Um, this would have been a really great idea about a year or two ago.
Officials at the Federal Reserve plan to meet with top executives from two commodities exchanges in an effort to create a new marketplace for credit default swaps, one of the most important, controversial and opaque securities traded on the Wall Street, CNBC has learned.
The meeting, scheduled to be held as early as Tuesday of this week at the headquarters of the New York Fed, is expected to clear the way for the creation of a new clearing house, or exchange, where CDSs can be traded with more transparency and with a degree of government oversight.
At the moment CDSs are traded in the over-the-counter market, where traders buy and sell the securities among themselves.
The effort by the Fed is designed to create a centralized market place where CDSs can be traded.
People close to the talks say that the new exchange could be up and running in a matter of weeks.
Must have been blasphemous to the Pure Movement Capitalists at CNBC to print this.
But seriously, better late than never. And in the future perhaps when the size of some as-yet-to-be-invented OTC derivative product gets beyond comprehension, they'll be more proactive in listing and regulating them. But I won't hold my breathe, we'll be arguing against oppressive government regulation by then.
Anyway, as far as options go, we have something here that doesn't exist anywhere else on my screen. A good bullish story. A (sort-of) up stock.
Like everywhere else, volatility is quite high, in the 80's, about double the norm. So it's a bit of a tradeoff as on one hand, it's a rare chart that's not a disaster zone, on the other hand, it's already seen a quick and sizable bounce off some poundage.
