``The Financial Times revealed this week that trades in index credit default swap (CDS) options had managed to avoid being listed on exchanges, with all the transparency requirements that brings, instead being allowed to continue trading on an over-the-counter basis. The amount outstanding is relatively small in relation to the $25 trillion of CDS outstanding, but lack of transparency is likely to hide a deep underlying problem... The London Whale took these kinds of risks, made large bonuses as a result and came close to wiping out J.P. Morgan. Had he been playing in CDS swaptions rather than CDS his risk-reward ratio would have been even more favorable for him and even more likely to be fatal for the bank. An additional wrinkle is that the new upsurge in trading volume is in index CDS ["swaptions"], in which the underlying credits represent a basket of different borrowers.''

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