EUR/USD: Option traders busy buying 'in the money' calls

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 7, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Bali) - Preliminary data from the CME Group shows that option traders were busy buying 'in the money' EUR/USD calls during yesterday's session, suggesting potential upward pressure for today.

    Upside bets in the Oct contract

    For the October contract, to expire end of this week, open interest for 'in the money' calls increased by 403 contracts, while in the money put saw a reduction of 54. The fact that 'out of the money' puts also increased significantly by 961, further corroborates the notion that option participants are betting for a higher EUR/USD short term ahead of the expiration.

    Nov contract shows similar story

    Even the November contract also showed the commitment to buy EUR calls 'in the money' (at 96) to be substantially higher than those buying 'in the money' puts. Should a decrease in value be seen in the early stages of Europe, it is probable that 'gamma scalping' strategies could be at play, cashing in on recent gains off sub 1.12.
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