HKD trading surge highlights pegged currency challenges
Pricing options on currencies with a peg requires a “different mindset”, say traders
The surge of activity in Hong Kong dollar foreign exchange trading this year offers a reminder of the potential perils when pricing and trading derivatives linked to pegged currencies, traders say.
“Of course, the Hong Kong dollar market is a huge options market for the investor community, for hedge funds, like us, and for corporates,” said Vineet Agarwal, a portfolio manager at Astignes Capital.
“B
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