Tarns gain favour as investors seek to exploit range-bound pairs

Having been shunned by risk-averse investors after the financial crisis, target accrual redemption notes (Tarns) have made a comeback, and dealers claim that clients are now better able to understand and manage the risks involved.

Comprised of a strip of leveraged options that redeem once a pre-set profit target is reached, Tarns are particularly popular with clients wanting to express a view that a currency pair will remain within a certain range. That feature has made the product particularly