I've been looking for brokers that might make a market on swaps to non-high-net-worth individuals, for notional amounts a fraction of US$1 million, but such a thing not only seems unpopular, but almost completely unavailable. Are any swap securities (interest rate, currency, cancellable, etc.) available to the average individual investor, might these be coming soon, or are there fundamental reasons we might not see them, such as:1.) Financial planners have not yet educated enough of the public on the advantages of these securities.2.) Tough regulations in the US and UK would make these too difficult to sell.3.) The margin/credit requirements probably wouldn't work out in a low-fee account.4.) For a bank warehousing swaps with average notional amounts in the hundreds of millions of USD, these "rounding error" level swaps aren't worthwhile.5.) Mortgage banks haven't been sold on the advantages of converting their existing serviced mortgages with swaps instead of potentially losing the servicing account altogether.Thoughts?

Whats the matter with futures? Unless you dont want the mark to market

I believe that interdealers brokers would like to deal with non-high-net-worth individuals, but they cannot because if they did, they would get immediate retaliation from their banks!A simplified chain at the moment consists of the banks that sell swap and other interest rate derivatives to morgage providers, hedge-funds, mutual-funds, and other minor companies.Then the banks either buy/sell swaps directly to other banks or by using a broker, to which they pay a brokerage.If brokers started to open the market to - say hedge funds - the banks would feel threatened because they would lose that business, and would retaliate not showing the brokers their prices anymore, and the broker would be immediately out of the market.In my modest opinion, banks shouldn't be brokers, but should try to make money using their experise to take risk. Unfortunately, I see more and more banks going to the opposite direction and becoming at all effects brokers.Since banks are already invading the broker's market, and are dealing more and more directly with other banks, I expect that in the future the brokers won't get much business anymore from banks, and they will then start to open the market to hedge-funds and similar type of companies.gc

QuoteOriginally posted by: OilTrdrWhats the matter with futures? Unless you dont want the mark to marketActually, somthing like futures would work well and resolve the credit risk component. I think the bigger problems that it doesn't address are 1.) that the liquidity is so heavily concentrated in the nearest term futures, and 2.) the term structure of futures prices may not meet the needs of the customer. Such a product should essentially be offered as a loan collateralized by its own deposit, and a mark-to-market feature might be fine if it meets these other needs.Say you have a European assigned to live and work in Tokyo for two years, and is worried that the Yen they earn and save will be worth fewer Euros by the time they take them home. Wouldn't it be nice to offer a product that, say, locks in current par-rate conversions of, say 100,000 Yen per month into Euros to hedge that individual's savings? I can imagine several similar consumer needs, especially with those who are not so much travellers, but would like to swap out interest rate or prepayment risk on other loans.