Hedge funds that used unique overseas change derivatives to purchase low cost ahead publicity to volatility across the US presidential election are starting to rack up earnings, as vol rises into subsequent week’s ballot.
Earlier within the yr, numerous funds entered ahead volatility agreements (FVAs) – an settlement to purchase or promote a vanilla FX possibility, sometimes a straddle, at a predetermined strike value sooner or later sooner or later.
The broad concept behind the trades is to entry a particular phase of the
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