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EURUSD pull from the option expiration keeps the price close to the strike

10 AM expiration

The data and comments have been EURUSD bearish but maybe that is all priced in. Plus we still have that ubiquitous option expiration at 10 AM (4bln at 1.0600 strike). That seems to be exerting a pull on the price as it moved to new trading lows (at 1.0578), but has rebounded back higher toward the strike level.

For every buyer there is a seller. Each have their own hopes and wishes, but sellers of 1.0600 options benefit the most as time value rapidly declines into expiration and they benefit the most if the price settles at the 1.0600 strike (both puts and calls expire worthless). It is a game left for the professionals (they are hedging with the underlying as well), but there are wheeling and dealings that can make a large expiration an influence on a market that may be lacking in liquidity.

PS it can go horribly wrong for the option sellers too if the price starts to run away.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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