Euro Futures Options Idea (18 Jan 2024)

[ Euro Futures Options Idea ]

‣ As traders pare back their US interest rate cut expectations, the Euro/USD futures (/6E) sunk to the bottom of its three-month-old price channel. The scenario described in last week's post has now unfolded completely: https://lnkd.in/gFmgQUTD

‣ The /6E could hold support around 1.090 in the near-term, possibly bouncing back up to 1.100. However, /6E will likely remain rangebound between 1.070 and 1.115 over the coming weeks. ‣ The /6E's steep fall has resulted in elevated volatility in the past two trading sessions, offering an opportunity to implement a short strangle strategy on the options of the Euro futures March 2024 contract.

Short strangle on /6E[ H4 ]  

Sell 1.07 strike Put, 8 Mar 2024 expiry  

Sell 1.115 strike Call, 8 Mar 2024 expiry  

Premium collected: ~$775 (as at 18 Jan 2024) 

Target take profit at 50% of premium collected 

Buying Power requirement: Approximately $1,250 

The Roaring Trade and Desmond Chew have joined forces to complement directional trade ideas with option strategies, across stocks, ETFs, crypto, commodities, bonds and FX. Contact us at options@roaring.trade

Disclaimer: All views and trade ideas expressed in this article are solely for educational and informational purposes. Nothing in this article is to be construed as investment or trading advice.