Brexit, Hong Kong tensions revive FX options market
Political wrangles have helped boost FX options volumes in Hong Kong dollar and sterling
Foreign exchange options markets for sterling and the Hong Kong dollar showed signs of life in recent weeks, as political events spurred activity in the two currencies.
When the US sought to revoke Hong Kong’s special status earlier this year, some speculated that the Hong Kong dollar’s peg to the greenback would buckle. Since then, the currency's strength has kept it trading at the bottom end of its range and option traders have increasingly bet that it would breach its floor.
In the UK
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