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.
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FX option expiries for May 27 NY cut at 10:00 Eastern Time, via DTCC, can be found below.
– EUR/USD: EUR amounts
- 1.0930 871m
- 1.0990 1.0bn
The EURUSD pair has found some support overnight at the 1.0950 level and is currently oversold on our one hour chart. Price action was capped just under the key 1.10 level in yesterday’s European and US session but a large €1B option expiry at 1.0990 will act as a magnet. Caution should be noted as there are key ECB policymaker speeches due this morning, including Ms Lagarde.
– GBP/USD: GBP amounts
- 1.2500 460m
Cable is coming off a bull run where it ran into resistance at 1.2362 after HM Gov announced an easing of lockdown measures and where the ECB policymakers eased their stance on fishery rights which might open the way to more successful trade talks next month. Even so, the 1.25 option looks well out of play as the pair remains in a bear channel due to profit-taking.
– USD/JPY: USD amounts
- 107.80 868m
- 107.90 889m
- 108.15 1.0bn
After a corrective double top downturn, the USDJPY pair is in a consolidation phase. A breakout is imminent, the likely candidate is a continuation to the bear move.
– AUD/USD: AUD amounts
- 0.6600 1.1bn
- 0.6650 633m
The AUSUSD pair is stuck in a low volume sideways action and the 0.6650 cut is right in the middle. Expect a continuation in this motion as price action is thin.
– EUR/GBP: EUR amounts
- 0.8900 794m
EURGBP is in a sideways move as it consolidates looking for the next breakout. The pound has been firming over the last 24 hours and ECB policymaker speeches due in the next few hours may set the tone for the next move out of this price action phase. The 0.8900 is a large expiry and looks to be very much in play.
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As you can see on the charts 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.
