MSIM cuts third of FX options volume amid market contraction

Morgan Stanley Investment Management (MSIM) reduced its foreign exchange options book by a third in the first quarter of the year as the broader market of US mutual funds trading the instrument contracted by 26%.

The move dealt a serious blow to BNP Paribas, which lost almost 90% of its volume over the period, falling from third position in the dealer rankings in Q4 2021 to eighth in Q1 2022.

The overall space shed $20 billion of volume in the quarter, settling at roughly $58 billion. That is