Concerns over conflict of interest in large structured product hedges

Multi-million-pound hedges can move the market prior to strike date

Financial figures
Last-minute option buying could boost price of the underlying

Bank traders hedging their structured product exposure have the capability to move the level of the underlying stocks or index by placing hundreds of millions of pounds worth of options trades just before a structured product strikes.

It is a conflict of interest that has not necessarily been addressed by the UK's financial regulator, the Financial Conduct Authority (FCA), says Andrew Brogden, co-founder of financial services and product provider Econumy in London. "I'm not sure this is somethin

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