USD/JPY:
154.00 US$2.86bn
153.00 US$2.74bn
152.00 US$1.66bn
EUR/USD:
1.1575 EUR1.44bn
1.1600 EUR996.2mn
1.1500 EUR947mn
AUD/USD:
0.7150 AUD657.4mn
0.7250 AUD622.1mn
0.7110 AUD543.5mn
USD/CAD:
1.3900 US$693.8mn
1.3800 US$535mn
1.3950 US$319.7mn
GBP/USD:
1.3630 GBP565.4mn
1.3500 GBP540mn
Q&A: FX option expiries
What exactly is an FX option expiry?
An FX option gives its holder the right, though not the requirement, to buy or sell one currency for another at an agreed rate, called the strike, on or before a set date. That date is the expiry.
Why can a large expiry influence the spot market?
It largely comes down to hedging. Banks and dealers who have written these options typically hedge their exposure by trading the underlying currency pair. As spot price approaches the strike, those hedges often need adjusting, which can generate extra buying or selling in the spot market.
Does a large expiry automatically mean price will move towards the strike?
Not necessarily, and this is worth remembering. An expiry is context, not a signal. Say EUR/USD sits at 1.1600 with a large expiry at 1.1800: that expiry likely won’t have much sway on its own. But if EUR/USD is trading at 1.1790 with only a few hours left before the option lapses, the strike becomes far more relevant to price action.
What factors matter when looking at an FX option expiry?
Its likely influence tends to hinge on a few things: how large the expiry is, how close spot is to the strike, how much time is left, how liquid the market is at the time, and whether bigger macro or headline forces are already driving direction.
Can option expiries act as support or resistance?
At times, yes. A sizeable strike can behave a bit like support, resistance, or a magnet purely because of the hedging flows around it. That’s different from traditional technical support or resistance, though, and the effect can vanish the moment the option expires.
What’s the main takeaway?
Option expiries don’t dictate where the market has to go. They’re more useful for explaining why price might behave unusually near a certain level.
How is that useful to my trading?
For short-term traders, expiries are worth keeping in view alongside the usual mix of technical levels, data releases, central bank expectations, and headline risk, rather than treated as a standalone signal.
This article was written by Eamonn Sheridan at investinglive.com.