Trump suggests that a trade tariff agreement with South Korea could boost administration prospects.
by VT Markets
/
Aug 25, 2025
Donald Trump suggested that a deal with South Korea might have been reached. This could lead to positive results.
However, it’s still unclear if anyone in the administration can confirm the deal is finalized. Clear communication would help both parties involved.
Headline Risk and Market Reactions
We are experiencing headline risk, where the market responds to the chance of a deal rather than its certainty. This uncertainty has led to a rise in implied volatility for South Korean assets, making options more expensive than last week. The KOSPI 200 Volatility Index, which was going down, jumped nearly 12% this morning due to this news.
Traders who think a formal, positive announcement is coming should think about buying call options. The iShares MSCI South Korea ETF (EWY) is an easy choice, but also consider options on carmakers like Hyundai, as their export costs are crucial for any potential trade agreement. Notably, South Korea’s July 2025 export data showed a 2% year-over-year increase, which a new deal could significantly enhance.
However, from the 2017-2021 period, we recall how often “almost done” deals fell apart or got delayed, leading to sharp market changes. Skeptical traders might see the increased premiums as a chance to sell options, betting that the actual price movement won’t match the current fear and greed.
Strategies for Traders
Buying puts is a direct way to profit if the administration backs away from the statement or if the deal turns out to be less favorable than expected.
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by VT Markets
Aug 25, 2025
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