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Equities derivatives divisions, particularly flow or high-volume products such as delta one, are being bolstered by new hires and resources from other areas, such as cash equities, where margins have been hit be fierce competition and thin trading volumes.
Steven Downey, head of equities trading for Europe, the Middle East and Africa for Nomura, said the bank had “recently made several hires into the derivatives business” and added that “we still have more to do“. The hiring reflects the increasing appetite for hedging instruments amid lower volatility, particularly equity options and delta one products. Delta one desks use exchange-traded funds, swap products and other derivatives to replicate the performance of an underlying index without a client needing to buy the securities that the index tracks.
Structural changes to derivatives markets, including the adoption of central clearing, which is expected mostly to affect flow businesses, has also prompted recruiting. Peter Smith, a partner at executive search firm, Heidrick & Struggles, said: “Banks are looking to improve the infrastructure around flow products – such as delta one – in response to regulation, which is driving hiring activity”.
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