Categories
Forex Options

FX Options Market Combined Volume Expiries for 19 May

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 Options Market Combined Volume Expiries due at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

  • 1.0845 755m
  • 1.0860 1.0bn
  • 1.0890 595m

 

– GBP/USD: GBP amounts        

  • 1.2200 261m
  • 1.2300 429m

– USD/JPY: USD amounts         

  • 106.50 351m
  • 106.65 460m
  • 106.75 1.3bn
  • 107.00 532m
  • 107.35 640m
  • 107.65 418m
  • 107.75 1.1bn
  • 108.00 452m

………………………………………………………………………………………………………………

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 key note 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.

Categories
Forex Options

FX Options Market Combined Volume Expiries for 18 May 2020

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 Options Market Combined Volume Expiries due at 10:00 Eastern Time, via DTCC, can be found below.

EUR/USD: EUR amounts

  • 1.0700 793m
  • 1.0800 529m
  • 1.0875 564m
  • 1.0900 1.1bn

– GBP/USD: GBP amounts

  • 1.2050 227m
  • 1.2200 292m

– USD/JPY: USD amounts

  •   107.50 2.2bn

– AUD/USD: AUD amounts

  • 0.6495 634m

– NZD/USD: NZD amounts

  • 0.6000 733m

 

………………………………………………………………………………………………………………

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 key not speeches by policymakers, or potential market volatility leading up to the cut.

We have added some technical analysis but 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.

Categories
Forex Options

FX option expiries for May 15 New York cut

Thank you for visiting the Forex.Academy FX Options 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 commutative 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’ if labelled as Hot or Warm, or ‘out of play’ if labelled Cold with regard to the likelihood of price action meeting the strike price at maturity.

…………………………………………………………………………………………………………………..

FX option expiries for May 15 NY cut

FX option expiries for May 15 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

  • 1.0700 859m
  • 1.0800 569m
  • 1.0900 711m

– GBP/USD: GBP amounts        

  • 1.2085 209m
  • 1.2250 256m 

   

– USD/JPY: USD amounts         

  • 106.00 939m
  • 106.25 1.4bn
  • 106.50 1.3bn
  • 107.00 2.4bn
  • 107.50 2.2bn
  • 108.00 2.5bn

– AUD/USD: AUD amounts

  • 0.6400 534m 

– USD/CAD: USD amounts

  • 1.4085 756m 

………………………………………………………………………………………………………………

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 them as cold, warm or hot.

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, heat levels may change throughout the day in line with the exchange rate fluctuations due to technical analysis trading and upcoming economic data releases of the associated pairs.

Categories
Forex Options

FX option expiries for May 13 New York cut

Thank you for visiting Forex.Academy’s FX Options Expiries Section. Each day, where available, Forex Academy will bring you notable maturities in FX Options of volumes of $100 million-plus, as these large commutative maturities at the specified currency exchange rates often have a magnetic pull on price action, especially in the hours near their maturities. These happens daily at 10.00 AM Eastern time. This effect is due to the big institutional players hedging their positions using option derivatives. Each option expiry has to be considered ‘in-the-money’ if labelled as Hot and Warm, or ‘out of the money’ if labelled Cold with regard to the likelihood of price action meeting the strike price at maturity.

…………………………………………………………………………………………………………………..

FX option expiries for May 13 New York cut

FX option expiries for May 13, NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– USD/JPY: USD amounts         

  • 106.00 429m
  • 107.00 861m
  • 107.40 1.1bn


– GBP/USD: GBP amounts        

  • 1.2440 350m


– AUD/USD: AUD amounts

  • 0.6500 1.0bn 

– USD/CAD: USD amounts

  • 1.4000 1.5bn


– EUR/GBP: EUR amounts

  • 0.8740 420m
  • 0.8750 362m

………………………………………………………………………………………………………………

As we can see on the charts we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled them as cold, warm or hot.

Therefore, if you spot exchange rates labelled as warm or hot, these should be considered In-Play. That is because we believe there is a greater likelihood of the expiry maturing at these levels based on the technical analysis at the time of this writing. However, if you see them labelled as Cold, they should be considered Not In-Play; thus it would be unlikely that price action could reach these levels, which are referred to as Strikes, at the New York’s cut time. Please consider that upcoming economic data releases are not factored in, nor did we take into account policymaker speeches that may modify the technical analysis outlook in the hours leading up to the expiration.

We suggest you plot these levels onto your own trading charts and combine this information into your own trading methodology in order to use the information to your advantage.

Remember the higher the volume of interest, 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, heat levels may change throughout the day in line with the exchange rate fluctuations due to technical analysis trading and upcoming economic data releases of the associated pairs.

Categories
Forex Options

FX option expiries for May 5th New York cut

Thank you for visiting the Forex.Academy FX Options 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 commutative 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. Each option expiry should be considered ‘in-play’ if labelled as Hot, Warm or ‘out of play’ if labelled Cold with regard to the likelihood of price action meeting the strike price at maturity.

…………………………………………………………………………………………………………………..

FX option expiries for May 5 NY cut

FX option expiries for May 5 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

 EUR/USD: EUR amounts

  • 1.0955 637m 


– GBP/USD: GBP amounts   

  • 1.2470 274m


………………………………………………………………………………………………………..

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, heat levels may change throughout the day in line with the exchange rate fluctuations of the associated pairs.

Categories
Forex Course

6. Different Ways Of Trading The Forex Market

Introduction

Forex is a market to trade foreign currencies. It is traded 24 hours electronically over-the-counter, meaning the transactions are performed over the networks around the world. One way to trade the forex market is for one party to buy a currency, and the other to sell it. This method is referred to as spot forex trading. Apart from this, there are other ways to trade the Forex market. And in this lesson, we shall discuss these different ways.

Forex market and its types

If we were to consider the primary forex market asset types, we could find four. They are:

Spot Forex Market

Currency Futures

Currency Options

Currency Exchange-traded funds

Now, let us explain the working of each one of them in detail.

Spot Forex Market

As discussed, in the spot forex market, currencies are bought and sold for a short period of time, based on the current market price (CMP). The prices in this market are settled in cash, on the spot, bases on CMP. Hence, the spot market is also called a ‘cash market’ and ‘physical market.’ The settlement of orders in the spot market takes two days, while in the futures market, it takes much longer.

Spot trading is the most popular form of trading where the majority of the retail traders trade on. There is great liquidity in this market, and brokers even offer tight spreads on them. Apart from retail traders, other participants in this market include commercial banks, central banks, arbitrageurs, and speculators.

Currency futures market

In the currency futures market, the buyer buys a contract of one currency by paying another currency. While the seller of the contract holds the opposite obligation. And this obligation is due on the expiration date of the future. The ratio of the currencies is settled in advance between both the parties (the time when the contract is made). The parties make a profit or a loss depending on the difference between the real effective price on the date of expiry and the settled price.

Currency Options

A currency option is a type of options contract that gives the buyer the right, but not the obligation, to buy or sell a currency pair at a given price before a set time of expiry. To get this right, the holder of the option pays a premium to the seller who is known as an option seller.

There are two types of currency options, ‘Call option’ and ‘Put option.’ A call option gives the buyer the right to buy a currency pair at the strike price before the expiry date. A put option gives a buyer the right to sell a currency pair at the strike price before the expiry date. Currency options are a popular way of protecting against loss.

Since the options are a bit complex, let’s understand them with an example. If you believe that the price of the Euro will rise against the US dollar, you can buy a currency call with a strike price of 1.31000 and expiry at the end of the month. If the price of EUR/USD is below 1.31000 on the expiration day, the option expires worthless, and you would lose the premium paid. On the other hand, if EUR/USD increases to 1.50000, you can exercise the option and buy the currency for 1.31000 (At strike price). By doing this, you have generated high returns on your investment by using options.

Currency exchange-traded funds

Back then, Exchange-traded funds (ETFs) were only available for the stock market. But in the present, ETFs have expanded to the Forex market as well.

A currency ETF is a fund that clubs a single or typically a bunch of currency pairs. These funds are managed by financial institutions and are offered to the public for purchase on an exchange board. Hence, one can trade ETFs just like any share on the stock market.

These are the four primary ways of trading the Forex market. Now take the quick quiz below to know if you have understood the above concepts.

[wp_quiz id=”42577″]