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[on september 25, as the offshore rmb briefly rose above the 7 mark against the us dollar to 6.9979, this has caused a commotion in the foreign exchange options market. ]

stimulated by continued policy expectations, china's stock and foreign exchange markets have been boosted. in early trading on september 25, the offshore rmb briefly rose above the 7 mark against the u.s. dollar. as of 20:45 on september 26, beijing time, usd/cny was at 7.0113, usd/ocr was at 6.9912, and the u.s. dollar index was at 100.63.

it is worth mentioning that according to the reporter’s understanding, there are a large number of usd/offshore rmb (usd/cnh) put options at the integer mark of 7 and within the range of 500 points. previously, when the exchange rate was around 7.3, financial institutions and companies had sold the above-mentioned put options for foreign exchange hedging (selling options to put the u.s. dollar meant to be bullish on the u.s. dollar, and if they did not sell it out, they could earn guaranteed option premiums). on september 25, the us dollar/offshore rmb briefly fell below the 7 mark. among the structured products, the sale of usd/cnh american put options has been exercised, and the company is equivalent to not doing any hedging. in this context, more institutions and companies may be forced to join the ranks of being bullish on the rmb. in addition, people from all walks of life also expect that chinese companies may continue to liquidate long positions in the u.s. dollar amid expectations of a weakening u.s. dollar.

sgx stated that the market has various estimates of the size of corporate u.s. dollar positions (approximately us$400 billion to us$500 billion). according to the reporter's knowledge from industry insiders, there are currently cases of export companies taking the initiative to settle foreign exchange, but the volume is not large, and they may still wait and see the subsequent market changes.

the yuan is expected to remain strong