Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Mar 13 - 08:55 AM

EUR/USD - COMMENT-Earn 6:1 If EUR/USD Can Maintain Recent Range

By Richard Pace  —  Mar 13 - 07:30 AM

A big increase in FX option implied volatility reflects the uncertainty and higher risk of actual volatility in FX markets, but this could be advantageous for those who think EUR/USD will cling to its recent and familiar 1.0500-1.0950 range.

A Double-No-Touch range binary is a short volatility trade but without the unlimited risk if actual volatility should outperform over the life of the options.
The trade is a bet that 2 strikes, one either side of a chosen range, will remain untouched through the life of the option.

A 1-month expiry 1.0500-1.0950 range binary has a premium of 15% of total payout, so more than a 6:1 return.
That's with spot at current 1.0675 and a 1-month implied volatility at 9.4.
The option can increase in value if implied volatility falls and for every day that the range remains intact.

Recall EUR/USD met decent demand on setbacks toward 1.0500 last week and hasn't been above 1.0950 since making a new 10-month high at 1.1034 on Feb 2.

Related comment nL1N35L0NB

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


  • eFXplus
  • End-user license agreement (EULA)


  • About
  • Contact Us


  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2023 eFXdata · All Rights Reserved