6min chapter

The Macro Trading Floor cover image

Diego Parrilla: China Is Running Out Of Options

The Macro Trading Floor

CHAPTER

What's the Trade That Propose?

The option market is an insurance play. In this case, we put a strike that is slightly out of the deband. By going very little out of the money, you get a very significant discount. The worst case for us is obviously the break, the peg stays. Ah, in which case the ouption could expire worthless. And and that's a risk we're very happy and willing to take a depending on how much you want asize.

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