Capitalab has recently been acquired by Capitolis. This provides our network expanded optimization and compression solutions allowing opportunities to manage counterparty exposures across various rates, FX, and credit workflows.
Companies need derivatives more than ever to hedge their risks. The extremely wide variety of derivatives products also enables financial institutions to speculate on different markets in an efficient and effective way.
Because it addresses these needs, the derivatives market has reached a massive scale. In 2020, the total gross notional value of outstanding over-the-counter (OTC) derivatives contracts stood at US$607 trillion, with US$73 trillion for exchange-traded contracts, according to the Bank for International Settlements.
But although derivatives remain highly versatile and useful, users face greater challenges than before. The market for both listed and OTC derivatives has undergone a seismic change because of greater regulation across the world, including the European Market Infrastructure Regulation and similar rules from the Commodity Futures Trading Commission in the US. This has reduced risks for derivatives users and for the global financial system as a whole. However, it has also increased complexity and cost, including the capital cost of holding derivatives. Meanwhile, institutions are still faced with risks that occur because of a mismatch between the derivatives they use and the risk they are trying to hedge.
Capitalab was set up in 2015 to confront these challenges for derivatives users. Beginning with the Swaptioniser®, a compression service for swaptions, we have devised a range of products that reduce the cost and complexity of using derivatives, and increase their effectiveness.
Our talented team includes experts in trading, quantitative analysis and technology. Together, they are able to offer creative, tailored solutions to our client’s problems, however complex.
We also partner with the derivatives industry as a whole to promote sustainable growth and resiliency in this ever-changing and ever-exciting marketplace.
