Credit options: Arrested development

Credit options have been held back because many clients are unable to use the CDS on which the bulk of them are based. But with a convincing argument for using cash bond options, the market might still grow, as it has for FX or rates, writes Laurence Neville

The imminent arrival of credit options as a widely used tool in the credit investors' arsenal has been repeatedly forecast over the past few years. Only now however, can the market for these instruments - which give users the right but not the obligation to buy or sell bonds or credit default swaps in the future - be said to be even partially established. Even now, it remains yet to fulfil early expectations of take-up - yet there is new and growing evidence that institutional investors are