A new hawkish bet has emerged in eurodollar futures after the Federal Reserve left traders guessing last week about the timing of interest-rate increases. Open interest jumped Friday across contracts for put options, which provide downside protection, CME data compiled by Bloomberg show. The bet -- believed to be in excess of 100,000 contracts -- improves in value with a more aggressive rate-hike path than current market pricing, by selling options in May eurodollar puts and buying options in June eurodollar puts, which ultimately benefit if the May downside option expires worthless and June hike odds rise from current levels.
Bloomberg
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