finally seller seem to leading.....may be due to political uncertainty..894
Friday, January 16, 2009
heavy cross fire seller vs buyer
Buy Ringgit Options as Exports Dwindle, Barclays Says (Update1)
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By David Yong
Jan. 15 (Bloomberg) -- Malaysia’s ringgit will weaken as falling commodity prices erode the trade surplus and the central bank cuts interest rates to revive economic growth, according to Barclays Capital Plc.
To profit from the decline, the U.K. investment bank recommended a one-month ringgit put option against the dollar with a so-called reverse knock-out price, according to a research report issued yesterday. This type of derivative is a cheaper alternative to a regular option because the knock-out barrier limits the maximum return.
“The drivers of Malaysia’s balance of payments dynamics are turning against the ringgit,” Goh Puay Yeong, a currency strategist at the bank, which is the third-biggest trader of foreign exchange, wrote in the report. “With oil prices falling, Malaysia’s export buffer from energy-related commodities is also rapidly thinning.”
Email Print A A A
By David Yong
Jan. 15 (Bloomberg) -- Malaysia’s ringgit will weaken as falling commodity prices erode the trade surplus and the central bank cuts interest rates to revive economic growth, according to Barclays Capital Plc.
To profit from the decline, the U.K. investment bank recommended a one-month ringgit put option against the dollar with a so-called reverse knock-out price, according to a research report issued yesterday. This type of derivative is a cheaper alternative to a regular option because the knock-out barrier limits the maximum return.
“The drivers of Malaysia’s balance of payments dynamics are turning against the ringgit,” Goh Puay Yeong, a currency strategist at the bank, which is the third-biggest trader of foreign exchange, wrote in the report. “With oil prices falling, Malaysia’s export buffer from energy-related commodities is also rapidly thinning.”
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