Julian Jacobsen, an emerging markets fund manager at Fabien Pictet & Partners in London, recently sold at-the-money options to gain exposure to emerging market volatility. Jacobsen, who manages the GEMS Bond Fund, a fixed income absolute return fund, said he prefers to sell volatility and the increasingly volatile period from the end of April through early May offered good opportunities. One market official trading emerging market derivatives explained sovereign debt options from these markets have lost popularity in recent years. "This could be due to the lack of speculation making the market illiquid," he suggested. "Most customers have moved to credit derivatives, which can be used more precisely," he added.
Fund Sells Emerging Market Options
