Large Currency Options Set to Expire—Market Movement Expected

Wednesday, April 23, is witnessing a torrent of material FX option strike expiries that may add new volatility to world currency markets. The DTCC statistics indicate that among some of the biggest expirals for the New York cut at 10:00 ET are EUR/USD on the 1.1400 strike for a whopping €2 billion notional, as well as large clusters at 1.1370 (€929 million), 1.1375 (€863 million), and 1.1510 (€847 million). USD/JPY is up for a big $430 million at the 140.55 strike, whereas USD/CHF has $550 million at the 0.8000 strike and $450 million at 0.8450.

 

The Australian dollar is also on the radar, with 0.6300 (A$1.2 billion) and 0.6355 (A$1.1 billion) AUD/USD expiries which may have an effect on near-term price direction. These high expiries tend to be magnets for spot levels, particularly as the New York cut falls due, and can set off abrupt moves when broken.

 

With market players closely observing central bank opinions and economic indicators, today's expiries will be the key driver for intraday FX volatility and positioning.

 

Source: FXStreet, CME Group