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Currency hedging markets putting in a.......>

OPTIONS
OPTIONS: Currency hedging markets putting in a poor show early Tuesday, with
currency options volumes well below average for this time of day. Lacklustre
activity among the major pairs is largely responsible, with USD/CNY in
particular far quieter. The crosses bucking the trend at present include
EUR/JPY, USD/CAD and USD/KRW. Lower volumes are consistent with lower implied
vols across much of DMFX - most notably the GBP/USD vol term structure, which
has fallen back toward 8 vol points from as high as 12.7 points at the highs
last week (See POV: GBP HEDGERS SHOULD WAIT TO OFFSET HIGH PREMIUMS - Sep 4th).
-One of the busier crosses has been EUR/JPY, with upside protection favoured.
One of the more interesting trades crossing includes a E230mln 118/120 call
spread rolling off in early October. The trade breaks even on a move above
approximately Y118.88.
-The pullback in near-term implied vols for USD/CAD has also picked up some
interest, with large trades crossing this morning including volatility hedges -
a 1m 1.2930/1.3435 $120mln strangle crossed mid-European morning.
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