Rising Call-Option Demand Signals EM Local-Currency Bond Gains

Options traders are betting on at least a 10% gain in emerging-market local-currency bonds over the next three months, turning the most optimistic on the asset class in 16 months.

The implied volatility on call options that begin to pay when the VanEck JPMorgan EM Local Currency Bond Exchange-Traded Fund rises more than 10% climbed to the highest level since June 2024, according to data compiled by Bloomberg.