Barclays rolls out variance swaps platform for institutional users

Funds can now access a new variance product through the bank's Barx platform.
Barclays Capital, the investment banking division of Barclays Bank, has incorporated equity variance swaps within its electronic trading platform, Barx, which is available via Bloomberg. The product will be aimed at major financial institutions and hedge funds.

The variance swap is a way to position long or short exposure to market volatility - therefore creating a directional view of volatility. Whilst it is called a swap contract, its characteristics have more in common with an option-based product.

Variance swaps are used for volatility trading. It acts as an alternative for traders who otherwise use a delta-neutral option strategy to take a position on volatility, as the variance swap can offer a more precise way of...
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