Ruble Options Volumes Surge 900% as FX Traders Wager on Rebound
© Bloomberg. A cashier counts 1000 ruble banknotes inside a Magnit PJSC hypermarket store in Moscow, Russia, on Wednesday, Feb. 28, 2018. Billionaire Sergey Galitskiy will quit as chief executive officer of Magnit PJSC after selling 138 billion rubles ($2.5 billion) of shares–29 percent of the company–to the state-controlled VTB Group, Magnit said in a regulatory filing.
(Bloomberg) — Currency traders — caught off guard by the most punitive U.S. sanctions yet on Russian companies and oligarchs — are plowing into the options market positioning for a rebound in the ruble.
Options transactions reported Thursday to the Depository Trust & Clearing Corp. were more than 900 percent greater than the five-day average as of 3:30 p.m. New York time, following a similar surge in activity Wednesday. About $2.2 billion of dollar puts outweighed roughly $1.3 billion of calls, suggesting traders are hedging against a sharp recovery in the Russian currency.
The ruble fell as much as 11 percent this week to 65.06 per dollar, the weakest since 2016, as the U.S. said it would impose penalties on dozens of Russian tycoons and companies. One-month implied volatility in the dollar-ruble pair remains near its highest in almost two years, according to data compiled by Bloomberg.
“When you see a move like that in spot markets, you tend to see a pickup in volumes in other areas, including options, said Bipan Rai, Canadian Imperial Bank of Commerce’s North America head of foreign-exchange strategy.”
Risk reversals, a barometer of sentiment and market positioning, are also hovering near two year-highs as traders look to profit from a bounce back in the ruble while remaining cautious about further weakness if geopolitical risks resurface.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Leave a Reply
Want to join the discussion?Feel free to contribute!