Brazil’s Dicey Politics Have Traders Piling Into Election Hedges

Brazilians may be a year away from voting for their next president, but investors are already plenty worried.

Measures of implied volatility for the currency show traders pricing in big swings around the October 2018 vote, even as calm pervades in the near term. The split has taken the ratio between one-year and six-month implied volatility to the highest since early 2014.

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