The spot trader has an incentive to treat the options trader well, in order to get as much information about the indirect implications of options market flows for the spot market. Organizing along asset class lines also means that marketing is integrated for cash and derivatives products as far as the customer is concerned. Marketing teams are directed to sell all of the products in the asset class. They sell options to their clients and then they sell spot and forwards to these clients in the dynamic management of these exposures. There are two problems with this approach to organization.
Difficulties arise when customers expect horizontally integrated products.
For example, the manager of a domestic money market fund might want to take advantage of his view on the Canadian dollar exchange rate against the US dollar. Technically, he cannot take explicit foreign exchange positions. However, he can buy a structured note that guarantees his principal while simultaneously allowing him to take advantage of his view if it is correct. There are also management issues that come into play in dealing rooms organized by asset class. Because of their highly technical and specialized nature, derivative products themselves might be considered a separate type of asset.