Yuan Traders Target 5% Gains as They Double Down on Options Bets
Bets on a stronger yuan are picking up in currency-option markets, with traders positioning for a move toward 6.50 per dollar by year end after the People’s Bank of China signaled greater tolerance for appreciation.
Trading in dollar-yuan options surged on Thursday to its highest since at least before President Donald Trump’s re-election in November 2024, with positioning tilted sharply for the Chinese currency to advance, including some bets of around 5%. Put option volumes worth $100 million or more — wagers on yuan gains — was double that of calls that profit from a decline, according to data from the Depository Trust & Clearing Corp.
Recent bets that the yuan will strengthen “is supported by the renminbi-fixing trend lower, suggesting central bank comfort with a stronger yuan,” said Akshay Saxena , head of FX options trading for Asia at Citigroup Inc., referring to the PBOC’s daily operations setting a reference rate.
The yuan its longest-winning streak against the dollar since 2010 this week, spurred by signs the PBOC is tolerating further appreciation after the currency rose more than 4% last year. Analysts from Citigroup Inc., Goldman Sachs Group Inc. and BNP Paribas Asset Management have further gains for 2026 as investors turn positive on China.
“We are seeing good demand for USD/CNH lower strategies such as put spreads, digital puts and exotic variants that represent a widely-held view of CNH to continue appreciating against USD in the medium term, with a typical year-end target of 6.50,” Saxena said.
Digital puts and put spreads are lower-cost strategies that still pay out if dollar-yuan declines. The former offers a fixed amount equivalent to an all-or-nothing wager, while the latter targets more modest gains than a standard put option. DTCC data showed that dollar-yuan options were the second most-traded globally by volume on Thursday.
Meanwhile, Standard Chartered Bank also reported increased demand for structures that benefit from a weaker dollar against the offshore yuan, with some clients rolling existing positions lower. This strategy involves closing out earlier trades and reopening new ones at lower strike levels to lock in gains while maintaining bullish exposure.
“Now we’re starting to see some accounts roll structures lower to lock in profit on their initial trades,” said Saurabh Tandon , global head of FX options at Standard Chartered Bank SG Ltd.
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The central bank set the currency’s daily reference rates on Wednesday and Thursday with the largest upward adjustments since late January. Recent gains have emboldened calls for further gains. Bilal Hafeez , chief executive of Macro Hive, said on Friday expects the pair will fall to 6.40.
The growing optimism comes just as US Treasury last month said that the yuan was “substantially undervalued” in its semiannual foreign-exchange , alongside a call for China to allow the exchange rate to strengthen in a timely and orderly manner.
Even so, Chinese authorities have started to step up efforts to curb the yuan’s advance, on Friday they will remove the additional charge for betting against the currency in the derivatives market from March 2.
Despite growing bets on the Chinese currency to strengthen, options markets are still pricing in a premium for dollar calls over puts, a dynamic that suggests lingering demand for protection against a renewed bout of yuan weakness.
“It’s more about the market protecting short cash positions than anyone looking for a sharp reversal in spot,” said Ivan Stamenovic , head of Asia-Pacific G-10 currency trading at Bank of America Corp.
