positions had been snapping up protection, largely because the company issued a profit warning earlier this month. The franchise, which would allow Stagecoach to run trains in the southwest region of England for 20 years, would give the company a guaranteed source of income. The trader estimates this could push pricing on five-year credit default swaps on Stagecoach to the mid 300 basis points range from 410bps as soon as the information is confirmed.