BNY Mellon has ventured into the FX options space by offering a new product that compliments its foreign exchange offering and allows clients to include the asset class as an indispensable part of their portfolio of trading products.
FX options is just one of a number of new services BNY Mellon Markets is introducing to enable its clients to more efficiently access global currency markets. The comprehensive FX suite leverages the bank’s existing pool of liquidity, collateral, and funding capabilities and opens it up to its global client base.
Market participants trade FX options to more precisely manage currency risk as the product can be devised for high volatility, low volatility, bullish, bearish, neutral or virtually any other market view. In addition to expanded trading opportunities, trading spot and options in a single account can create risk-adjusted capital efficiencies for traders.
Earlier this year, BNY Mellon launched a prime brokerage service to enable clients to trade and margin their FX through a counterparty that oversees more than $30 trillion of assets under custody.
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The increase in banking regulation, which mandates increased minimum levels of capital and increases in reporting expenses, has resulted in a lot of banks leaving the prime broking space.
On a related note, Sam Osterman joined BNY Mellon in January to head the new options business. At the time, BNY Mellon said his appointment is the latest step in the transformation of the FX business following the hire of Adam Vos as global head of FX earlier in 2018.
Osterman served most recently as director and foreign exchange options trader at Barclays, and then he was promoted to global head of G-10 and emerging markets flow options.
Commenting on the launch, Adam Vos, Global Head of FX at BNY Mellon Markets, said: “Options is a must-have as we transition into a full-service FX franchise that can meet all of our clients’ end-to-end trading, hedging, payments and administrative requirements. We have further enhancements to come later in 2018 as we continue to retool our FX capabilities to better equip clients for the challenges of today’s currency markets.”