​HSCEI/HSI Corridor Variance In Play

Hedge funds have been buying corridor variance swaps in the HSCEI/HSI given the range bound nature of spot and the less likelihood of volatility gapping out in the two indices. The trades, which allow index trading desks to offload HSCEI exposure, are becoming popular among funds as the spread you can capture from corridor variance swaps appears attractive on an historical realised volatility basis over the last five years.