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 June 5 NY cut at 10:00 Eastern Time, via DTCC, can be found below.
– EUR/USD: EUR amounts
- 1.1235 900m
- 1.1250 892m
- 1.1300 600m
The EURUSD pair is overbought on the one hour chart but we are in uncharted waters up at this multi-month high of 1.1370 at the time of writing. Potential for a pullback/consolidation phase as the market takes stock of these new levels and general weakness in the US Dollar. Yesterday’s saw a flat refusal to pull under the 1.1200 key round number for the pair. The next big test will be US Non-Farm payrolls and associated data release before the New York Cut at 10 AM. Eastern time. Until then the 1.1300 maturity is in play.
– USD/JPY: USD amounts
- 108.80 1.0bn
USDJPY is in a bull trend which remains true of yesterday’s analysis where we suggested the price action had more upside to run. Price action is subdued and the one hour chart is overbought. US data out later applies just as much here also. The maturity at 108.80 looks unlikely but is only 46 pips away from the current price action. Watch for a break under the lower trend line to confirm downside and a break in the trend to the maturity.
– USD/CAD: USD amounts
- 1.3400 969m
- 1.3500 2.3bn
USDCAD is in a descending wedge formation with pressure building to the downside. The narrow trading range of late tells us the market is unsure of directional bias. Overall US dollar weakness is the main driving factor in the strength of the Loonie. Again, US and Canadian employment data due out before the New York cut will define the next trend in price action. The 1.3400 maturity looks the most likely candidate in current conditions.
………………………………………………………………………………………………………………………..
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.
