FX Options Analysis The Edge Pros Use

FX Options Weekly Commentary Sep 27th 13

Trading week 39 that ended on Sep 27th 2013 brought the most action in forex options markets with USDJPY & AUDUSD and from non USD fx pairs with AUDJPY.

We're seeing decrease in implied volatility which is keeping fx pairs in spot markets mostly in range trading conditions.

Let's do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.



I did write on Monday, Sep 23rd 2013 during London open that options traders were
buying 1 week and 1 month put options of AUDUSD which meant that forex options traders were taking positions for a bearish AUD (or AUDUSD price to go DOWN).

Spot price at that time for AUDUSD was 0.9420 and by end of the week went DOWN to 0.9300 or 120 pips lower.

If somebody would use this analysis for extra trading edge to trade fx spot markets then profit in entering a SELL AUDUSD trade would produce 120 pips profit or at 100x leverage a yield of 130%.



In daily fx options analysis posted on Tuesday, Sep 24th 2013 during London open, I wrote that options traders were
buying 1 week & 3 months put options of USDJPY which meant that forex options traders were taking positions for a bullish JPY (or USDJPY price to go DOWN).

Spot price at that time for USDJPY was 99.10 and by end of the week went DOWN to 98.10 or 100 pips lower.

If somebody would use this analysis for extra trading edge then profit in entering a SELL USDJPY trade would produce 100 pips profit or at 100x leverage a yield of 100%.

I hope more & more public traders starts seeing how powerful my fx options analysis are in providing THE EDGE PROS USE to fx spot market traders when deciding what fx pair to trade & when.



Once again - my analysis are provided for educational purposes and NOT meant to be taken as forex trade signals!

Patience is key for being a long-term profitable currency trader!



Best regards,
Alex "TAKE Massive ACTION = GET Massive RESULTS".
Creator Of FXoptionsANALYSIS.com

DISCLAIMER: I don’t provide direct trading signals! All the material at FXoptionsANALYSIS.com is given as educational information. What you do with the info you find here is entirely up to you and you are 100% accountable for your own actions.

Forex options markets commentary at London open.

Today's Asian markets brought good currency options trading action mainly in USDJPY and EURJPY forex options markets.

Let's start analyzing forex options intraday changes in fx options implied volatility, forex options volume and changes in forex call and put options prices...


Basic Area

At The Money (ATM) forex options implied volatility changes of USD major forex pairs:

- 1 week fx options volatility increased in EURUSD, USDJPY, GBPUSD and USDCHF options,

- 1 month fx options volatility increased in all USD pairs, XAUUSD (gold) & XAGUSD (silver),

- 3 months fx options volatility increased in EURUSD, USDJPY, AUDUSD & XAUUSD.



Pro Area
Fx options traders were buying forex Out of The Money (OTM) options in the following fx options markets:

- USDJPY puts with 1 week up to 1 year month options expiry date.



VIP Area

Commentary of forex price action in fx options markets:

Finally after boring low volatility Sep we gonna have a volatile Oct since 1 month options implied volatility is increasing in all fx options markets.

This is also caused by notorious first week in the month with many central banks due to release their interest rate decisions plus NFP on Friday.



Potential fx spot markets trading setups:

After similar USDJPY puts buying that I reported already last week on Tuesday (spot price then 99.10) & Friday (spot price then 98.40), we have 3rd time in 5 trading days that fx options traders are buying USDJPY put options - positioning for price to go DOWN in spot market.

But due to a gap forming on today's open - current situation provides no good edge to enter new trade with current market's spot price.


Read more: FXoptionsANALYSIS.com

Forex options markets commentary on Oct 1st 2013 at London open.

Today’s Asian markets brought currency options trading action mainly in USDJPY forex options market.


At The Money (ATM) forex options implied volatility changes of USD major forex pairs:

- 1 week fx options volatility increased in USDCAD, XAUUSD (gold) & XAGUSD (silver).


Read more: FXoptionsANALYSIS.com

Forex options markets commentary on Oct 2nd 2013 at London open.

Today’s Asian markets brought the following currency options trading action in fx options markets.

At The Money (ATM) forex options implied volatility changes of USD major forex pairs:

- 1 week fx options volatility increased in EURUSD, XAUUSD (gold) & XAGUSD (silver),


Read more: FXoptionsANALYSIS.com

Today's Asian markets brought the following currency options trading action mainly in EURUSD, USDJPY, EURJPY, AUDUSD & XAUUSD (spot gold) forex options markets.

At The Money (ATM) forex options implied volatility changes of USD major forex pairs:

- 1 week fx options volatility increased in AUDUSD and USDCAD options markets,

Read more: FXoptionsANALYSIS.com

FX Options Weekly Commentary Oct 4th 13

Trading week 40 that ended on Oct 4th 2013 brought the most action in forex options markets with USDJPY, EURUSD, GBPUSD, USDCHF & AUDUSD.

We're still seeing decrease in implied volatility which is keeping fx pairs in spot markets in range trading conditions.

Let's do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.


There was good buying of USDJPY almost every day but usually the price in spot market also moved in direction of what fx options traders were buying so no edge to enter any USDJPY trade this finishing week.

Few trades with very light edge did work out like on Wednesday, Oct 2nd 2013 BUY EURUSD at 1.3520 and SELL USDCHF at 0.9060 but yield with both trades were less than 100% as I expected due to no good edge to enter in current confusing markets conditions.

The only relatively OK trade setup was BUY NZDUSD at 0.8300 on Friday, Oct 4th 2013 that I talked about on my blog.



All in all this week was not good for trading currency markets due to fx options implied volatility decreasing even more - which was shown by fx options traders not buying strongly anything.



Once again - my analysis are provided for educational purposes and NOT meant to be taken as forex trade signals!

Patience is key for being a long-term profitable currency trader!



Best regards,
Alex "TAKE Massive ACTION = GET Massive RESULTS".

Fx options implied volatility keeps going down – meaning markets are stuck in range trading and not expecting any news to make them move.

During London session today only light buying of EURUSD call options with 1 week & 1 month expiry so looks like 1.3500 level could act as support and provide an opportunity to enter BUY EURUSD trade.

Still with such low volatility price may be stuck in 1.35-1.36 range for few days unless NFP tomorrow shocks big time.

All in all not much edge entering any trade with current low volatility in fx markets.

FX Options Weekly Commentary Oct 11th 13

Trading week 41 that ended on Oct 11th 2013 brought the most action in forex options markets with AUDUSD, NZDUSD, XAUUSD (gold), USDJPY & GBPUSD.

FX options implied volatility went up only in XAUUSD (gold) and fx options traders got it right again by buying gold put options already on Monday, Oct 7th 2013 since price of spot gold dropped this week by 2.8%.

But in general, we're still seeing decrease in fx options implied volatility of most USD fx pairs which is keeping fx pairs in spot markets in range trading conditions.

Let's do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.

On Monday, Oct 7th 2013 fx options traders made light buying of AUDUSD & NZDUSD call options and USDCAD & XAUUSD (gold) put options.

During the week spot price of AUDUSD went UP by 85 pips and NZDUSD went UP by around 50 pips.


On Tuesday, Oct 8th 2013 we had USDJPY puts buying but since volatility increased this was not good situation to enter a SELL USDJPY around 97.20.

On Wednesday, Oct 9th 2013 we had USDJPY calls buying and with increased volatility this presented a relatively OK situation to enter a BUY USDJPY trade around 97.40. Still buying was not strong enough to justify this as a good edge trade.

Thursday some more light buying of USDJPY and AUDUSD and on Friday not much changes.

The only nice moving market this week was a 2.8% drop of spot gold price that fx options traders predicted already on Monday, Oct 7th 2013 by buying put options.

All in all a very quiet weekend with low implied volatility and only light buying of fx options with 1 week and 1 month expiry.

Next week we can expect rise in volatility and more forex price action mainly caused by CME raising margins after Friday's markets close, Oct 11th 2013 on US indices - sp500, Dow Jones and Nasdaq.

Looks like when I reported on Tuesday, Oct 8th 2013 on my Facebook page that VIX volatility jumped over 20% - which is highest this sp500 volatility index has been since Jan 2013, somebody maybe "knew" that margins hike was coming.


Once again - my analysis are provided for educational purposes and NOT meant to be taken as forex trade signals!

Patience is key for being a long-term profitable currency trader!


Best regards,
Alex "TAKE Massive ACTION = GET Massive RESULTS".
Creator Of FXoptionsANALYSIS.com

FX Options Weekly Commentary Oct 18th 13

Trading week 42 that ended on Oct 18th 2013 brought the most action in forex options markets with AUDUSD, NZDUSD, USDJPY, EURUSD & GBPUSD.

FX options implied volatility decreased in all USD fx pairs, XAUUSD (gold) & XAGUSD (silver) with main driver for this being increased US debt ceiling. This caused USD gaining bearish momentum that favored risk on investments - mainly higher prices of stock markets and AUD & NZD.

Let's do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.


Most light buying of only 1 week options usually gives a lot of light edge/low probability trading setups that may or may not work in producing profits.

That's why I'll just focus in this commentary on analyzing good buying of options with at least 1 month options expiry.

On Tuesday, Oct 15th 2013 fx options traders made good buying of NZDUSD call options with 1 month expiry.

Spot price of NZDUSD at that time was 0.8385. During the week spot price of NZDUSD went UP by 140 pips.


On Thursday, Oct 17th 2013 we had good buying of AUDUSD & NZDUSD call options with expiry date from 1 week up to 1 year and good buying of USDJPY calls with 1 month expiry.

This alone would tell us that pros are positioning for a bullish AUD & NZD but a bearish JPY.

All this 3 fx pairs had options volatility decreased which would tell us that all 3 currencies are not expected to go bearish.

This would mean that USDJPY calls buying (JPY going bearish) with lowered volatility (most likely JPY not going bearish) would be a mixed signal and a warning not to trade USDJPY and just stick with potential trade to BUY AUDUSD and BUY NZDUSD.

We already had a BUY NZDUSD trade setup 2 days ago so now we had 2nd chance to enter BUY NZDUSD plus potential entry to BUY AUDUSD.

Spot price of AUDUSD at that time was 0.9542. By end of the week price of AUDUSD went UP by 130 pips.



Summary: if we'd just focus when fx options traders are doing good buying of fx options with at least 1 month expiry then this finishing week we'd have 2 good potential trade setups BUY NZDUSD and BUY AUDUSD that would make combined around 250 pips profit.

Another week finished where fx options analysis proved to be THE EDGE PROS USE and a valuable addition to help you maximize your trading potentials.



Once again - my analysis are provided for educational purposes and NOT meant to be taken as forex trade signals!

Patience is key for being a long-term profitable currency trader!

Read more: FXoptionsANALYSIS.com

Forex options markets commentary on Oct 25th 2013 at London open.

Today’s Asian markets brought the following currency options trading action mainly in USDJPY, AUDUSD & USDCAD forex options markets.

Let’s start analyzing forex options intraday changes in fx options implied volatility, forex options volume and changes in forex call and put options prices…



At The Money (ATM) forex options implied volatility changes of USD major forex pairs:

- 1 week fx options volatility increased in GBPUSD, AUDUSD, USDCAD, USDCHF & XAUUSD,

- 1 month fx options volatility increased in AUDUSD & USDCAD fx options markets,

- 3 months fx options volatility increased in AUDUSD & USDCAD fx options markets.

Read more: FXoptionsANALYSIS.com

FX Options Weekly Commentary Oct 25th 13

Trading week 43 that ended on Oct 25th 2013 brought the most action in forex options markets with XAUUSD (gold) and USDJPY.

FX options implied volatility increased in AUDUSD and USDCAD and both AUD & CAD went bearish this week.

Let's do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.


Once again it was proven that only 1 week buying or selling options produce many fake or light edge fx spot markets trade setups that are NOT favorable to use in entering new trades in fx spot markets.

In this case USDJPY action was once again most frequent that would cause lots of money lost to a scalper focusing on every light buying or selling of fx options.

That's why I'll just focus in this commentary on analyzing good buying or selling of options with at least 1 month options expiry.


On Monday, Oct 21st 2013 fx options traders made good buying of XAUUSD (gold) call options with 1 week up to 6 months expiry.

Good edge for BUY Gold trade in area of $1,310 to $1,330 was also light buying of USDCHF puts (positioning for bullish CHF) since CHF is backed by having 10% of foreign reserves in gold – so direction of gold also lightly affects direction of CHF.

Spot price of XAUUSD at that time was around $1,320. Spot gold price closed the week as best performing currency going up 2.9% at $1,352 - UP by around $30.

And speaking of correlated markets - CHF finished the week as 2nd best performing currency going up 1.1% or UP by around 105 pips.


On Tuesday, Oct 22nd 2013 fx options traders made good selling of XAUUSD (gold) put options with 1 month up to 1 year expiry.

This was 2nd strongest setup for bullish gold (strongest being buying calls reported 1 day earlier).

Before Non Farm Payroll release that day, price of spot gold did go down to $1,310 just like I wrote day earlier to be good entry to BUY Gold and then price never looked back and kept pushing above $1,330 until the end of this week.

This 2 days in a row we had priceless info what fx options traders were doing - mainly pros and big banks investing millions and billions. This gave us once again THE EDGE PROS USE in maximizing our trading potentials.

From Wednesday to Friday we had a lot of light buying and selling of many fx pairs options and actually in USDJPY we had good selling of USDJPY options but only with 1 week options that proved once again as not good to trade.



Summary: if we'd just focus when fx options traders are doing good buying or selling of fx options with at least 1 month & 3 months expiry then this finishing week we'd have 1 good potential trade setup BUY XAUUSD (gold) to enter 2x - on Monday around $1,320 or Tuesday around $1,310 to make around $30-$40 profit.

Another week finished where fx options analysis proved to be THE EDGE PROS USE and a valuable addition to help you maximize your trading potentials.

Read more: FXoptionsANALYSIS.com

Forex options markets commentary on Oct 29th 2013 at London open.

Today’s Asian markets brought the following currency options trading action mainly in USDJPY & AUDUSD forex options markets.

Let’s start analyzing forex options intraday changes in fx options implied volatility, forex options volume and changes in forex call and put options prices…


At The Money (ATM) forex options implied volatility changes of USD major forex pairs:

- 1 week fx options volatility increased in EURUSD & AUDUSD fx options markets,

- 1 month fx options volatility increased in USDJPY & AUDUSD fx options markets,

- 3 months fx options volatility increased in USDJPY & AUDUSD fx options markets.


Read more: FXoptionsANALYSIS.com

Just as I wrote in yesterday's post on my Facebook page that I don't expect FED to change interest rate based on no action with 1 & 3 months options volatility, this is just what happened.

Similar 2 days ago I wrote to my VIP members that USDJPY could start going UP with prices at that time around 97.50 and by now price is UP by 80 pips.

Such info would make a trader trading 1 lot around $800 profit.

Week after week fx options analysis are giving us THE EDGE PROS USE.


Do you want to be part of this success?

If YES then invest in becoming a lifetime VIP Member.

Sign Up at http://FXoptionsANALYSIS.com/signup

FX Options Weekly Commentary Nov 1st 13

Trading week that ended on Nov 1st 2013 brought the most action in forex options markets in all top 6 most traded fx pairs also in spot markets – EURUSD, USDJPY, GBPUSD, AUDUSD, USDCHF & USDCAD.

FX options implied volatility increased in all fx pairs which is not surprising with USD gaining bullish momentum.

Let’s do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.



On Tuesday, Oct 29th 2013 I wrote inside VIP Members Area

Nikkei 225 did finish week higher, JPY did go bearish finishing the week losing 1.3% and USDJPY by the end of the week closed at 98.70 – UP by around 120 pips.



Besides this correct analysis most other action by fx options traders were hard to crack since they were sending lots of mixed signals by either simultaneously buying calls and puts or selling calls and puts.

That’s why to be a successful fx options markets analyst – fx spot markets trader you need to look at the bigger picture when deciding what and when to enter new trades.


Summary: every new hour invested in increasing analytical skills gives you a better “feeling” what to trade and this week this lead us into BUY USDJPY around 97.50. By end of this week this trade produced around 120 pips profit.

This week was now 5th week in a row of making profits inside VIP Members Area with the help of daily fx options analysis – proving us once again to be THE EDGE PROS USE and a valuable addition to help you maximize your trading potentials.


Read more: FXoptionsANALYSIS.com

Forex options markets commentary on Nov 5th 2013 at London open.

Today’s Asian markets brought the following currency options trading action mainly in AUDUSD forex options market.

Let’s start analyzing forex options intraday changes in fx options implied volatility, forex options volume and changes in forex call and put options prices…



At The Money (ATM) forex options implied volatility changes of USD major forex pairs:

- 1 week fx options volatility increased in GBPUSD fx options markets,
- 1 month fx options volatility decreased in all fx options markets,
- 3 months fx options volatility decreased in all fx options markets.

Read more: FXoptionsANALYSIS.com

Trading week that ended on Nov 8th 2013 brought a lot of light action in all forex options markets.

FX options 1 & 3 months implied volatility increased mainly in USDJPY and USDCAD fx options.

Let’s do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.

Once again it was proven that only 1 week buying or selling options produce many fake or light edge fx spot markets trade setups that are NOT favorable to use in entering new trades in fx spot markets.

That’s why I’ll just focus in this commentary on analyzing good buying or selling of options with at least 1 month options expiry.

Unfortunately entire week we didn’t have a single day where fx options traders would be doing a good buying or selling of any fx options which came as no surprise with so many big news on the line that shook financial markets.

Seeing day after day only light buying or selling with volatility mainly unchanged or even decreasing told us that fx options traders don’t know what kind of news will be announced and prefer to stay on the sidelines.



They were right once again not to enter any new trades with a shocking news from ECB to cut rate by 25bp when 67 out of 70 analyst didn’t expect this to happen.

Just a day later we had NFP release and again most expected a bearish figure to be released and to surprise of most fx traders it was very bullish which would make 2 lost trades in a row and probably many spot traders got burned this week by not staying on the sidelines.



Summary: it’s not all about how much money to make but also when NOT to enter a trade to SAVE money in trading forex markets. This week was perfect example to stay on the sidelines and wait for better market conditions to enter new trade. Over trading kills your edge!

Read more: FXoptionsANALYSIS.com

Trading week that ended on Nov 15th 2013 brought a lot of good action in EURUSD, USDJPY, GBPUSD, AUDUSD & XAUUSD (gold) forex options markets.

FX options implied volatility increased only in USDJPY and to no surprise JPY finished the week as most bearish currency losing 1.1% in value.

Let’s do a recap of most significant fx options analysis through out the finishing week to see how profitable it was to analyze what forex options traders were buying.

There were lots of trade setups with light and good buying or selling of fx options – that’s why I’ll just focus in this commentary on analyzing good buying or selling of options with at least 1 month options expiry.

The key event was Yellen speech confirming no change in FED policy to taper so stock markets responded by going higher and main play was SELL JPY to BUY Nikkei 225 that gained 7.4% this week.



On Monday, Nov 11th 2013 fx options traders were doing good selling of USDJPY puts (positioning for price to go UP) with spot price at that time being around 99.00. USDJPY by the end of this week went up to 100.43 or UP by around 140 pips.

Same day they were also doing good buying of AUDUSD puts (positioning for price to go DOWN) with spot price at that time being around 0.9360. AUDUSD in next 24h went down to 0.9270 or DOWN by around 90 pips.

On Wednesday, Nov 13th 2013 fx options traders were doing good buying of XAUUSD (gold) puts (positioning for price to go DOWN) with spot price at that time being around $1,275.
Gold in next 24h went down to $1,265 or DOWN by around $10.

Same day they were also doing good selling of USDJPY puts (positioning for price to go UP) with spot price at that time being around 99.50. This was 2nd chance to enter BUY USDJPY this week and another chance to make around 100% yield if using 100x leverage.

On Thursday, Nov 14th 2013 fx options traders were doing good selling of AUDUSD puts (positioning for price to go UP) with spot price at that time being around 0.9340.
AUDUSD by the end of this week went up to 0.9386 or UP by around 40 pips.



Summary: another week finished where we saw rough power of FX Options Analysis in giving us The Edge Pros Use to gain the edge in trading forex spot markets.

Patience is key for being a long-term profitable currency trader!

Read more: FXoptionsANALYSIS.com

Hi Edge,
I've been trading Forex since 2007 and Equity Options for a little more than a year. I'm trying to learn about the Forex Options market but there's little information to be found. I hope you don't mind me asking some questions.

Can you tell me how it compares to the Equity market, with liquidity and spreads? SPY is typically 1 cent wide and GLD is about 3 cents, but from what I've been able to find online Forex Options can be 10+ pips.

Also, if I wanted to do a front month vertical credit, maybe 5 strikes wide, with the short leg maybe 2 strikes OTM, am I looking at a $0.50 premium or $1.50?

And just one more question, how do the Options for cross rates like EURAUD and EURGBP compare to EURUSD? Are spreads and liquidity typically about the same?

Thanks in advance,
Rob M.

FX options markets are somehow exotic for most average traders that's why volume and therefore liquidity is lower hence spread is bigger compared to stock markets or stock indices.

But cause fx options are so complicated mostly smartest traders trade with them so analyzing where they put their new money is proving to be extremely profitable for a spot trader that enter new trades based on fx options analysis.

Premium differs to common laws of supply and demand and also are options traders buying or selling options so it differs for each option market.

All USD fx options pairs will have higher liquidity and therefor lower spreads than currency crosses cause EURAUD trade is basically 2 trades in one - EURUSD and AUDUSD.

If this stuff would be easy to analyze then everybody would do it.

Just cause my daily fx options sent daily to emails of my VIP members looks so easy to understand - it doesn't mean they are not very complex.

Edge, thanks for the response. I'm just trying to figure out if it's worth getting into, before I open and fund a new account with a different broker. With Options on major ETFs, spread and liquidity isn't even a consideration but I've looked at the currency ETFs, and aside from FXE (Euro) they don't have good Options - plus since I'm already trading Spot FX I'd like to be able to sell naked P and C to enter positions.

Thanks again for the information.