Especially the NOK spot has been remarkable stable recently despite a sell-off in equities and oil. Tactically, we still favour staying short EUR/NOK (see Reading the Markets Norway ).
However, from a risk/reward perspective, we see value in long EUR/NOK gamma positions ahead of year-end, where weakening liquidity could be a source of volatility.
Imp. EUR/NOK vol is cheap according to our monitor and we recommend buying 2M EUR/NOK straddle/strangles or alternatively, investors could consider buying 2M call options as a long NOK hedge.
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