Foreign exchange option expirations for April 26th are now in, with options set to expire at the New York cut at 10:00 Eastern Time, according to the Depository Trust & Clearing Corporation. These FX options should be on your radar, as they can potentially influence the volatility of currency markets.
For the EUR/USD pair, the following Euro amounts have been listed for April 26th:
– 1.0900 with 2.6 billion
– 1.0925-40 with 2.6 billion
– 1.0950 with 2.5 billion
– 1.0955-60 with 1.7 billion
– 1.0970-75 with 1.4 billion
– 1.1000 with 1.5 billion
– 1.1030-45 with 2.1 billion
GBP/USD options are also set to expire, with the following British Pound amounts due:
– 1.2350 with 487 million
– 1.2400-10 with 718 million
USD/JPY option amounts that are set to expire soon are the following:
– 133.00 with 584 million
– 133.40-50 with 839 million
– 134.00 with 397 million
– 134.40-50 with 500 million
USD/CHF is another currency pair with options due to expire. The upcoming expiration amounts are as follows:
– 0.8925 with 610 million
– 0.8990-00 with 800 million
And finally, AUD/USD options are set to expire with the subsequent Australian Dollar amounts:
– 0.6625-30 with 589 million
– 0.6650-60 with 1.2 billion
– 0.6700 with 839 million
An FX option or currency option is a contract that grants the buyer the right (but not the obligation) to buy or sell a specified amount of foreign currency at an agreed-upon exchange rate before a specified future date. FX options can be traded on various currency pairs, and are used in a variety of situations, including hedging currency risk, speculating on potential future movements in exchange rates, and arbitraging opportunities between different markets.
The expiration of an FX option can influence the volatility of the currency market, especially if it is a large notional amount. When a large option expiry level is near, market participants may attempt to “push” the market in one direction to achieve more favorable rates on their options positions. Additionally, the anticipation of the expiry can potentially lead some investors to adjust their positions in the lead-up, potentially causing the underlying spot FX rate to move toward the option strike price.
As a trader, it is essential to be aware of the expiration of large options, as they can influence the behavior of the foreign exchange market. One common strategy for trading around these events is to enter orders at or near the option strike price before the cut. This can sometimes provide an opportunity for profit, as certain market participants may push the market in the direction they desire. Additionally, some traders may choose to place stop orders on either side of the expiry levels as a way of managing risk, especially if they believe the market will shift dramatically in one direction after the options expire.
In conclusion, keeping an eye on FX option expirations is crucial for traders who operate in the forex market, as these events can potentially affect the behavior and the volatility of currency prices. Knowing the levels where options are expiring on major currency pairs can help you make more informed decisions when trading and managing your risk.
