There's been good demand for implied volatility on dips, especially USD/JPY, and for the 2-month expiry date, which captures a host of December's key central bank policy decisions.
USD/JPY erased 113.00-114.00 option barriers, but 115.00 is much bigger.
If broken, related short gamma will be exacerbated by a significant drop in the size of existing vanilla option positions above, potentially fuelling short covering and more volatility. nL1N2RB0KH
Implied volatility is already retesting the week's highs, but from a mid-6 handle, it's got room to run.
One-month JPY puts demand a rare premium to calls, which can boost implieds if USD/JPY keeps rising.
EUR/USD settles around 1.1600, and although downside premiums have eased, they remain intact.
Implied volatility has been bought on dips, especially 2-month, which captures December 15/16 U.S and European Central Bank decisions, with their risk of increased volatility. nL1N2RB0J7
GBP/USD vols also bought on dips, with 2-month favoured for its December 16 BoE inclusion. nL1N2RB0WE
One-week lira options captured Turkey's policy decision, but the market seems ready for further cuts and lira losses. nL1N2RB0IM
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