Hybrids go for gold
Spot gold surge sees investors eye dual digitals on new highs
Confidence in a continued gold price rally has enticed hedge funds back into hybrid options trades, after erroneous bets on US equities led to a pause in activity.
Hybrid options, which use correlation between two or more assets to cheapen the cost of convex bets, have become a hedge fund staple for trading macro events. Investors won big on higher equity/stronger US dollar bets around the 2024 US election, but many were wrongfooted on tariff-related trades after pairing a range of rates views
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