Morgan Stanley Investment Management halved its notional exposure to US dollar/offshore renminbi options in the third quarter of the year, leaving the US mutual and exchange-traded fund sector with its lowest foreign exchange options aggregate since FX Markets started collecting data in early 2020.
The manager had been known to take large bets on the Chinese currency’s depreciation, but after more than $400 million in lost premiums, only one set of trades potentially paid out earlier this year. Third-quarter filings show the manager still held onto the potentially money-making 7.27 call options that expired in early November.
JP Morgan felt the biggest impact from MSIM’s cuts, with the manager listing the bank on $15.8 billion less notional from…
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