Forex options expiring at the 10am (15.00 GMT) New York cut 9 August 2018
A few billion going off in close proximity in USDJPY between 110.90 & 111.50. A sizeable expiry in USDCNH too.
Option premiums peak as downside fears ease (Full Story), but still elevated
Euro hedgers can benefit from downside risk by adding barriers to EUR puts
3-mth 1.15 EUR put 106 pips, break-even 1.1394 at expiry (spot ref 1.1600)
However, add a 1.1200 knock out barrier and premium reduced to just 10 pips
Hedge protects against more limited sub 1.15 decline, adjust strikes to suit
3mth 1.15 EUR put with KO 1.13 just 3 pips, or 1.15 with 1.10 KO 40 pips
Hedge allows holder to sell spot at strike at expiry, if barrier intact
Latest posts by Ryan Littlestone (see all)
- Catch the all new Flow Show starting Monday 16th May - May 13, 2022
- Has the EUR worm turned? - April 21, 2022
- Exclusive – Large natural gas field discovered in France could ease Europe’s dependency on Russian supplies - April 1, 2022