Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.
FX option expiries for July 16 NY cut at 10:00 Eastern Time, via DTCC, can be found below.
– EUR/USD: EUR amounts
- 1.1320 519m
- 1.1350 2.0bn
- 1.1400 853m
- 1.1435 570m
- 1.1450 712m
- 1.1550 880m
EURUSD pair should remain elevated pre-Euro Covid pandemic relief package decision. Interest rate decision and US data out later could all cause big swings before the 10 AM cut.
– GBP/USD: GBP amounts
- 1.2510 369m
GBPUSD recent trend lines have held true. So, the writing is on the wall; bears are in control. The 1.2510 option remains in-play. Expect turbulence as the Euro zone interest rate and US data is released pre the 10 AM cut.
– USD/JPY: USD amounts
- 107.25 576m
- 107.30 556m
- 107.35 410m
USDJPY, lots of support and resistance lines to consider, with tight consolidation ruling the pair momentarily. A break above 107.00 with the resistance subsequently forming support will pave the way for the cluster of 3 option expiries. US data will play a part in price action later.
– AUD/USD: AUD amounts
- 0.6980 563m
AUDUSD, we see evidence of price capping to the upside and price action fading and failing to find support above the psychological 0.70 level. The option looks to be in-play.
– NZD/USD: NZD amounts
- 0.6510 568m
NZDUSD has topped out and is in a bear channel. The 0.6500 area is open for a retest leaving the option in play. The US Dollar will lead the way today.
As you can see on the preferred 1-hour chart(s), we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled in red, orange and blue. Therefore, if you see option expiry exchange rates labelled in red these should be considered in-play, because we believe there is a greater chance of the expiry maturing at these levels based on technical analysis at the time of writing. There is still a lesser possibility of a strike if they are in orange and so these are ‘in-play’ too. However, if we have labelled them in blue, they should be considered ‘not in-play’ and therefore price action would be unlikely to reach these levels, which are often referred to as Strikes, at the time of the 10 AM New York cut.
Our technical analysis is based on exchange rates which may be several hours earlier in the day and may not reflect price action at the time of the maturities. Also, we have not factored in economic data releases or keynote speeches by policymakers, or potential market volatility leading up to the cut.
Although we have added some technical analysis, we suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage. Remember the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 AM Eastern time.
If you want to learn how forex option expiries affect price action in the spot FX market see our educational article by clicking here: https://bit.ly/2VR2Nji
DISCLAIMER: Please note that this information is for educational purposes. Also, the maturities will look more or less likely to become a strike at 10 AM NY time due to exchange rate fluctuations resulting in a different perspective with regard to technical analysis, and also due to upcoming economic data releases for the associated pairs.