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Oct 18 - 05:55 AM

EUR/USD - FX Options Price Is Telling For EUR/USD Short Term Outlook

By Richard Pace  —  Oct 18 - 04:22 AM
  • FX options thrive on volatility and use implied volatility to gauge premium

  • 1-week expiry implied volatility is very low at just 4.5

  • Premium for a simple vanilla straddle just $57-pips in either direction

  • That's how many pips holders must capture with related hedging to break-even

  • Unhedged options need spot to be $57 pips away from option strike at expiry

  • Options seemingly expect more near term consolidation close to 1.1600

  • Bias still down medium term, and there's a cheap hedge for that nL1N2RE0EK

For more click on FXBUZ


EUR/USD 1-week expiry implied volatility Click here

Source:
Refinitiv IFR Research/Market Commentary

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