ABN AMRO has launched MiniSwaps, a product allowing corporates, fund managers and institutions to trade and hedge interest rate risk. Regulatory or credit legislations has prevented some market participants from trading derivative contracts but the open-ended securities, says ABN AMRO, will open the market. MiniSwaps are priced at intrinsic value with no time value element and, importantly, trade like securities rather than derivatives with price linked to the prevailing level of the underlying interest rate.
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