A foreign exchange trader buys a hedge instrument to hedge against potential extreme volatility

BlockBeats News, March 17th, Forex traders are loading up on safe-haven assets to prepare for potential extreme volatility. They are closely monitoring the developments in the Middle East and getting ready for what may come next.

After the initial shock of a war outbreak and oil prices surging to $100 per barrel, investors are taking advantage of this relatively calm period to buy options with a very low probability but the potential for significant returns in the event of a sudden exchange rate movement.

Demand for hedging options against extreme exchange rate fluctuations, such as butterfly options, has increased, with Euro to Dollar options hitting the highest level in 11 months in early March. (FXStreet)