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Decent volumes in FX options so far.........>

OPTIONS
OPTIONS: Decent volumes in FX options so far Wednesday, with the uptick in
Sino-US tensions and the breakout in the EUR clearly helping stimulate some
demand for options products this morning. Activity in EUR/USD and USD/CNY is
well ahead for this time of day, more than making up for quieter USD/HKD and
USD/KRW markets.
- Demand for EUR/USD upside exposure is helping fuel options turnover in the
pair, with close to $2 in calls trading for every $1 in puts so far Wednesday.
Vanilla call strikes at $1.1450, $1.160 have drawn focus, but sizeable
volatility hedges via $1.1565 and $1.1575 straddles are also helping underpin
the more active-than-average EUR/USD market today.
- Since the China consulate headlines crossed this morning, USD/CNY vanilla
calls have crossed in size, with 7.0050, 7.0100 and 7.0220 call strikes in
demand. USD/CNY risk reversals are yet to show any material response to the
consulate headlines, with 1m still just below the 0.35 points mark - broadly
inline with the July average.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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