Friday, September 14, 2007

Currency Traders Pay Biggest Premium in 3 Years for Yen Calls

Currency traders are paying the most in almost three years for options that protect against a potential rebound in the yen versus the euro, before Group of Seven finance officials meet in Germany later this week.

Investors are hedging against the chance G-7 nations try to support the yen after it fell last month to a record low against the euro. German Finance Minister Peer Steinbrueck last week said the G-7 will discuss the drop in Japan's currency, which has weakened as the Bank of Japan kept its benchmark interest rate at 0.25 percent, the lowest among major economies.

Traders are buying insurance against an unraveling of the so-called carry trade, in which investors borrow in Japan and buy debt in economies such as the euro region, where they can get 2 percentage points or more in extra yield.

11 comments:

Anonymous said...

nice info...

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Unknown said...

Nice informative stuff! Also, all the information about currency traders are really very excellent to us.Thanks for the efforts for making this post.



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Currency Trading said...

What a luck for currency traders that if they have to pay premiums most then its the worst time for them. Insurance should be made by traders.

Telecom News said...

Paying premium is most hatred by me as being a currency trader.

iPhone 4G Unlocked said...

Insurance in my opinion is the best thing that should be done by every businessmen for safety measures. But premium I hate to pay.

turkceforex said...

Thats really a very nice and informational post. Thanks

fxblog said...

You are saying absolutely right currency traders really pay biggest premium in 3 years. Thanks for telling

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