Commodity Exotics

Spectron’s commodity exotics desk looks to trade any non-vanilla products within the commodity space. The desk helps to facilitate structured products and complex risk trading deals, in essence allowing clients to manage correlation risk between multiple commodity products. 

The desk specialises in Dispersion baskets and was the first broker to bring these products into the inter-dealer broker marketplace, transacting over $5 billion worth since 2005, when the first deal was done. Dispersion allows traders to run very large gammas on an individual underlying, and exposes a book to correlation – the strategy can be, and generally is, sold to investors.  

The desk is also active in single asset exotic products, primarily in the form of barrier options on WTI crude. These will include knock-in and knock-out options, one touch barriers and variance swaps – the desk also helps traders to back in and out of currency risk via quanto products. 

Commodity Index options on the major commodity indices are another major focus. The desk can provide liquidity up to 10 years out on all GSCI (Goldman Sachs Commodity Index, and sub-Index) and Dow Jones AIG index options and swaps.

Darren J. Potter +44 207 074 2095