A Huge Options Trade Is Betting Markets Are Wrong on Fed Cuts
- Total of $30 million plowed into eurodollar put-option wager
- Position would benefit if Fed refrains from easing this year
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There may be a new eurodollar whale in town. About $30 million has been plowed into an options bet that the market has gone too far in pricing in Federal Reserve cuts this year.
The position has built up over the past week following the Fed’s dovish pivot, and is now likely the largest outstanding in its corner of the interest-rates market. The structure is known as a eurodollar put option condor, and all it will take for it to turn a profit is for the central bank to remain on hold this year.