FX Options Insights 16/12/24
The cash hedging of soon-to-expire FX option strikes may enhance nearby support and resistance levels, while also potentially attracting FX price movements towards each day's 10 a.m. New York cut expiry. This was clearly evident in EUR/USD last week, where there were significant expiries around 1.0500. Numerous EUR/USD strikes are positioned near 1.0500 on Monday and throughout this week, culminating in another record amount for 2024 on Friday.
The largest USD/CHF strikes are set to expire on Wednesday at 0.8900, amounting to $702 million, and on Friday at 0.8900-10, totaling $1.6 billion.
For GBP/USD, the most significant strike expiries this week occur on Monday at 1.2625 with 485 million pounds, Tuesday at 1.2640 with 580 million pounds, and Wednesday between 1.2800-15 with 1.4 billion pounds. On Thursday, there are strikes at 1.2500 for 520 million pounds and 1.2575-80 for 610 million pounds, followed by Friday at 1.2500 for 1.5 billion pounds, 1.2600 for 570 million pounds, 1.2700 for 488 million pounds, and 1.2800 for 838 million pounds.
Friday will also see substantial EUR/GBP strike expiries, including 3.1 billion euros at 0.8200, 1.2 billion euros at 0.8250, 3.1 billion euros at 0.8300, and 2.2 billion euros at 0.8345.
Notable AUD/USD strikes after those at 0.6350 on Monday include Wednesday at 0.6350 for A$1 billion, Thursday at 0.6350-60 for A$1.1 billion, and Friday at 0.6350 for A$1.4 billion and 0.6400 for A$1.2 billion.
The largest NZD/USD strikes will expire on Monday at 0.5855-60 for NZ$940 million and on Friday at 0.5850 for NZ$900 million.
The biggest USD/CAD strikes are set to expire on Tuesday at 1.4150 for $1.6 billion and on Friday at 1.4095-1.4100 for $3.4 billion and 1.4200 for $3.3 billion.
The most significant USD/JPY strikes will not expire until after the U.S. and Japanese policy announcements, with Thursday currently showing 151.70 strikes for $1.5 billion and 155.00 for $1.7 billion, while Friday's total strike expiries are currently at 152.00 for $1 billion, 154.00 for $1 billion, 154.50 for 900 million, and 155.00 for $1.6 billion.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!