Bookie taps €1bn call option on Swiss franc, hopes for SNB floor hike

By Beth Shah
07 Aug 2014

One leading interdealer broker in London this week bought a €1bn euro call on the euro/Swiss franc exchange rate in anticipation of the Swiss National Bank (SNB) raising the enforced Sfr1.20 ($1.32) floor on the rate to Sfr1.25 in a bid to combat deflation.

The large trade was purchased at 2.5 vols and has a December 11 expiry date. But market participants were split as to whether the SNB would raise the euro/franc rate floor as the broker hoped.

Earlier in the week, the currency pair was trading at 1.2176. ...

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