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Oct 06 - 06:55 AM

EUR/USD - Drop Stalls At 1.1550 Option Barriers, More Below

By Richard Pace  —  Oct 06 - 04:49 AM
  • EUR/USD extends last weeks 1.1563 14-month low to 1.1552 early London

  • Well touted 1.1550 option barriers and related defence thwart drop for now

  • However, reloading with USD to sell can help to limit EUR/USD recovery

  • Much bigger option barriers/defence expected 1.1500/1.1450

  • Using barriers to hedge deeper EUR fall is very cheap hedge nL1N2R20AO

  • Option premiums increasing - 1-month implied volatility paid 5.1-5.3

  • Shows traders wary of short gamma potential below barriers

  • Short gamma/lack of option positions can increase actual volatility

  • Related comment nL1N2R20C4

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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