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Thanks sle, that is very helpful.

OTC. It is still a relatively opaque market, not a lot I can find that is publicly available. For the purpose of this discussion we can narrow it down to USD or EUR interest rate swaptions.

Thanks Martinghoul. What are the most common ways, and could you share an example or two? Cheers.

Dear swaption traders, could you please shed some light on how brokerage is calculated in this asset class? I am getting different answers from various sources. Some say it is based on swap notional (e.g. 0.0025 bps) while others reckon it is based on vega. The second one does not make a lot of...

Transaction costs on VIX futures include $1.7 per lot of exchange fees plus $1-2 of brokerage. So 5-7bps wide was actually pretty tight considering it is usually 5bps wide on exchange these days, assuming they did not charge extra fees on top of the bid ask spread.

Does anyone know how much banks used to charge for trading these products before the advent of listed VIX futures more than a decade ago? And how the numbers evolved over the years. I assume it would cost a lot higher than VIX exchange and brokerage fees, but wonder whether it was 10x or 100x...