Dear all,I want just to point out some problematics that rises from bespokes Tranches. Just to recall the market "standard" (May I call it like that??). The first question is what correlations should be used to price the bespoke tranche? the market is using some method of mapping on the available Correlation Smiles (Different Market and different Maturities). I mean that they seek a Equivalent strike in Bench Market That fits some risk criteria regarding the underlaying Portfolio. But some problems are rising when using these methods:1/ Some portfolio that are risky (barbell) and mapping on HY market must be avoided.2/ There are some cases (on some mapping method) that no solution can be found specially on Equity tranchelets (on wide portfolio).If any have an idea to which standard are the market is taking. Please Let me know!Thanks,

There is no standard. Every dealer has a different method. Every one of these methods is flawed. But who cares...the deals are marked to model (and the hedges are calculated based on the same models). As long as there is no crisis, everyone stays happy (clients, traders, risk managers, etc)

Pardon the ignorance of my question, but what is a "bespoke"?What on earth is the etymology of this term?

Bespoke means made-to-measure and comes from British "bespoke" tailoring.Bespoke in this case means custom synthetic CDO tranches that have different portfolio constituents from iTraxx and CDX and different attachment/detachment points etc.

Thanks for your view,Gmike2000,1/I don't really agree with you. Because Iheard that dealers are contributing on a monthly basis in pricing bespoke on totem. Which theoretically give them a view on their pricing. 2/ For bespoke there is no standards! Okay! but what about smile interpolation which is more important (building block) for bespokes pricing. May be can I rephrase my question: Do you think that dealers are using models based on Loss Surface Generation for extra/interpoltation??Thanks,