Latest news with #DepositoryTrust
Yahoo
27-05-2025
- Business
- Yahoo
Hedge Funds Bet on Korean Won to Mirror Taiwan Dollar's Surge
(Bloomberg) -- Hedge funds are ramping up bets in the options market that the South Korean won will mirror the Taiwan dollar's recent rally against the greenback. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Dollar-won option trading volume spiked to this year's high last week, according to the Depository Trust & Clearing Corporation data, as speculation grew that Korea and the US discussed the won's direction in their currency talks. Barclays Bank Plc said there's been increased demand for put options from hedge funds. A surge in the Taiwanese dollar this month has reshaped market expectations for Asian currencies. Investors see the won as a likely candidate for comparable gains, as Korea's trade surplus with the US adds pressure on local authorities to tolerate a stronger currency. The US last year added Korea to its foreign-exchange monitoring list — which already included Taiwan. A key question 'most hedge funds have been asking is: which currency pair can have the same magnitude of move that was observed in' the Taiwan dollar, said Mukund Daga, head of foreign-exchange options for Asia at Barclays in Singapore. 'This has led to decent demand for dollar-won put options in digital and vanilla formats by fast-money names.' Vanilla options are standard contracts with no special features attached to them, while digital trades offer a fixed payout if the FX pair hits a preset level at expiration. Demand for dollar-won put options with notional sizes over $60 million outpaced call options on DTCC by a 3:2 ratio on Wednesday, underscoring the bias for bearish bets on the pair. The premium to hedge dollar-won downside over the next month compare to the upside, as measured by risk reversals, traded near a 21-year high last week. The dollar-won pair 'was already seeing active downside interest for digitals and put spreads since the big move in the Taiwan dollar a few weeks back,' said Saurabh Tandon, global head of foreign-exchange options at Standard Chartered Bank in Singapore. 'The recent FX related comments have spurred on interest in downside dollar-won trades.' The tariff talks between the US and its trading partners have raised speculation that President Donald Trump's administration is open to a weaker greenback. For many, the won is becoming a favored proxy for broader shifts in US-Asia trade dynamics and a key hedge against declining dollar strength. The won rallied last week as local media cited an unnamed government official as saying that the US believes a relatively weak local currency is a fundamental cause of Korea's trade surplus. The finance ministry has said that while FX talks with the US are ongoing, nothing has been decided yet. The Taiwan dollar's 7% surge this month has raised hedging costs for Taiwanese insurers, who are large holders of US-dollar assets. That's making the won a major proxy for hedging, according to a Bank of America note dated May 21. The 'market is showing insatiable appetite for owning optionality in the won,' said Ivan Stamenovic, head of Asia Pacific G-10 FX trading at Bank of America Corp. 'We are seeing major interest across the term structure indiscriminate of tenors. --With assistance from Jaehyun Eom and Betty Hou. Why Apple Still Hasn't Cracked AI Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? How Coach Handbags Became a Gen Z Status Symbol Inside the First Stargate AI Data Center AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox ©2025 Bloomberg L.P.
Bloomberg
27-05-2025
- Business
- Bloomberg
Hedge Funds Bet on Korean Won to Mirror Taiwan Dollar's Surge
Hedge funds are ramping up bets in the options market that the South Korean won will mirror the Taiwan dollar's recent rally against the greenback. Dollar-won option trading volume spiked to this year's high last week, according to the Depository Trust & Clearing Corporation data, as speculation grew that Korea and the US discussed the won's direction in their currency talks. Barclays Bank Plc said there's been increased demand for put options from hedge funds.
Bloomberg
20-05-2025
- Business
- Bloomberg
Options Traders Bet Euro Rally Has Further to Run Ahead of G-7
Traders are growing more confident that the euro's rally has further to run, with upbeat signals emerging just as Group-of-Seven finance ministers and central bank governors meet in Canada. Data from the Depository Trust & Clearing Corporation show that bullish euro bets through options outpaced bearish ones Monday by the second-widest margin in a month. Meanwhile, demand for options that target a stronger euro was at the highest year-to-date early Tuesday, with many hedge funds eyeing gains past $1.20, said FX traders familiar with the transactions who asked not to be identified because they aren't authorized to speak publicly.
Bloomberg
13-05-2025
- Business
- Bloomberg
Dollar's Big Bounce Meets a Wall of Doubt in the Options Market
The dollar pared Monday's gains, with traders unconvinced that its recent surge on the back of easing US-China trade tensions will last long. A gauge of the greenback's strength fell 0.2% as positioning in the options market continues to lean against the currency. Depository Trust & Clearing Corporation data show that dollar bearish bets so far this week total around $61 billion in notional value, more than the $55 billion in bullish trades.
