Overall, trading by banks in foreign-currency options increased at an annual rate of about 80%. Exchange-traded foreign-currency options on futures contracts, the newest form of currency option, increased by about 40% annually. Prior to 1980 hedging in foreign-currency markets was limited to contracts traded in the forward and futures markets. These markets were used, by large corporations and dealers. There was little room for smaller players.
On This PageNovember 1989, No. 27
An April 1989 survey of the futures and options trading practices of 127 commercial banks indicates substantial increases in trading of foreign-currency options since 1986.
A Good Hedge Keeps Dogs Off the Yard
Last Updated: 11/29/89