Option trade flows had seen strong demand and premium gains for sub 1-month expiry 1.1200-1.1300 strikes, which allow holders to buy EUR/USD at those levels if better than the spot price at expiry. Those options are being pared.

Risk reversals are an option volatility trade that benefit from increased FX volatility in a particular direction. The benchmark 1-month expiry 25 delta contract had posted new 4-year highs for EUR calls over puts at 0.4 amid the late August spot highs (EUR/USD topside over downside strikes), before quickly reverting to 0.1 EUR puts over calls (downside strikes). The contract had recovered a 0.2 topside strike premium on Friday, before slipping to 0.1 EUR calls thereafter.
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