Today is the spring equinox in the Northern Hemisphere. Bonuses have been paid and bankers and traders are spreading their wings. Morgan Stanley’s London equity derivatives traders have been doing some flapping.
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Morgan Stanley isn’t commenting but we understand that at least six people have left the bank’s equity derivatives business in recent weeks.
They include: Akrem Bahri, a VP in corporate equity derivatives trading; Stanislas Dumas, a VP in single name exotic equity derivatives trading; Hauje Mund, an executive director exotic equity derivative index trading; Sabrina Namoun in corporate equity derivatives trading; Yifei Zhong, a dispersion (single name) trader; and Riccardo Marin Javega, a junior on the dispersion desk.
The reason for the dispersion of Morgan Stanley’s traders is not clear. There are suggestions that they have been lured by hedge funds. At least one – Bahri – is understood to be joining the Qatar Investment Authority.
Dispersion trades have been popular this year. The Financial Times noted last month that banks have were using them to profit from large swings in the price of individual companies versus low volatility of overall indices. The trades involve selling index volatility and buying single-stock volatility. The strategy will hold unless volatility climbs across the board, as has been slowly happening since war broke out in the Middle East on February 28th.
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