Inside Baseball:  Lexicon Updates for OTC Derivatives

A few months ago I was speaking with journalist Katy Burne at the Wall Street Journal.  I now forget what she asked me, but whatever it was, I had covered the topic in depth in one of my recent blogs.  “Don’t you read my blogs?” I asked.

Katy responded “To be honest, I try to, but your blogs are a bit Inside Baseball.”

I was crushed.  And only vaguely familiar with what she meant.  But I knew it couldn’t possibly be a complement.

Wikipedia gives us the definition:

The phrase “inside baseball” refers to a detail-oriented approach to the minutiae of a subject, which in turn requires such a specific knowledge about what is being discussed that the nuances are not understood or appreciated by outsiders.

I then looked at a couple recent blog headlines (actually these were written by my colleague Amir Khwaja) and realized she might be onto something.  They included catchy titles such as:

SEF MAT WEEK 5, USD IRS SEF VOLS HIT RECORD HIGH AND A NEW LEADER

SEF MAT WEEK 4, IRS VOLUMES AND SPOT, SPREAD, FWD, MAC

So I get it, we’re financial technology geeks.  To help “outsiders” (as Wikipedia defines some of you) to understand our blog posts, I thought it worthwhile to put together a brief glossary of terms and acronyms that are often used in the modern lexicon of over-the-counter derivatives.  That glossary can be found here, and we intend to keep it up to date.  We’ve also leveraged a great tool on WordPress that facilitates the readers understanding of these terms, such that the first time they are used in a blog, the user gets the chance to hover over them and see our definition.

So from now on, you’ll be able to understand when someone says:

I traded an OTC IRS butterfly yesterday.  Because the components of the package are MAT and were not block, it was a Required Transaction, so I traded it on SEF.  Only one bank responded to my RFQ so I tried the CLOB at one of the IDB’s.  The Credit Hub’s can’t process packages yet, so I struggled.  Once executed, it got sent to an SDR, so it showed up on my Clarus SDRView application quickly.  Today, I was surprised to see that my FCM is charging me massive IM, they claim it’s only a 10% markup on what the DCO charges them.  I used the Clarus CHARM API to verify that it wasn’t a mistake.

Welcome to the ballpark, slugger.

 

slug·ger  (slgr)

n.

1. One that slugs, as a fighter who delivers hard swinging punches.
2. Baseball A batter who hits many extra-base hits.

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