Two banks have traded SONIA-linked swaptions with a third actively showing prices for the instruments. Barclays markets executed a trade to hedge a balance-guaranteed swap last month, according to Risk.net. The swap element of the physically settled trade reduces at a rate linked to the amortisation of a referenced security, leaving users with a SONIA swap if the option is exercised. HSBC is the second bank to have traded a SONIA-linked swaption, with NatWest reportedly offering prices.
Two banks have traded SONIA-linked swaptions with a third actively showing prices for the instruments. NatWest markets executed a trade to hedge a balance-guaranteed swap last month, according to Risk.net. The swap element of the physically settled trade reduces at a rate linked to the amortisation of a referenced security, leaving users with a SONIA swap if the option is exercised. HSBC is the second bank to have traded a SONIA-linked swaption, with Barclays reportedly offering prices.