<t>Two points emerge, one is that nobody is suggesting options at this stage, it will be a pure and simple swap market . Secondly the driving force must be that it costs 750bp round trip and maybe six months to deal in physical property. You would be mad to get a beta exposure to property by that ro...

What do you guys in Wilmott land think of the newly emerging market in total return swaps on UK commercial property indices? I've heard a variety of opinions ranging from them being the future of real estate to a niche market which will never generate any serious liquidity.

Ah yes.... the most expensive thing to map.... the stop-loss distribution!!!

<t>Thanks to you all for the feedback. Napier, delta hedging isn't an issue as these are options on FFAs (freight rate forwards) and the FFA market is getting a lot more liquid. The real issues are in modelling how the FFA market behaves and from what I can see it is going to be complicated.... comp...

<t>I'm just looking for a pointer in the right direction on freight options....Specifically options on tanker (wet-freight) forward freight agreements (FFAs)I've got a background in nice, well behaved, financial options where modified B-S is good enough in most situations but now I'm taking a look a...

<t>Whilst on this topic it looks like the UK Govt is taking steps to encourage the development of cash-settled property-index based derivatives. Initially this will no doubt be total return swaps but the future may see index options etc.Has anybody been looking into how to produce a term structure f...

I've heard that trading strangles is going to feature in a new ESPN2 extreme fighting show!Also that Bull spreads are traded in Chicago but only by basketball fans obviously the Bear spreads are aimed at football fans!

<t>On the gambling question....Yes.....and no in my opinion.A digital call on the non-farm payroll number with an overnight expiry does certainly look and feel like a bet, but then don't all digital options to some extent? However a three month vanilla call on HICP looks to me like an analogue of sh...

<t>Given the emergence of inflation swaps and options/forwards on inflation numbers (in the form of economic derivatives) is there any chance that a whole range of products that resemble the interest rate markets but are based upon inflation rates could emerge? So far the products are not "joined up...

There is of course that little Asian bond market.....Japanese Govt Bonds (JGBs) if you fancy simple yield.

Is there anybody out there that is looking at OTC (off exchange) shipping derivatives?If so is there much of a market and what are the prospects for growth?

<t>The Bhutan Society in London is looking for old copies (upto 6mths old) of The Economist to send to the tiny Himalayan kingdom where there is great demand for news from the outside world.Anybody interested in donating their old copies please let me know and I'll put you in contact with the societ...

So Idlingcloud are you hearing about economic derivatives being traded in a regular OTC way rather than the auction methods used by Deutsche and Goldman?

<t>Thanks for the feedback, when I first started the thread at the end of last year there seemed to be only a little interest in developing the next generation of credit derivatives e.g. default swaptions and credit spread options. However in the last couple of months this sentiment seems to be chan...

<t>The Deutsche / Goldman economic derivatives auctions have now been running since Oct 2002. Is anybody out there using them? Can they really be justified as a hedging tool or is this just punting with a respectable wrapper?Is there scope for the development of variations on this theme e.g. futures...