A Cross Currency Basis Swap is afloating/floating swap where banks can swap one currency for another. As there is an exchange of principal, a Cross Currency Basis Swap is not an OBS (off balance sheet) product.

Primarily a bookkeeping instrument, it can be used to hedge out floating flows created by various IRS (Interest Rate Swaps) trading books. It can also be used to hedge flow between OBS curves and Forward FX curves.

The development of the Cross Currency Basis market has enabled Fixed Income areas to look at a variety of currency issuance to raise funds using the Cross Currency Basis Swaps to switch the flow back to the desired currency.

Our teams, based in London and Lausanne, have a wealth of experience in Forward FX, IRS markets, as well as Cross Currency Basis. Such experience, together with our global network, leaves Tradition well placed in a market that will continue to expand.

Our updated Basis reference page Reuters TRADBASIS1 is a widely used pricing reference tool for institutional Fixed Income desks.

Tradition’s staffs in these relatively new product areas are involved in their development with the major financial institutions, from the standardization of documentation to the provision of liquidity.

Tradition-ICAP was formed in July 2000 by the merger of the OTC FX Options divisions of the TFS Group and ICAP plc. Tradition-ICAP has offices in New York, London, Frankfurt, Copenhagen, Sydney, Tokyo and Singapore.

Tradition-ICAP conducts its business as an independent intermediary in OTC FX Options. In November 2001, the company integrated the Volbroker system into its currency options business. This created an interdealer broking consortium that combines the strengths of voice-brokered liquidity together with the market’s leading FX Options electronic broking platform.

The Volbroker platform was designed by traders for traders, and is used by banks all over the world. A list of banks involved in its creation can be viewed on the Volbroker Partner Banks page.

Tradition has been at the forefront of the Inflation Swap market, and maintains a pivotal presence amongst intermediaries in Inflation products.

Based in London, with teams in Europe, Asia, the Middle East and US we provide full coverage of the market in various currencies and Inflation linked products.

An interest rate derivative is a derivative where the underlying asset is the right to pay or receive a (usually notional) amount of money at a given interest rate.

The interest rate derivatives market is the largest derivatives market in the world.

An interest rate swap is an agreement between two parties to exchange stated interest obligations (i.e. fixed or floating) for a certain period in respect of a notional principal amount.

Cross Currency Swaps

Pre x CDI

A Pre x CDI Swap is an offshore fixed-floating Brazil swap. Pre is the fixed rate and CDI is the floating rate of the swap. The floating rate is the overnight interbank deposit average rate (Selic) which is calculated exponentially on a 252-business-day basis.

With personnel located in our Mexico City, Santiago and New York offices, we focus daily on enhancing the efficiency of the market by compiling the best bids and offers, generating liquidity for our clients and understanding and supporting them with the highest level of professionalism.

Tradition’s clients in the federal funds market include commercial banks, thrift institutions, agencies and branches of foreign banks in the United States, federal agencies, and government security dealers. Our voice-dominated brokerage services help these institutions obtain a yield on bank reserves that would otherwise remain idle.

Tradition’s role as an intermediary provides us with the opportunity to arrange transactions between lenders and buyers in Federal Funds, Eurodollars, and Certificates of Deposit. Execution of all trades occurs on an anonymous platform for each client, and ranges from overnight to 28 days in duration. Our experienced staffs are an acknowledged market leader in the brokerage industry and are committed to constant improvement.

Our presence in all the major financial centers ensures that our clients receive instant quotes in all the major traded currencies as well as the exotics and emerging markets.