Dealers prep for year-end equity financing surge
Cost of funding equity derivatives bets blew out to 227bp in 2024 and is ticking higher again
Dealers are preparing for another surge in year-end equity financing costs, seeking to avoid a repeat of the extreme stress at the end of 2024.
CME’s adjusted interest rate total return futures (Air TRFs), which reflect the cost of financing synthetic exposure to the S&P 500, have climbed in recent weeks, with the January 2026 expiry hitting 109 basis points on October 31 – up from 65bp in June
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