The U.S. data released today has caused commotion in the markets. Durable Goods Orders and Core CPI came out strong, however this was mixed with a bad Jobless Claims figure of 313K versus 290K expected.
This has brought about some major action in the EUR/USD pair opening up the opportunity to place a one-day option trade.
Below is a chart showing the huge decline in EUR/USD over the last two days.
With this strong decline, buying a 1 day ATM (at-the-money) Call option, to trade a rebound, is now very cheap; the quick decline in EUR/USD has caused the price of Call options to drop sharply.
The below chart and table shows the profit or loss, at expiry, of an ATM EUR/USD call option over a range of market rates. The deal size of the option is 100,000 and the strike at time of trade placement equals the spot rate at 1.1210. This trade will expire tomorrow at 15:00 GMT after U.S. GDP and Personal Consumption data. If EUR/USD, at expiry, is trading 60pips above its current level you will profit 100%. Note that, today the pair declined around 150 pips in a few hours alone!
This has brought about some major action in the EUR/USD pair opening up the opportunity to place a one-day option trade.
Below is a chart showing the huge decline in EUR/USD over the last two days.
With this strong decline, buying a 1 day ATM (at-the-money) Call option, to trade a rebound, is now very cheap; the quick decline in EUR/USD has caused the price of Call options to drop sharply.
The below chart and table shows the profit or loss, at expiry, of an ATM EUR/USD call option over a range of market rates. The deal size of the option is 100,000 and the strike at time of trade placement equals the spot rate at 1.1210. This trade will expire tomorrow at 15:00 GMT after U.S. GDP and Personal Consumption data. If EUR/USD, at expiry, is trading 60pips above its current level you will profit 100%. Note that, today the pair declined around 150 pips in a few hours alone!
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