Credit Derivative Swap Index Tranche: School-To-College

imagesWe all have heard of CDS (Credit Derivative Swap) But, how many of us have the real idea & concept of CDS cleared with us? I guess very few people. So, here we are ready with our today`s blog which will talk about CDS, its basic concept & origin with its structurally enhanced form/product known as CDX-“Credit Derivative Index Tranche” .

Meaning: In finance, a credit derivative refers to any instrument and technique designed to separate and then transfer the credit risk of the underlying loan. It is a securitized derivative whereby the credit risk is transferred to an entity other than the lender. Continue reading “Credit Derivative Swap Index Tranche: School-To-College”

2012 Most read post – The JP Morgan series

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Good morning last day of 2012 checking the mood of market well. This is the most news driven market we’ve had since the Greece story. You gotta be quick on your feet.

Thought of sharing the post that attained maximum readers on a day. It was May 11 2012 when the leading financial media broke the story on Thursday night about the $2bn trading loss on credit derivatives trading, which chief executive Jamie Dimon blamed on errors,sloppiness and bad judgement” and warned “could get worse”. 
Continue reading “2012 Most read post – The JP Morgan series”

Rogue Trading or The Rogue Banks

Yesterday was going through an article on Bloomberg that  How UBS Could Survive a Guilty Plea in the Libor Scandal, imagesreading forward the article says the settlement may include $1 billion in fines, and the New York Times adds that a guilty plea on criminal charges may also be part of the deal. That second piece is big news: It would make UBS the first big bank to plead guilty in more than a decade.

I did post almost a year back, but when I see today the scandals are now more in public compare to last year and the post holds true to the words. They are much more bigger now Continue reading “Rogue Trading or The Rogue Banks”

Emerging Markets and Proprietary traders :-

 

Takings from my last post  A Prop Trader or Rogue Trader and my past posts on the same topic The Rogue Trader or The Rogue Banks

and TO BE A ROGUE TRADER would like to share few more views over them. As I reveled in the past that prop trader don’t trade on behalf of clients but they use institution own money to trade.They speculate and their focus are is emerging markets.

The two principles on which they work :

Extended Collateral Term Repo

On6 December 2011Bank of Englandposted on its website information about the new financial instrument, which main goal is to preserve liquidity during the shortage  as to save the financial stability of the country.

“In light of the continuing exceptional stresses in financial markets, the Bank of England is today announcing the introduction of a new contingency liquidity facility, the Extended Collateral Term Repo (ECTR) Facility. This Facility is designed to mitigate risks to financial stability arising from a market-wide shortage of short-term sterling liquidity. There is currently no shortage of short-term sterling liquidity in the market. But should that position change, Continue reading “Extended Collateral Term Repo”