A new dawn
The birth of one tradable index – iTraxx – supported by 20 different banks is being compared to such cornerstones of the financial markets as forwards in FX or futures on Eurodollars. Laurence Neville reports on the prospects for this new instrument
Key points
•The merger of iBoxx and DJ Trac-x to form iTraxx is being heralded as a breakthrough moment for the tradable index market.
• Increased liquidity is the main advantage of one index – and strong trading levels on iTraxx have demonstrated this.
• Pension and mutual funds are expected to adopt iTraxx as a benchmark.
On the longest day of the year, the planets finally aligned for what seemed like credit’s most anticipated match-up – the merger of the two
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