The Trading Floor with David Axtell

Carry and currency-overlay strategies can produce long runs of small gains followed by sharp losses. This episode explores crash risk, skew, tail hedging and the hidden shape of return profiles. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 28 of FX Option...

Market makers price more than volatility. Client behaviour, inventory, liquidity and adverse selection all influence a quote. This episode explains how dealers interpret and manage flow. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 27 of FX Options. Educa...

A hedging programme is more than a single trade. This episode looks at policy, layering, target redemption structures, governance and the danger of allowing cost reduction to become speculation. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 26 of FX Option...

Zero-cost corporate hedges are financed by giving up value elsewhere. This episode examines participating structures, collars and the trade-offs treasurers need to understand before signing. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 25 of FX Options. E...

Exotic books can hide concentrated risk near barriers and trigger levels. This episode focuses on scenario analysis, Greek aggregation and the practical management of non-linear exposures. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 24 of FX Options. Edu...

Written by Luigi Pascal Rondanini. Performed by AI actors. Compliance folklore still drives multi-million FX decisions — forwarded emails, draft papers, “the desk across the street.” This Deep Dive explains what Rondanini FX Risk Intelligence (FXRI) is (and is not): a continuously maintained professional reference with evidence attached — not a news ticker, retail app, or advice product. We walk t...

Constant volatility is a convenient assumption, not reality. This episode introduces local volatility, stochastic volatility and other model approaches used to capture changing market behaviour. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 23 of FX Option...

Ask for the rate risk on a single-currency swap and you get one number: its DV01. Ask about a cross-currency swap and a single number is dangerously incomplete. Episode seven shows why the risk is a vector — projection and discount curves, in each currency, across tenors — and why the seductive error is collapsing it into one convenient summary. Host David Axtell covers key-rate risk and the curve...

Listed and OTC currency options can share strike and expiry but differ in contract design, settlement, liquidity and margin. This episode explains why those differences matter in fast markets. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 22 of FX Options....

When spot moves, the volatility surface can move in different ways. Explore sticky-strike and sticky-delta behaviour, Vanna exposure and why surface dynamics matter to hedging. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 21 of FX Options. Educational con...

OTC options, listed options and futures can hedge similar risks with very different liquidity, margin, documentation and operational consequences. This episode compares the market structures. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 20 of FX Options....

Attractive coupons in structured notes often come from embedded option sales. This episode breaks down the economic trade hidden inside the wrapper and the risks investors may actually be taking. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 19 of FX Optio...

FX options do not trade in isolation. This episode connects currencies with equities, rates, commodities and global risk appetite to show how cross-asset information changes pricing and hedging. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 18 of FX Option...

Central-bank decisions can lift implied volatility before an announcement and crush it afterward. This episode explains event risk, volatility repricing and the options market around policy meetings. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 17 of FX O...

Emerging-market currencies add capital controls, non-deliverability, liquidity gaps and political constraints. Learn why standard FX option techniques need adjustment in restricted markets. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 16 of FX Options. Ed...

Two treasurers call the same dealer, the same morning, for the same swap — and get different numbers. Neither is being cheated. Episode six opens the gap between what a cross-currency swap is worth and what a dealer will quote you. Host David Axtell builds the clean par rate from a zero-PV condition, then decomposes the quote component by component — credit, funding, capital, operations, profit —...

Some of the largest losses on a derivatives desk come from process rather than market direction. This episode covers confirmations, settlement, controls, documentation and operational failure. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 15 of FX Options....

How regulation and internal models turn market risk into capital requirements. Explore the link between options exposure, capital allocation and the economics of running a derivatives business. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 14 of FX Options...

Value at Risk can be mathematically correct and still miss the loss that matters. This episode examines confidence levels, holding periods, fat tails and why stress testing belongs beside VaR. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 13 of FX Options....

Autocallables and hybrid structures can look complex, but they are built from familiar option components. This episode decomposes the payoff and shows where path dependency enters the risk. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 12 of FX Options. Ed...

Variance swaps let traders take a direct view on realised versus implied volatility. This episode explains the payoff logic and how volatility can be traded without relying on market direction. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 11 of FX Options...

Basket options combine several currencies into one payoff. Learn how correlation creates the apparent diversification benefit and why that benefit can disappear when markets become stressed. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 10 of FX Options. E...

Asian options use an average exchange rate rather than a single fixing. This episode shows why average-rate structures fit recurring exposures and how averaging changes volatility and hedge behaviour. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 9 of FX O...

There's a number quoted daily on every major currency pair that, in theory, should be zero. It isn't, and hasn't been for nearly two decades. Episode five is the conceptual centre of the season: what the cross-currency basis measures, why covered interest parity broke in 2008 and never fully healed, and why it persists — balance-sheet costs and one-way hedging demand, not textbook misp...

Knock-in and knock-out barriers can radically change cost and risk. Understand how barriers behave as spot approaches the trigger and why discontinuous exposures require active management. This episode is part of FX Options Daily, a 30-day themed season of The Trading Floor covering pricing, hedging, exotics, risk and institutional FX options practice. Full treatment: Chapter 8 of FX Options. Educ...