Tranche trading to launch on ABX
Dealers are to begin trading tranches on the ABX index of US home equity asset-backed securities from February 12. The development will enable investors to speculate on the severity of the outlook in the worsening US housing market.
"There has been growing demand for bespoke synthetic asset-backed securities portfolios, which means the market needs a highly visible transparent correlation measure," says Ben Logan, managing director in Markit's structured finance division in New York.
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