Forex option expires for the 10am (14.00 GMT) New York cut 23 March 2018
EURUSD is ending the week with a big whack of expiries.
With the barrier removed at 105.00 in USDJPY, that leaves the downside options picture a little lighter. We’re hearing that there’s still no real concern about the downside from options players and that short-term coverage is still relatively cheap. 1-3m buying of nearby downside JPY calls twinned with selling lower strike JPY calls have been seeing some decent business. That’s pretty much a low risk play if the price falls under the top end strike, maybe something like a 104-101 spread. Traders are risking a small amount (the premium) for bigger rewards (potential to have a short at 104 and a buy at 101 = 300 pips less premium). Overall, it means that there’s still no real downside coverage in the options market, so traders aren’t expecting the price to fall much further or see much volatility if it does.