SS on BOE minutes

[Martinghoul]

Bruce/AN, maybe you can help me answer this question? One of the things I have been facing recently is the tightening of margin/collateral requirements in the OTC space. All the banks are aggressively overcollateralizing deals where they face hedge funds and the smaller the fund is, the more painful it is. Do you guys face similar actions from the exchange? Is that in the offing, you think?

 

[arabianights]

margin requirements have gone up considerably (I think it's LCH who decide what they are rather than the exchange or clearer but unsure about that) but I'm never close to using my margin overnight so doesn't affect me, similarly I'm not doing anything inter-contract.

 

[gooseman]

Bruce/AN, maybe you can help me answer this question? One of the things I have been facing recently is the tightening of margin/collateral requirements in the OTC space. All the banks are aggressively overcollateralizing deals where they face hedge funds and the smaller the fund is, the more painful it is. Do you guys face similar actions from the exchange? Is that in the offing, you think?

not really a surprise martin? what do you think?

i think we will see alot more business going on-exchange , especially with this CDS exchange that ICAP are looking at.

 

[brucemole]

yeah have seen margin requirements tighter recently but same as arabian i'm never close to my limit as i don't take outrights overnight.

Have noticed a few of the bigger lads geting caught out on margin when liffe settlements of butterflies and boxes are not realistic

 

[Martinghoul]

Thx... Howz life as a local? Have you been affected much by the sh1tshow?

 

[brucemole]

Got badly hit when it first broke, around August 2007, the Dec contracts collapsed and boxes and flies went to unheard of levels. Got caught out bigtime selling uzh.

Since then though it's been good tbh. As a local you can't really ask for much more than volatilty.

How are you finding it?

 

[arabianights]

I started ust as the **** storm was happening so found it good fun, was doing it just long enough to have the confidence to put decent size on during the emergency rate cuts so pretty content here

 

[Martinghoul]

One word: PAIN... Everything is way too volatile and too illiquid.

 

[gooseman]

volatility good-liquidity absolutely awful/

 

[arabianights]

out of interest are you the same ghol as on wilmott?

 

[Martinghoul]

Yes, why you ask?

 

[arabianights]

just checking

lurk there sometimes