Autocall curbs hit long-dated Nikkei and HSCEI options
Collapsing Asia structured products inventory saps market-makers of long-dated vol supply
Long-dated options on popular Asia stock indexes are becoming a rare sight on exotics desks lately. The reason, dealers say, is that Mrs Watanabe is no longer supplying volatility.
Regulatory clampdowns on the sale of retail structured products in Japan and South Korea have seen autocallable bond issuance on once-popular underlyings including the Nikkei 225 and China’s HSCEI come to a near standstill, choking off the supply of longer-dated volatility on these indexes.
“We’re really not going out
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