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Demand for AUD Hedging Via Options Surges Following RBA Decision

OPTIONS
  • Solid demand for AUD hedging via options so far Tuesday - with volumes helped higher by the RBA's confidence in the face of the new omicron risk and the subsequent rally in spot.
  • One of the larger structures trading following the RBA decision is consistent with a 0.7205/0.7100 call spread rolling off on Dec20 - and thereby capturing a tumultuous week of CB decisions, including the Fed on Dec15. Trade would break-even on spot strength through ~0.7135. The options buyer paid a net premium of approx 78 AUD pips for the position.

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