There was chatter in the markets that the auction was quite slow – suggesting traders may be more nervous of Italian debt since the downgrade.
The FCA launched its formal inquiry into foreign exchange rates in October after claims suggesting traders at banks had pooled information about their positions with those at other firms to manipulate a rate used by fund managers to buy foreign currencies in the $5tn-a-day 5tn-a-day
The put activity here suggests traders are prepared in case shares of the underlying slip ahead of August expiration.
The value of pound fell immediately after the figures were released, with sterling down almost half a cent to $1.3126, suggesting traders believe a rate rise next month is less likely.
Big business tends to welcome Republican policies, and the recent stock market rally suggests traders believe U.S. companies will benefit from President Donald Trump's promised tax cuts and elimination of regulation.
What's amazing is how sanguine the options markets have been – they are not pricing in significant volatility, which suggests traders are still reasonably confident that a deal will be done.
Selling the put options at the Jan . 2012$15 strike suggests traders are willing to have shares of the underlying stock put to them at that price if the puts should land in-the-money by expiration.
In New York, an exchange traded fund that tracks sterling, the CurrencyShares British Pound Sterling Trust, lost 1.5%, while the CurrencyShares Euro Trust rose 0.5.% Oil futures were down $1.78, to $38.28 on the New York Mercantile Exchange, suggesting traders did not think OPEC's record 2.2 milion barrels per day output cut on Wednesday would support prices.
In the bond market, where traders often run to safety, the interest rate on a 10-year Treasury note was down to 2.60percentt, suggesting traders were getting nervous.
Around a month ago, futures contracts suggested that traders put the chance of a cut in the federal funds rate at 90percentt.
