According to dealers, leveraged funds started purchasing dollar call options on Wednesday, which increase in value if the US dollar appreciates. As investors processed the anti-inflation remarks made by new Fed Chair Kevin Warsh, demand continued into Thursday.
According to CME Group Inc. data for Thursday, the volume of call options, which wager on a rise in the dollar relative to the pound, surged to more than five times that of puts, which wager on a decrease in the greenback.
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According to Depository Trust & Clearing Corp. data, dollar options trading against the euro reached its highest level since March 3. The volume of dollar options linked to larger call contracts worth €200 million ($229 million) or more was almost twice that of similar-sized puts.
Positioning in dollar-yen was more balanced, while demand for dollar call options increased widely.
This could be because of worries that Japan’s Ministry of Finance will increase its intervention to protect the yen following its decline.
(Edited by : Juviraj Anchil)
