​Daily Bulletin: Wednesday Nov. 12

Hedge funds were seen buying call spreads on the Nikkei after reports revealed Japan’s Prime Minister Shinzo Abe is considering a snap election next month if he decides to delay the consumption tax hike increase. Traders noted the funds were buying call spreads and call ratios with two-to-four months in tenor on the underlying. In the US, smart betas have been talked up this year as sellside firms try to market greater volatility control, but one pension fund manager told EQDerivatives the strategies may help the funding profile of a fund, or the risk allocation, but are sometimes less adequate in handling vol. We also have a Denver boutique with a novel hedging strategy for short volatility funds, and Jared Woodard, senior equity derivatives strategist at BGC Partners, explains the link between President Barack Obama’s Title II “net neutrality” announcement and significant selling in the telecom sector this week.