The Americas
Hedging playbook goes ‘out the window’ as Trump tariffs slam markets
Dispersion, put spreads and VKOs paid off as stocks plunged, but outlook remains wildly uncertain
Tariffs volatility prompts rush to re-hedge EUR/USD options books
Banks left scrambling to buy vol as spot surged beyond expectations
Corporates hamstrung in response to FX volatility
Restrictions around hedging programmes leave US firms struggling to adapt to dollar weakness
Commodity price insurance, an alternative to swaps?
ChAI founder eyes metals and power for expansion after selling first hedges for recycled materials
FX traders revel in March Madness
Chaotic Trump policies finally bring diversity to flows – to the delight of market-makers
AmEx derivatives book grows on interest rate swap surge
Receive-fixed swaps dominate hedging portfolio as clearing rate spikes
Op risk data: Crypto hack bites Bybit; fat-finger flurry at Citi
Also: OKX gets AML scold, UK motor finance fiasco revs up. Data by ORX News
JP Morgan QIS notionals hit $100bn
Dealer sees 15% annual growth in ‘imperfect’ notional measure, eyes rates and FX for next phase
‘Trump slump’ hedges rise on rate cut fears
One dealer notes fivefold increase in number of clients hedging against possibility of faster rate cuts
Disappearing dealer gamma spurs wild stock swings
Stock market selloff leaves dealers perilously close to peak short gamma positioning
SRT markets kick US banks’ caution to the kerb
Market for capital relief trades continues apace despite US banks’ reluctance to offer leverage
Hedge funds flock to US swap spreads on SLR easing talk
‘Trade of the year’ sees investors position for shrinking negative basis as Treasuries predicted to outperform swaps
Market knee-jerks keep VAR models on their toes
With a return to volatility, increased backtesting exceptions show banks’ algos are stretched
US dealers tally most VAR breaches since mid-2023
Market turmoil in Q4 blindsides models at systemic and regional banks alike
Citi rolls out revamped SDP in emerging markets
Unified API will boost electronic pricing and automation for restricted currencies, says bank
Trump’s tariff threats stress London gold market
Cost of funding customer positions has shot up 10,000% as deliverable supplies shift to New York
Nasdaq leads push to reform options regulatory fee
Proposed rule change would pare costs for traders, raise them for banks and defund smaller venues
AI and Trump tariffs spur hyped-up dispersion trade
Popular vol strategy pays off in January despite highest entry costs on record
Cool heads must guide financial regulation of climate risk
Supervisors can’t simply rely on ‘magical thinking’ of market discipline, says Sergio Scandizzo
Tariff news ‘ping pong’ gives FX options desks a headache
Dealers say Trump’s shifting deadlines sparked weekend trading rush and made it hard to monetise flows
Funds tap options on FX vol amid tariff disruptions
Dealers say vanillas, digitals and knockouts on realised vol increasingly used to navigate Trump news flow
Hedge funds could look to bypass UST clearing mandate
New paper argues that repo users might relocate offshore or use other means to avoid US Treasury clearing dragnet
US block size changes reveal trillions in swaps trading
Fears of information leakage force some large buy-side users to adjust execution strategy
Trump’s tariff threats fuel corporate FX hedging revamp
Treasurers mull options and longer-dated hedges in face of mixed signals on extent and timing of measures