Foreign-exchange options traders anxious about worsening U.S.-China relations are using key currency proxies to hedge against the uncertainties.
Tuesday saw nearly $1.4 billion of options traded on the Hong Kong dollar and U.S. dollar that will be profitable if the Asian currency is below 7.61 per greenback in three months’ time, while another $640 million worth of similar derivatives was traded that are tied to the 7.64 level. They could also prove profitable for traders even without spot breaking below the official trading band of 7.75-7.85 if option-implied volatility were to rise sufficiently.
https://invst.ly/qxx28 - goes back to 1983
https://invst.ly/qxx3q - current timeframe
just curious- level usdhkd goes down to 7.61 or 7.64...thats way back to 1983 level.....so this is a hedge of peg adjustment?
usually- when USDHKD goes up- hsi will go down....but in theory, if USDHKD goes down to 7.64...hsi to goes up? -- when china imposed security law?
does anyone can shed any lights on this move of 2b options? why are they betting it go down?
https://www.bloomberg.com/amp/news/a...rrency-options
Tuesday saw nearly $1.4 billion of options traded on the Hong Kong dollar and U.S. dollar that will be profitable if the Asian currency is below 7.61 per greenback in three months’ time, while another $640 million worth of similar derivatives was traded that are tied to the 7.64 level. They could also prove profitable for traders even without spot breaking below the official trading band of 7.75-7.85 if option-implied volatility were to rise sufficiently.
https://invst.ly/qxx28 - goes back to 1983
https://invst.ly/qxx3q - current timeframe
just curious- level usdhkd goes down to 7.61 or 7.64...thats way back to 1983 level.....so this is a hedge of peg adjustment?
usually- when USDHKD goes up- hsi will go down....but in theory, if USDHKD goes down to 7.64...hsi to goes up? -- when china imposed security law?
does anyone can shed any lights on this move of 2b options? why are they betting it go down?
https://www.bloomberg.com/amp/news/a...rrency-options