​Weekly: FTSE Russell Preps Variance Futures; Barclays, Elkhorn Team-Up, FIA Coverage

FTSE Russell is preparing to list three separate variance contracts on three separate exchanges. The firm is bullish on the DRW-sponsored structure, despite margining difficulties in the past. Meanwhile, Barclays and Elkhorn are set to start launching the first round of options-based strategies wrapped in mutual fund and ETF structures. The firms are also looking at UIT structures. They’re hoping the formats will attract pension and endowment-type investors to the strategies that would usually be sold in structured notes. In our FIA coverage, some market pundits are pointing out new risks being introduced in the derivatives markets due to margining requirements meant to take risk out, while exchange officials have questioned the need to have such a varied amount of OTM strikes on options contracts. They’re worried about the stress this places on market makers. Don’t miss our latest buyside commentary this week from Derivaguard’s Don Dale. He’s looking at the rapid growth in the equity derivatives’ end user customer base over the last few years.