After recent months’ volatility, last week’s data and expected US and BoJ data coming out this week, it puts the pair in light of interesting options trading opportunities. If you want to speculate on a pull back from the USDJPY highs or simply maintain your long spot position without fearing being stopped out due to volatility, one interesting option is the USDJPY 37% delta PUT with the strike of 117.94 being the recent resistance level and now the new support level. It is trading for the price of 34,800.74 (294.30USD) on a one lot and expires Nov. 28, after Japan’s CPI on the 27th. The next level of resistance is 116.66 where if trades to that point within the duration time of the options, can yield profit of 267% on the cost of the option. Your maximum loss is that of the price paid for the option.
Below you can view a table of the greeks calculated to this option with different NPV by rate scenarios and a payout graph at expiry. Note that you will begin profiting on the option once the direction of the spot is downward.
This is not a recommendation to trade but a suggestion option idea.
Below you can view a table of the greeks calculated to this option with different NPV by rate scenarios and a payout graph at expiry. Note that you will begin profiting on the option once the direction of the spot is downward.
This is not a recommendation to trade but a suggestion option idea.
Recommended Content
Editors’ Picks
AUD/USD jumps above 0.6500 after hot Australian CPI data
AUD/USD extended gains and recaptured 0.6500 in Asian trading, following the release of hotter-than-expected Australian inflation data. The Australian CPI rose 1% in QoQ in Q1 against 0.8% forecast, providing extra legs to the Australian Dollar upside.
USD/JPY hangs near 34-year high at 154.88 as intervention risks loom
USD/JPY is sitting at a multi-decade high of 154.88 reached on Tuesday. Traders refrain from placing fresh bets on the pair as Japan's FX intervention risks loom. Broad US Dollar weakness also caps the upside in the major. US Durable Goods data are next on tap.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.