Financial Institutions Selling These Products
A number of major investment banks have dedicated strategy index teams or are looking to establish one. These desks usually work under the exotic derivatives umbrella at each bank. As a result, it is difficult to establish exactly how much strategy index trading generates at each bank. Deutsche Bank is generally regarded to be the leader in this business with Barclays, RBS, Lehman (Now Nomura), Morgan Stanley, Goldman Sachs and UBS all looking to quickly establish themselves in this business. Considering that it is possible to charge up to 1.5–2.0% annually on these trades, with the usual charge being 1% running, the revenues on a typical 5-year strategy trade are 5–10 times that of a conventional exotic trade.
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