Derivative Popularity: Interest-Rate Topping Credit-Default Swaps

Move by BofA credit trader reflects increasing anxieties about interest rates and falling concern about corporate debt defaults.

What’s hot: betting on the direction of interest rates. What’s not: wagering on corporate defaults.

The trend may explain why Bank of America Corp.’s Kavi Gupta, who headed a U.S. group trading credit-derivatives indexes, changed roles. In March, he switched to lead interest-rate swaps trading in the region, according to two people with knowledge of the matter.

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