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Feb 11 - 07:55 AM

EUR/USD - Chances Of New 2-Year Highs - According To Options

By Richard Pace  —  Feb 11 - 06:16 AM
  • Option binary bet that EUR/USD touches 1.2350 in next month costs 30%

  • Premium would be 30% of total payout. Drop expiry to 2-weeks - just 11%

  • 1-month digital EUR call needs spot above 1.2350 at expiry - 15%, 2wk 6%

  • 1-month 1.2350 vanilla EUR call - option to buy EUR/USD 1.2350 at expiry

  • That option costs $18-pips - so profit if spot above 1.2368

  • Option premiums (implied volatility) very low, slight premium for topside

  • Market is leaning higher, but pricing suggests patience required

  • Related comments nL1N2KH0L1nL1N2KH0QQ




For more click on FXBUZ


EUR/USD 1-3-month implied volatility Click here

EUR/USD 1-3-12-month expiry option risk reversals Click here

Source:
Refinitiv IFR Research/Market Commentary

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