The US Dollar is stronger this morning aided by the escalating situation in the Middle East. As of this morning the Associated Press had reported the brief presence of Israeli ground troops in Southern Lebanon. Despite calls from G8 leaders who met in St Petersburg this weekend, there is no sign of an imminent ceasefire. The continued and escalating violence has caused international stock markets to decline and oil prices to rise to new record levels.
EUR/USD vols remain firm this morning caused by the rally in the Greenback. USD/JPY vols have sold off with a reported large amount of USD/JPY risk reversals being sold, putting pressure on vols. Skews still favor JPY calls and EUR calls but the smile has relaxed from previous weeks.
OPTION TRADE IDEAS
Below please find some strategies, which depending on your view might be applicable. Please bear in mind that all of these trades can be applied to any of the currency pairs, which may be traded. All barrier levels, strikes, triggers, payouts, and maturity dates can be tailored to each individuals views.
View: EUR/USD will continue its retreat downwards.
Trade: Purchase a 1 week EUR/USD One Touch Option
View: GBP will appreciate against the USD this week
Trade: Purchase a 1 week GBP/USD Digital call
View: NZD/USD will move to the upside this week
Trade: Purchase a 1 week NZD/USD One Touch Option
View: EUR/GBP will remain in a tight range this week
Trade: Purchase a 1 week EUR/GBP Double No Touch Option
For further details, please contact the options dealing desk at 1.212.897.7660 or toll free at 1.888.50.FOREX.
