FX Options expiry - How to benefit from them?

[Neutral]

How would one determine a position to take based on FX options expiry information?

For example.
Option expiries for todays 14:00 GMT cut

EUR/USD: 1.4430, 1.4200

USD/JPY: 77.00, 77.20, 78.25, 80.00, 81.00

AUD/USD: 1.1015, 1.0925

Would this mean just before 14:00 GMT if the above targets are not met there will be a mass close of positions, hence volatility?

I guess I'm asking, how would a trader benefit from knowing the above FX options expiry data and what strategy could you employ?

 

[cutz]

EUR/USD: 1.4430, 1.4200

USD/JPY: 77.00, 77.20, 78.25, 80.00, 81.00

AUD/USD: 1.1015, 1.0925
[/I]

Hello,

I can't really answer your question because I’m only familiar with equity options but are they strikes you have quoted?

 

[Neutral]

Hello,

I can't really answer your question because I’m only familiar with equity options but are they strikes you have quoted?

I have no idea as options are not my forte. I only know what a call and a put is that's the extent of my options knowledge!

 

[cutz]

I have no idea as options are not my forte. I only know what a call and a put is that's the extent of my options knowledge!

Hi Neutral,

There's a bit more to oppies than meets the eye,

Suggest reading through many of the options threads that exist in the derivatives section, the principles of forex options and equity options I presume are similar.

 

[Neutral]

Hi Neutral,

There's a bit more to oppies than meets the eye,

Suggest reading through many of the options threads that exist in the derivatives section, the principles of forex options and equity options I presume are similar.

Yes I agree. Options to me seem a little convoluted but I just need to get my head around them. Right now I'm concentrating on FX though.

Based on your experience with options, would you know how to use the aforementioned FX options data to your strategic advantage?

 

[sinner]

IMHO:

* It really depends a lot! There is no concrete "meaning" to the forex opex, and benefiting from them may only provide a small edge when quantified over a long time.

* Remember, if I have a successful hedge running (say a put held against a long position) or swing position (e.g. bull spread) I would probably roll it before expiry if I wanted to keep it going, so most of the stuff coming off at expiry is people who successfully sold options to people who bought them (i.e. they are expiring worthless and the profit is on the short option side).

* The general consensus in fx options form my understanding is that the strike price acts like a magnet. That is, the numbers you quoted will tend to be acting as a strong support/resistance in the intraday frame leading up to expiry. This seems to be big players trying to **** over as many option holders as possible. If a Sovereign Wealth Fund is holding a big trade at a close strike, hedge funds or other banks might try to push the level and try to break the other holders bank during illiquid trading - the Fund might then try to defend the same level with more capital, and you end up with an impasse until expiry.

 

[Neutral]

IMHO:

* It really depends a lot! There is no concrete "meaning" to the forex opex, and benefiting from them may only provide a small edge when quantified over a long time.

* Remember, if I have a successful hedge running (say a put held against a long position) or swing position (e.g. bull spread) I would probably roll it before expiry if I wanted to keep it going, so most of the stuff coming off at expiry is people who successfully sold options to people who bought them (i.e. they are expiring worthless and the profit is on the short option side).

* The general consensus in fx options form my understanding is that the strike price acts like a magnet. That is, the numbers you quoted will tend to be acting as a strong support/resistance in the intraday frame leading up to expiry. This seems to be big players trying to **** over as many option holders as possible. If a Sovereign Wealth Fund is holding a big trade at a close strike, hedge funds or other banks might try to push the level and try to break the other holders bank during illiquid trading - the Fund might then try to defend the same level with more capital, and you end up with an impasse until expiry.

Just to confirm they are strikes.
Thanks for the info sinner. I found it very interesting even if I don't understand it all yet!