Delighted to be featured in the latest Risk.net article QIS 3.0 ‘bonanza’: hedge funds pivot from options to swaps discussing the rapid adoption of QIS by hedge funds.
“The challenge is the ability to represent the trade and having look-through visibility on positions and risk. The most important thing for institutions including hedge funds is to understand the underlying exposures of their strategies and the risk ex-ante of their portfolio,” says Adrien Geliot , Premialab’s CEO. “Our role is to serve as a gateway whereby hedge funds can do a single integration that provides access to 18 dealers.”
With hedge funds shifting from options to total return swaps, cost efficiency and liquidity are top priorities. “Total return swaps are potentially more cost efficient than options, with lower transaction costs. When it comes to long-term exposures, a swap format can help avoid option premiums and theta decay, and you can’t access all strategies via options. TRS may also offer better liquidity, enabling hedge funds to scale exposure more effectively with large notionals”
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