Morgan Stanley Reportedly Executes First Large Cable Trade This Year
Morgan Stanley reportedly bought GBP500 million (USD711 million, notional) sterling puts/dollar calls for a customer speculating that the sterling would continue its slide against the dollar, according to options traders in New York. Morgan Stanley officials declined to comment.
The firm bought the three-month puts struck at USD1.35, when spot was trading at USD1.43 on Wednesday. Traders were surprised by the trade because the cable market has been quiet so far this year. However, it did not impact implied volatility, which remained around 7.5%. Traders said this is because the market can easily absorb trades of this size.