Playing on market volatility – either a spike or a range in the implied vol – has become a norm for products linked to the equity markets with foreign exchange embracing the trend as markets go sideways.
‘Range trades’ have become popular in Asia Pacific as a result of a lack of exchange rate swings as well as traditional carry trades in a low interest rate environment. “If we look at how EUR/USD, GBP/USD and all the other major currencies have been doing for the last couple of months, they have been very range-bound and the volatility has been just dwindling lower,” said Danny Chong (pictured) , FX & emerging markets regional sales head for Apac at Societe Generale.
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