Traders flipped long yen vol ahead of global market rout
Hedge funds and real money bought long yen volatility in the run-up to Monday’s turmoil
Investors reversed short yen carry trades with bullish yen options positions ahead of the volatility that hit global markets on August 5.
Dealers say clients had been scrambling to exit speculative short yen positions over the past two weeks following the sharp appreciation of the Japanese currency in the lead-up to the Bank of Japan’s rate hike on July 31 and the US Federal Open Markets Committee meeting on August 1.
According to options traders, a lot of the buying had come from real money
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