The recent $2.3 billion trading loss reported by UBS begs the question, what are these guys doing? The activity is called Delta One (D1) trading and involves trading derivatives. It’s appealing because buying derivatives is more lucrative than buying the underlying asset and it gives clients exposure to investments regulators prohibit. A pension fund might be forbidden from buying foreign stock, but through a D1 desk it can buy foreign stock options, never owning the stock.