TriOptima, based in Stockholm, ran 12 trade-compression cycles in the first three months of the year, tearing up $5.5 trillion of US and European index trades, tranches, emerging market deals and transactions based on the Markit ABX index of asset-backed securities. That represents 78.6% of the $7 trillion reduction in notional CDSs outstanding resulting from trade compression carried out across the industry in the same period.
Last year, TriOptima ran a total of 50 cycles, eliminating $30.2 trillion in notional outstanding. The single-name CDS compression service offered by Creditex and Markit eliminated $2.3 trillion notional in 2008, and the move towards standardised contracts is set to speed up the compression process. According to the Depository Trust and Clearing Corporation's Trade Information Warehouse, there were $28.5 trillion in outstanding CDS by mid-February this year, of which half are single-name trades.