The advent of electronic trading brought an infatuation with for-profit exchanges, while Dodd-Frank brought hope of regulatory protection for the little guys. Neither delivered in 2013 — will 2014 be any different?
swaps are already being cleared and the vast majority involve plain vanilla interest rate products where an end user transfers floating rate risk for the certainty of a fixed interest rate with so-called swap dealers serving as market makers.
The odd thing is that a regulatory overhaul that began as a way to rein in the lawless world of over-the-counter trading and apply futures industry style regulation will, in the end, arguably have a greater impact on the already regulated futures world than the OTC space.
When John Becker and RJ Mehnert worked together at Houston-based energy wholesaler Entergy Power Marketing Corporation, they mainly hedged the firm’s cash positions, but both dreamed of running their own trading advisory and planned for it.