Hedge funds flock to hybrids to trade macro uncertainty
Firms repurpose structure made popular by Trump trades last year
Hedge funds are turning once again to hybrid options – a standout feature of 2024’s wave of ‘Trump trades’. This time, though, firms are using the structure to express views on tariffs and the threat of recession.
Investors placed high numbers of hybrid option bets on US exceptionalism in 2024, as they correctly predicted that a victory for Donald Trump in November’s election would drive US equities and rates higher and strengthen the US dollar.
Trump’s tariff policy has since whipped up fears of
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
Tech firms continue surge in FX hedging
Apple and Micron lift FX notionals by more than 60% in Q3, while Alphabet and others deploy debt for net investment hedges
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
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
Hedge funds target euro downside amid France unrest
Turmoil drives demand for EUR/USD exotics, pushing up back-end euro vols
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
