Hungary held a parliamentary election on Sunday. Péter Magyar, leader of the centre-right opposition Tisza party, defeated Prime Minister Viktor Orbán by a landslide.
With almost all votes counted, officials said Tisza is set to win a two-thirds majority in parliament. The party was currently on 138 seats.
The result ended Orbán’s 16-year period in office. European leaders said it would also change Hungary’s stance inside the European Union.
After the vote, the Hungarian forint rose by over 1.50% against the US dollar on the day. USD/HUF traded near a four-year low of 314.58.
With the Hungarian Forint surging, we see this as the start of a longer-term trend. We should look to gain exposure through derivative markets, such as by buying HUF call options or selling out-of-the-money USD/HUF calls to capitalize on further currency strength. The initial move is sharp, but the fundamental re-rating of the country has just begun.
We have a clear historical precedent for this from looking back at Poland’s election in October 2023. After the pro-EU coalition won, the Polish Zloty rallied nearly 10% against the dollar and the Warsaw WIG20 stock index jumped over 25% in the following four months. We expect Hungarian assets to follow a similar positive trajectory in the coming weeks.
This outlook makes long positions in BUX index futures attractive. The change in government is expected to unlock a significant amount of previously frozen EU funds, specifically the €10.4 billion from the Recovery and Resilience Facility. This capital injection will boost the domestic economy and corporate earnings, making Hungarian equities look cheap at their current levels.
The new political climate significantly reduces Hungary’s country risk premium, which will positively impact government bonds. As yields fall, we should position for this using interest rate futures. This also gives the Hungarian National Bank, which cut its key rate to 7.75% as of its last meeting in March 2026, more room to continue its easing cycle without spooking currency markets.
Finally, implied volatility, which was high leading into this election, is now collapsing. Selling USD/HUF straddles or strangles could be an effective strategy to profit from the return to political stability. The period of uncertainty is over, and we should expect calmer price action moving forward.
