Cost of Hedging Lira Hits 8-Month High: Inside Turkey

Options flows indicate traders are maintaining bearish bets on the Turkish lira even after US President Trump signaled the Iran war could end soon. The persistence of bearish positioning and elevated options-implied risk suggests the lira remains vulnerable and tail-risk premia are still priced in. This keeps emerging-market FX volatility and risk premia elevated until clear de-risking in options positioning or fundamentals materialize.

Analysis

Options flows indicate traders are maintaining bearish bets on the Turkish lira even after US President Trump signaled the Iran war could end soon. The persistence of bearish positioning and elevated options-implied risk suggests the lira remains vulnerable and tail-risk premia are still priced in. This keeps emerging-market FX volatility and risk premia elevated until clear de-risking in options positioning or fundamentals materialize.