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Moving Past a March Hike

US EURODLR OPTIONS

With markets widely anticipating (and hearing opinion from several Fed officials) of liftoff at the March FOMC -- option traders have started moving to Spring-Summer for edge in hedging next hike if inflation persists.

  • +20,000 Apr 98.75/99.00 put spds, 1.0
  • +4,000 Jun 99.00/99.12 put spds, 2.0 vs. 99.29/0.12%
  • On the flipside:
  • +25,000 Jun 99.25/99.37/99.50 in-the-money put fly, 2.5 -- unlike early session trades looking for three 25bp hikes by June, the ITM put fly looks for cooling of inflation, less hawkish rhetoric.

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