BRL options traders count cost of Lula shock

















































BRL options traders count cost of Lula shock – FX Markets



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One-way Bolsonaro bets forced dealers into tough hedging choices as USD/BRL gapped 13% on Lula’s victory


Brazilian real notes

The surprise re-election of Luiz Inácio Lula da Silva last week has left Brazilian real options dealers counting the cost of a result the market dreaded but had been certain would not happen.

Going into the October 25 runoff, prediction markets had Flávio Bolsonaro comfortably ahead after his own surprise win in the first round earlier in the month, and macro hedge funds had positioned almost entirely for a stronger real through limited loss FX options structures, alongside long positions in

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