RBS shifts the inflation derivatives market up a gear
Institutional hedging requirements have provided the impetus for development of the UK inflation options market. RBS Global Banking & Markets (GBM) has responded by refining the design of the instruments and publishing price screens to ensure transparency and promote liquidity. Mark Greenwood of inflation options trading at RBS GBM, surveys the scene
A promising start
The UK inflation derivatives market will shortly enter its teens and it is showing much potential. Its younger siblings, the European and US inflation markets, have drawn much of the attention in recent years with their vibrant market for structured inflation notes. While these structured notes have become evermore exotic, the UK inflation options market has raced ahead in options volume growth. This evolution has been driven by the needs of investors and borrowers, creating natural two-way option flows. In turn, enduser UK investors and borrowers have become more experienced and more comfortable transacting inflation options.
- RBS shifts the inflation derivatives market up a gear (PDF, 424KB)
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