Accumulated risk
Volatile equity markets have caused problems for trading-book positions of dealers with large retail structured products desks. But some are still managing to shed their risk, notably one dealer via an innovative kurtosis trade. Christopher Jeffery reports
The issuance of structured products to high-net-worth individuals and retail investors - as well as to corporates and hedge funds - had become one of the most lucrative businesses in financial services in the region in the past five years.
Dealers, which typically provide the hedge for these products, have made hundreds of million of dollars from this business. The most heavily traded transactions are accumulators - which allow investors to buy stock at below-market prices, as long as the price
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