Dollar‑rupee options hit $18.5B in two weeks
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Dollar‑rupee options traded $18.5 billion in notional value during the first two weeks of March, close to the $24‑$25 billion monthly volumes of the prior three months, per LSEG data.
- Trading volumes adjusted for the two‑week period are nearly double prior monthly averages, indicating a post‑war surge after the Iran war began on Feb 28.
- India imports over 80% of its energy, and the Middle‑East conflict threatens remittances and exports, which could widen its current‑account deficit and fuel inflation, making the rupee more vulnerable.
- Brent crude has risen more than 40% since the war, while the rupee weakened 1.6% to around 92.4550 per dollar, a decline softened by central‑bank intervention.
- Call options on the dollar‑rupee pair outpace puts, with strikes clustered near spot levels, signalling expectations of modest upside rather than sharp moves.
- Short‑dated tenors dominate the activity, reflecting positioning to profit from near‑term volatility linked to the conflict.
- Singapore‑based portfolio manager said the market is positioning for escalation in the conflict, pressuring oil‑importing currencies and keeping the rupee under strain.
Why it matters: Traders taking short‑term bearish positions on the rupee stand to profit from the surge in options, while India’s economy bears the brunt of higher oil costs, which could widen its current‑account deficit, fuel inflation and keep the rupee near its lifetime low.
Ask SkimNews
