OPTION VOLATILITIES
The Federal Reserve, as many anticipated, decided to halt their string of seventeen consecutive interest rate hikes last week by keeping rates steady at 5.25%. Comments following the much anticipated FOMC meeting cited economic data as the catalyst for any further rate hikes. A major terror plot involving American airlines traveling from the UK to the US was thwarted last week. The threat caused major delays for flights leaving the UK and the US and elevating the terror threat level in both countries. Tensions in the Middle East abated over the weekend with both Israel and Lebanon accepted a US/French brokered UN cease fire.
The US dollar is trading at two week highs aided by a much better than anticipated retail sales number. The week ahead is full of key data that will be closely watched to see if the Fed has any grounds for a rate hike at their next meeting.
Volatilities are markedly lower this week with many traders out enjoying what is left of the summer.
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 decline next week
Trade: Purchase a 1 week EUR/USD One Touch Option
View: The GBP/USD will decline
Trade: Purchase a 1 week GBP/USD Digital Put Option
View: The NZD/USD will not trade below the .6300 support level
Trade: Purchase a 1 week NZD/USD No Touch option
View: USD/JPY will settle into a range this week.
Trade: Purchase a 1 week USD/JPY Double No Touch
For further details, please contact the options dealing desk at 1.212.897.7660 or toll free at 1.888.50.FOREX.
