The cost of betting on further dollar gains in the options market rose to the highest since November as the US economy’s resilience drives demand for the currency.
The Bloomberg Dollar Spot Index climbed to a five-month high as Treasury yields jumped after stronger-than-expected retail-sales data prompted traders to pare bets on Federal Reserve interest-rate cuts this year. The greenback has already risen to a 34-year high versus the yen, and the strongest in five months versus the euro, pound and Australian and New Zealand dollars.
The dollar-buying frenzy is even spurring speculation the currency will regain parity against the euro for the first time since November 2022. Leveraged funds are now holding their biggest bet in more than two years that the greenback will rally further.
Still, investors wanting to profit from further dollar gains by buying call options — which increase in value if the greenback strengthens — are finding out that it comes at a steeper price. The premium to speculate on the dollar rising over the next three months compared with it falling has risen to the highest level since November.
“Markets are now heeding the risk that the dollar could return to last year’s highs and are hedging accordingly,” said Simon Harvey, head of foreign-exchange analysis at Monex Europe Ltd. in London. “The three-month tenor in options is especially interesting in this context as we suspect rate differentials should notably diverge in favor of further dollar appreciation in the second quarter.”
Call options premiums may be capped if the dollar faces resistance to further gains. Slow stochastics, a momentum indicator, on Bloomberg’s Dollar Spot Index have moved into oversold territory. That indicates further near-term dollar upside may be limited.
Also, Summit Wealth Group nabs a Commonwealth advisor in Tennessee, Oxford Financial adds two managing directors, and Verdence draws an ultra-high-net-worth advisor from Fidelity.
When advisors have tech to handle meeting prep and organization, it frees up time they can reinvest more thoughtfully into helping clients.
LPL Financial and Raymond James also add independent advisors from Osaic and Edward Jones in Michigan and Arizona.
The SEC-registered RIA advises on more than $1 billion in client assets, with no advisory fee through 2027 and no human financial advisors.
95.8% of house trades were winners. For clients? The SEC says just 14.9%.
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor
