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FX hedging volumes slightly higher than.....>

OPTIONS
OPTIONS: FX hedging volumes slightly higher than average so far Wednesday, with
USD/CNY once again leading the way (as has been the case since the beginning of
last week) and making up for lower activity in EUR/USD, AUD/USD and GBP/USD
(although, USD/THB options have also been particularly busy Wednesday).
-Yesterday, sentiment among options traded was relatively neutral toward
USD/CNY, but that's not held through into the Wednesday session as the put/call
ratio leans further in favour of USD/CNY calls at a ratio of almost 2:1. USD/CNY
call strikes at 7.00 have been particularly popular Wednesday, with near $2bln
in contracts trading Wednesday rolling off at that strike, but some of the
larger trades crossing today eye gains north of that level. Just ahead of the NY
crossover a $500mln 6.95/7.30 3m call spread crossed, a position that would
break even just above the 7.00 mark.
-After retreating Tuesday, 1m implied vols are generally rising across DMFX,
although falling for some EM currencies. GBP/USD vols are ticking higher on the
announcement of another meaningful vote in the week beginning June 3rd, while
TRY vols pull back as spot is somewhat contained.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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