Why the delayed increase in volume? | Forex Factory

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Why the delayed increase in volume?

  • #1
  • First Post: Jul 18, 2012 10:48pm Jul 18, 2012 10:48pm
The chart below shows that there was a huge spike in the volume of fx trade at 10:00 AM for USD/CAD. I know that at 9:00 AM yesterday, there was an interest rate decision from Bank of Canada. I’m wondering if anyone has any take on the microstructure for why such a surge in the volume one hour after the news?
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  • #2
  • Jul 18, 2012 11:33pm Jul 18, 2012 11:33pm
Quoting Svm
The chart below shows that there was a huge spike in the volume of fx trade at 10:00 AM for USD/CAD. I know that at 9:00 AM yesterday, there was an interest rate decision from Bank of Canada. I’m wondering if anyone has any take on the microstructure for why such a surge in the volume one hour after the news?
Because it's the time where the most activities are. You can't expect the most activities right on the news release. It could happen anytime when those big money start to get into the market.
  • #3
  • Jul 19, 2012 12:35am Jul 19, 2012 12:35am
1000EST/1400GMT Options expiry.
  • #4
  • Jul 19, 2012 2:36pm Jul 19, 2012 2:36pm
Quoting EmeraldEyes
1000EST/1400GMT Options expiry.

Was that when the options CME options on futures expire on the third wednesday of every month. Can I expect monthly volume to be like that at this point?
  • #5
  • Jul 20, 2012 2:21am Jul 20, 2012 2:21am
Its the standard time options expire daily. Options can expire at different times though, its an OTC market afterall. As of market volume and movement, it depends on the size or amount of traders hedging the option prior to expiry. There was a large amount on both sides w/ options on Usd/Cad @ 1.015
  • #6
  • Jul 21, 2012 12:55pm Jul 21, 2012 12:55pm
To see how options affect the spot market, plot the price of Eur/Usd everyday last week @ 10EST(1400GMT). Shows how traders are hedging for option at 1.2250 leading up to the expiry.
  • #7
  • Jul 22, 2012 1:42am Jul 22, 2012 1:42am
Quoting EmeraldEyes
Options can expire at different times though, its an OTC market afterall. As of market volume and movement, it depends on the size or amount of traders hedging the option prior to expiry. There was a large amount on both sides w/ options on Usd/Cad @ 1.015
That's my whole question. How can you tell it was options? Where are you getting the option volume/data. Especially, if the FX Optiuons market is all OTC?
  • #8
  • Jul 22, 2012 2:48am Jul 22, 2012 2:48am
Quoting Svm
That's my whole question. How can you tell it was options? Where are you getting the option volume/data. Especially, if the FX Optiuons market is all OTC?

Charts. The news.
  • #9
  • Edited Jul 23, 2012 1:19am Jul 22, 2012 9:23pm | Edited Jul 23, 2012 1:19am
Quoting Svm
That's my whole question. How can you tell it was options? Where are you getting the option volume/data. Especially, if the FX Options market is all OTC?
I agree with Anewr. Keeping up on intraday news, market happenings, order rumors, ect. It is OTC and trading desks talk to each other and spread info of where large options are heading in to the 1400GMT expire. 90% of the time options reported are a large round number.

News example http://www.fxstreet.com/news/forex-n...f-39a3a9659d69
  • #10
  • Last Post: Jul 29, 2012 10:28pm Jul 29, 2012 10:28pm
Thank a lot guys.

Good insight.
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