Despite OTC Costs Increasing, Many Institutional Traders Haven’t Examined Listed Derivatives

Clearing institutional currency (FX) trades can cost up to 70% less using listed derivatives as opposed to over the counter (OTC) options when new margin rules take effect, a recent Greenwich Associates study points out. But the report notes a “surprising” development in that only one in five institutional traders have begun to examine the cost impact of OTC options as Uncleared Margin Rules (UMR) bear down on prime brokers, impacting institutions with exposure of $8 billion or more.

Q1 hedge fund letters, conference, scoops etc

One advantage OTC derivatives have had over their listed, exchange traded cousins is that...