This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Rogue Trader Hails From Wall Street's Growing 'Delta' Force

Stocks in this article: UBS

NEW YORK ( TheStreet) -- UBS (UBS) rogue trader Kweku Adoboli worked in an extremely complex and difficult-to-define area that was seen as the next great growth opportunity for Wall Street investment banks.

Dubbed "Delta One," it is apparently "the future of equity trading," according to Financial Times writer Izabella Kaminska, even though its ranks include another infamous rogue trader, Jerome Kerviel, formerly of Societe Generale (SCGLY.PK).

Like Chuck Norris' Uzi, weapons of Wall Street's Delta traders include swaps, repos and warrants.

Adoboli's profile on LinkedIn describes him as Director, ETF and Delta1 Trading at UBS.

According to an April 11 blog post by Kaminska,"Delta one equals ETFs, sector swaps, dividend swaps and thematic baskets. It can include warrants and options too. Anything really, providing it involves returning a one-to-one performance to your client."

Kaminska added that "Delta one is just as much about repo, securities lending, funding and centralised execution as it is about the products themselves. It's flow, but it's also prop."

Delta one is near-impossible, in other words, for lay people to understand, but if it is seen as the future of equities trading, as a panel discussion in Amsterdam that Kaminska attended in April called "The rise and rise of Delta One," would seem to suggest," it is not too far a leap to call it the future of Wall Street.

That's because equities, especially equity derivatives, are Wall Street's best growth opportunity, or so wrote JPMorgan analyst Kian Abouhossein last year. Abouhossein also mentioned Delta One in his report, according to Kaminska.

Abouhossein singled out UBS, along with Credit Suisse (CS), as leaders in the equities trading business, with Goldman Sachs (GS) and Morgan Stanley (MS) not far behind. Now, following the rogue trading debacle, Abouhossein is calling for UBS to radically shrink its investment banking business.

Its growth prospects stymied by the bursting of the securitization bubble and new rules that place strict limits on other lucrative areas such as proprietary trading and principal investing, Wall Street has been looking around for a way to replace the lost revenue. If Delta One is indeed the answer, it will have to get past a growing image problem.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs