​Daily Wrap – HK Warrants Drive SS Trading; U.S., Europe Skew Plays Open

Turnover in warrants has remained high in Hong Kong as retail investors increasingly enter into bullish structures on single stocks, but the increased volume has led to the dislocation of skew in single stocks increasing. This has opened up opportunities for hedge funds to profit from the supply/demand imbalance. In Europe, we look at how investors are exploring ways in which to monetize the skew differential between the equity indices in the U.S. and Europe, following the approval of bailout measures agreed between Greece and its creditors. In the U.S., CBOE is out with a raft of new performance-based indices.