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13

China Burns Hedge Funds as $562 Million Yuan Bet Turns Worthless

By Tony Seruga

Options on weaker yuan fail to pay out as PBOC intervenes
More than $800 million of contracts to lapse in three months

The battle over the fate of China’s currency is starting to get bloody for the bears.

Seven months after a shock devaluation spurred hedge funds and other speculators towager on further declines, the yuan’s unexpected resilience has turned many of those bets into losers. At least $562 million of options that pay out if the currency drops below 6.6 per dollar — its weakest point since the devaluation — have expired worthless since August. Another $807 million will lapse within three months…

China Burns Hedge Funds as $562 Million Yuan Bet Turns Worthless

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