Turkish elections to be held on Sunday 24 June 2018

If Erdogan gets a 4th term with an outright victory on Sunday, expect the latest constant pressure on TRY over internal, external and monetary policies to continue. If by any chance one of the opposition candidates would get a foot inside the door, most likely that would be Ince, there will be a second round coming on the 8th July and TRY may see some form of a relief rally, but for how long I wonder. It’s going to be tough to form a majority against the ruling bloc imo.

It goes without saying there’s a massive premium if one wants to protect any positions or tries to take advantage of the outcome. Weekly option vols trade close to 40%.
Currently USDTRY is turning around 4.70. Monday’s expected move is priced in for at least 3%. The spec buyers of such options will try to make cash on their purchases and premiums paid. All things equal, we can expect some bids around 4.55 or offers around 4.85 on first rounds of gaps imo.
The option reports don’t show massive interests inside a 5% move so far but not everything is shown publicly 😉

Here are some links for those following the events and the currency from CNN , Politico , and Bloomberg for your reading.

Stay safe and happy hunting

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