BRL options traders count cost of Lula shock
One-way Bolsonaro bets forced dealers into tough hedging choices as USD/BRL gapped 13% on Lula’s victory
The surprise re-election of Luiz Inácio Lula da Silva last week has left Brazilian real options dealers counting the cost of a result the market dreaded but had been certain would not happen.
Going into the October 25 runoff, prediction markets had Flávio Bolsonaro comfortably ahead after his own surprise win in the first round earlier in the month, and macro hedge funds had positioned almost entirely for a stronger real through limited loss FX options structures, alongside long positions in
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@fx-markets.com or view our subscription options here: https://subscriptions.fx-markets.com
You are currently unable to print this content. Please contact info@fx-markets.com to find out more.
You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@fx-markets.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@fx-markets.com
More on Trading
FX bets join long list of duds for macro funds this year
Soured rates and FX strategies underscore painful time for macro hedge funds
Deutsche Bank’s FX algo head to retire
Algo trading business will now be overseen by Richard James, head of AutobahnFX
BRL bulls hold firm after Bolsonaro first-round win
Hedge funds keep USD/BRL puts ahead of election run-off as protection premiums for Lula upset soar
NDF algo innovation rises as internal matching builds
Banks bolster offerings with new EM pairs and improved execution quality, in bid to increase internalisation
US fund managers reshuffle dealer books amid new trading highs
Mutual funds, ETFs hit record FX forwards positions but retreat from options; insurers rotate counterparties
Hedge funds crowd into bullish Brazilian real trades
Funds snap up FX options betting on stronger real after a Bolsonaro win
Fund giants turbocharge Wells Fargo’s FX forwards book
Counterparty Radar: US bank jumps from 12th to second in Q2 2026 dealer rankings as Pimco and Vanguard ramp up trading
Jackpot for JGB asset swaps after hedging rush
Multi-leg trade turned profitable as corporate cross-currency hedging flows helped push yen swap rates above JGB yields
