Some market chatter on the options

For a while, and into the end of last year, we had been noting some barriers in USDJPY, and particularly two potentially big ones at 110.00 and 115.00, that for all intents and purposes looked like a DNT play. Because we don’t often get details of expiry dates, we have been leaving them off the options board thus far in 2018, due to not hearing any confirmation that they were still in play. Many of these barriers and DNT’s can run expiries at year-end so it’s probably safer to omit them than just guess (When it comes to trading, we don’t do “guessing” at ForexFlow). So, now the chatter is coming in that a 110 barrier is in play. It may be the old one, it may be a new one. Whether it is or isn’t, we’ve got the knowledge now so we can keep an eye on it.

We’re also hearing that there may be a barrier at 1.2150 in EURUSD. We haven’t had full confirmation but it’s being touted.

As with all options, they are not a trading strategy to hang your hat on, except in some circumstances (like hearing that a big PBOC DNT is in play). What these option plays do is potentially add to the support or resistance picture around a level, so it becomes more help or hindrance to whaterever trade you are in. The more infor we have, the better placed we are to make our trading decisions.

For more information, read our explanation of Forex options and their impact on currency markets.

Ryan Littlestone

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