Brazil Traders Just Made a Huge Bet in Currency Options Market
- Traders may be wagering real to swing violently in coming days
- Tuesday volume on contract was 25 times the daily average
Photographer: Bloomberg/Bloomberg
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Brazil options traders seem to be gearing up for a sudden surge in currency volatility.
Investors bought $1.4 billion of contracts Tuesday that will pay off if the real swings significantly over the next week from its current price near 3.5 per dollar, already the lowest in 11 months. Trading volume was 25 times the average over the past two weeks, according to data from the exchange. Just seven trades were recorded, indicating the buyers were making large wagers.