Dealers might be nearing their capacity for Turkish lira options-based carry trades, as liquidity pressures, market risk and unwind concerns begin to constrain the amount of new trading they can support.
The lira carry trade has been a favoured strategy among hedge funds and institutional investors this year, owing to the whopping 40% carry on offer.
Dan Mitchell, head of Europe, the Middle East and Africa FX options trading at Citi, believes market-makers could be past the peak of how much new
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Read More: Market-makers near limit for lira carry-based options trades