May 1 (Reuters) - There are an increasing number of FX option strikes due to expire over the coming week and traders should be aware of where they reside and the related hedging effects.

There are almost 4 billion euros expiring between 1.1270 and 1.1330 on Thursday, while Friday has 1.1290-1.1300 strike expiries on 1.2 billion euros and 1.1375-85 on 1.2 billion euros.

Stand-out strikes next Monday are between 1.1285 and 1.1300 on 3 billion euros, Tuesday at 1.1325 on 800 million euros and on Wednesday at 1.1200 on 1.3 billion euros, 1.1350-60 on 900 million euros and 1.1400 on 1.1 billion euros.

The biggest strikes are at the end of next week - on Thursday at 1.1200 on 3.2 billion euros, 1.1250 on 2.2 billion euros, 1.1350 on 800 million euros, 1.1390-1.1400 on 5 billion and 1.1420 on 1.6 billion. Friday has 1.1200 strikes on 2 billion euros, 1.1300 on 1.8 billion and 1.1400-10 on 1.6 billion.

Related cash hedging flows increase as the expiry nears and often draw and contain the FX spot price to the strike if nearby.

An increase in short volatility trades such as outright vanilla option sales and range binary bets are adding to the abundance of strikes and hedging flows, which are further congesting current EUR/USD ranges.
EUR/USD FX option implied volatility


EUR/USD FX option strikes to expire May 1-9

(Richard Pace is a Reuters market analyst. The views expressed are his own)