Hedge Funds Bet on Won, Yuan Via Options After Ceasefire News

Hedge funds are placing bets using currency options that the South Korean won and Chinese yuan will strengthen as risk sentiment improves and oil prices fall on news of the US-Iran ceasefire.

Trading volumes for options on both currencies versus the dollar jumped to their highest levels in a month Wednesday, according to Depository Trust & Clearing Corp. data. Activity was skewed toward bullish positioning, with the volume of call options on the won and yuan of a size of at least $100 million, exceeding that of puts by 70%. Calls gain value when the currencies rise, while puts benefit ...