Trading FX implied volatility
REAL-LIFE PROBLEMS, INNOVATIVE SOLUTIONS
BACKGROUND
There is increasing demand to trade FX implied volatility as an asset class in its own right. Much of this demand comes from the fund management community looking for new sources of alpha. However, there are a number of difficulties in trading volatility, with one of the major issues being how to practically trade the volatility signal in the market. There are now a number of ways of trying to trade implied volatility (especially with the rapidly increasing liquidity in the forward
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