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Traders prep for French election

10 March 2017


Deutsche Bank analysts took a closer look at equity options and synthetics markets this week

Read more: options trading France

Traders are pricing in elevated risk around the French election, targeting specific dates and country/sector risk closely linked with France exposure.

That's according to Deutsche Bank analysts who took a closer look at equity options and synthetics markets this week as France heads towards its most unpredictable election in decades.

"Equity options are pricing in elevated risk, at times equivalent in scale to the pre Brexit run-in," wrote London-based analyst Sandeep Jain.

"But crucially this risk is mostly localised to sectors, indices and options expiries with the highest France risk exposure, including banks and peripheral European markets.

"Implied moves are large and concentrated,...