Macro Tourist

The Macro Tourist Finds A Large Mispricing…

"I love trades where I understand the mechanics of a large mispricing".

Read more from The Macro Tourist Imagine you a trader sitting on a structured products desk.  The Great Financial Crisis hits. Suddenly clients are keenly aware of the downside risks in the market.  How do they respond? By demanding products that limit their potential loss. So what do you do? Well, when the ducks quack, you feed 'em. And feed them, they did. Over the past decade, dealers have issued a monstrous whack of Equity Index Linked Notes. From a Reuters article earlier this year: Sales of risky equity products boom despite recent bank losses Sales of structured products are booming again in a key region for these complex, equity-linked securities, just months after banks reported hefty losses from this kind of activity when markets slumped in late 2018. Investment banks make hundreds of millions of dollars in revenues every year selling structured equity products to retail investors throughout the world. Building complex equity-linked products and selling them to retail investors through wealth management networks forms a cornerstone of most large banks’ equity trading operations. The top 12 investment banks made US$14.4bn in equity derivatives revenues in
Subscribe or log in to read the rest of this content.

0 comments on “The Macro Tourist Finds A Large Mispricing…

Speak your mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Skip to toolbar