Option Strategies for Yield Enhancement
It is a well known and flexible strategy to sell options in currency pairs to collect the premium and therefore create yield. The strong decline in volatility and interest rates over recent years though made it less and less attractive. On the other hand, levels of certain currencies/currency pairs and their volatility and interest rate levels currently do signal very appealing opportunities.
The beauty of the strategy is the almost unlimited possibilities to design around personal needs and risk profiles. Cash holdings have increased dramatically recently as equity markets seem to peak and talk of a global recession gets louder. Unfortunately, cash holdings meet negative yields in many currencies. Finbrix is specialised in currencies and cash management solutions and happy to explore alternatives for your cash holdings.