Long vol bias remains well favoured.........>

OPTIONS: Long vol bias remains well favoured across currency options market,

with short-end vol contracts surging higher still Friday morning. This is

evident across both EM and DMFX markets with particularly notable moves seen in

short-end JPY, RUB, IDR and TRY.

- As a result, it's unsurprising to see currency hedging activity again well

ahead of average. Last Thursday (Feb20) was easily the busiest day of the year

for options activity, but today could see that topped if current volumes

persist. USD/JPY, USD/INR and USD/CAD markets in particular are much busier than

average for this time of day.

- Vol bets remain in focus for JPY hedges, with a large 106.40/111.45 two-week

strangle that traded in Asia-Pacific hours drawing some focus. The trader paid a

roughly $425,000 premium for the position. More broadly, downside protection has

been in focus, helping weigh further on risk reversals. Today the 3m contract

hit the lowest level since 2016.

- CAD hedging markets have been uncharacteristically busy, thanks to a 1x2

1.34/1.3533 1m call spread crossing, again, in Asia-Pac hours.