There’s some big options strategies playing out in EURUSD between now and the end of the year
These option plays are mainly in a very tight range and are bracketed by binary and barrier options, which has also created a ton of long gamma that needs to be managed by those holding them. This basically means that as the price moves up or down, traders can become longer or shorter than their original positions, and so they can tend to cover those positions as the market dictates. That is a big part of why EURUSD is moving at a snails pace outside of any big data or headlines (and it’s not even moving much on those).
While we don’t know the finer details of these option strats, we know the main levels they’re playing at and so we can set a plan for trading around them. That’s exactly what I’ve done in our trading room today. Now I just have to wait to see if it pans out.
It’s not often that we can find a trading opportunity against the vanilla options we hear about every day but things like barriers and these types of strategies can give us something to focus on. This is something we’re always on the look out for in the ForexFlow trading room.
Full details of the levels, and the trade ideas to play them have been set out in our trading room.
If you would like to learn a bit more about how options can affect your trading, read our guide “An explanation of Forex options and their impact on currency markets”.