Abrupt dividend swap sell-off followed by slow retrenchment

business graph — May 7 saw sharp losses in dividend swaps

Richard Jory
28 May 2010

Tweet
Facebook
LinkedIn
Save this article
Send to
Print this page

The dividend swap market recorded its most acute loss on May 7, providing an open door for hedge funds to record healthy profits. The market in dividend options was down 12% on the day and as much as 15% at one point, according to a banker in London. “This sudden abrupt move was due to adverse factors: we saw a few hedge funds deleveraging and derisking their books at the beginning of the same week, and we had a mini stock market crash in the US on Thursday,” the banker says.

Derisking may have

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to print this content. Please contact [email protected] to find out more.

You are currently unable to copy this content. Please contact [email protected] to find out more.

You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]

You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]