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Derivatives Ninja and The OTC Space


Noah Melnick, Derivatives Ninja, Even more standardized IRS??? here.

With the advent of Truex as Bill Hodgson skillfully blogs about here and the publication by ISDA and SIFMA of MAC (or “market agreed coupon”) IRS forms, are we moving even further away from a world in which bespoke derivatives play an essential role?  If we assume some role will always need to be fulfilled by bespoke derivatives how small can that role shrink to be before it becomes untenable to function in such an environment and everything simply becomes standardized or falls away?  I’m curious to hear your thoughts.

Bill Hodgson, The OTC Space, Standardised OTC swaps (TrueEx) th launch within weeks –, here. I must have seen this blog before.

Sunil Hirani who created CreditEx, now part of ICE, has built a new trading market TrueEx, and registered as a Designated Contract Market (DCM) with the CFTC.

TruEx will offer trading in rate swaps but using standardised terms:

  • Standard tenors: 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 15, 20, 25, 30 years

  • IMM start dates in March, June, September and December

  • 3M LIBOR rate, quoted the day before each IMM date

  • $5m notional minimum and multiples of, for the on-the-run contract

  • $1m minimum notional for off-the-run



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