Dual currency deposits benefit from short-vol views
LONDON & PARIS - Dealers are reporting a rise in activity in the dual currency deposit (DCD) market, as investors look to express short volatility views as a result of falling implied volatility.
A DCD is a fixed deposit that pays higher yields versus typical deposits for taking the risk of receiving the deposit back in an alternative pre-agreed currency at maturity. That is dependent on the bank holding the deposit, exercising an option if a pre-agreed strike is triggered during the term of the
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