Breaking a currency isn't so easy
The most-popular trade of all heading into 2016 was a bet against the Chinese yuan.
Hedge funds poured money into the trade early in the year and it pushed the US dollar higher in the first week of the year. Since then, however, it's been a steady and sometimes sudden drop. It's now flat on the year.
Bloomberg reports that many would-be George Soros' are feeling the pain:
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.
Soros made his name for a massive bet against the pound and the Bank of England's ability to defend it. It's one of the greatest trades of all time but had he missed slightly on the timing or if the BOE had dug deeper for one last defense, he might have been relegated to the dust-bin of hedge fund history.
