How to read options levels and amounts | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Set SL and TP automatically in dollar amounts? 26 replies

USDHKD Options worth $2 Billion - levels 7.61 and 7.64 0 replies

Max. Leverage Amounts and Withdrawal Limits? 3 replies

Brokers for trading commodities in micro amounts 7 replies

Need help coding EA to read ATR levels 0 replies

Attachments: How to read options levels and amounts
Exit Attachments

How to read options levels and amounts

  • #1
  • First Post: Apr 16, 2015 12:51am Apr 16, 2015 12:51am
i read often that options are expiring with level tipped at a certain amount today.

Eg:

EUR/USD 1.0650 (750 mln)

how is this supposed to be read? Is it a put or a call option or combined?
  • #2
  • Apr 16, 2015 1:22pm Apr 16, 2015 1:22pm
Shibboleth,

The 1.0650 would be a put option, as it's below current market . You're looking at the option expiries table from ForexLive, right? They quote put and call options
(plain vanilla options) , not exotic options ( like no-touch, double no-touch, etc). I commend you for looking at fx options. Good job! Most traders here probably don't.
Option levels are often targets for big banks and hedge funds. Exotic options aren't published , but you can usually bet they're at big figures ( 1.06, 1.07, 1.08,etc).
  • #3
  • Apr 16, 2015 7:34pm Apr 16, 2015 7:34pm
Quoting gravitist
I commend you for looking at fx options. Good job! Most traders here probably don't. Option levels are often targets for big banks and hedge funds. Exotic options aren't published , but you can usually bet they're at big figures ( 1.06, 1.07, 1.08,etc).
If you can actually SAY the parts I bolded above, then you should've realized by now that in fact it doesn't even matter if one "knows" if a level being targeted is option-related. You can SEE very clearly that it's just a support/resistance level/zone just like any other S/R line.

As an aside, you should also know that plain vanilla option strikes are NEVER targeted because the option buyers/sellers would've already continually hedged their delta risks throughout the life of the options they transacted.

Therefore upon expiry, usually NOTHING HAPPENS in spot that's even remotely related to plain vanillas.

Only exotic options are frequently targeted, and even then (as I've said), it still doesn't matter because the levels being targeted/defended frequently have past price action history behind them. and you can analyze these in the same way you would analyze any other S/R line.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #4
  • Apr 16, 2015 7:42pm Apr 16, 2015 7:42pm
I would agree that knowing option levels alone isn't enough. But it is part of the picture and something to keep in mind.
  • #5
  • Apr 16, 2015 8:17pm Apr 16, 2015 8:17pm
Quoting gravitist
I would agree that knowing option levels alone isn't enough. But it is part of the picture and something to keep in mind.
"Knowing" that levels are option-related is, simply put, not necessary.

Having traded spot for more than 15 years and FX options for more than 6 years for various Banks, I'd like to think this is something I'm intimately qualified to say.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #6
  • Apr 16, 2015 8:30pm Apr 16, 2015 8:30pm
Quoting skenobi
{quote} "Knowing" that levels are option-related is, simply put, not necessary. Having traded spot for more than 15 years and FX options for more than 6 years for various Banks, I'd like to think this is something I'm intimately qualified to say.

"Knowing", where price is in relation to a Moving Average or Daily open...is not necessary.

"Knowing", whether your stochs is oversold or your trigger line has exited the forest on your MACD...is not necessary.

Or...as your example...Knowing When the RSI hits XX......

Finding a methodology that may be consistent through the tools you feel are relevant...

IS!

I know we've been down this road before, and for all others reading, Skenobi is correct. If you can read a chart, having these levels really aren't necessary...

But...if you use them, or if you have started to look at them to assist you in your trading day...pat yourself on the back!!

Any information you can add to better your success, is a very good thing!

Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #7
  • Apr 16, 2015 8:36pm Apr 16, 2015 8:36pm
Err... Thanks for the support!

But I have to clarify...

Quoting Magix
If you can read a chart, having these levels really aren't necessary... But...if you use them, or if you have started to look at them to assist you in your trading day...pat yourself on the back!! Any information you can add to better your success, is a very good thing!
HAVING the levels can be useful.

KNOWING where the levels come from (e.g. categorizing this and that level as option-related) is not , especially when the support and resistance is as clear as the summer sun.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #8
  • Apr 16, 2015 8:56pm Apr 16, 2015 8:56pm
Quoting skenobi
Err... Thanks for the support! But I have to clarify... {quote} HAVING the levels can be useful. KNOWING where the levels come from (e.g. categorizing this and that level as option-related) is not , especially when the support and resistance is as clear as the summer sun.

I are but a simple peasant, wandering my uncharted price movements.

An eager student waiting for experienced guidance.

When you are ready to start up these classes, you need but tap on my door, I will be ready!

I have the space and chatroom to lend.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #9
  • Apr 16, 2015 9:02pm Apr 16, 2015 9:02pm
PS...

For most that know me and my sarcastic bullshit...

In all seriousness...If this dude ever sets up shop...sell your kids, mortgage your house and divorce your wife...if and as needed.

Do what you have to do, to be there!
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #10
  • Apr 16, 2015 9:19pm Apr 16, 2015 9:19pm
Quoting Magix
PS... For most that know me and my sarcastic bullshit... In all seriousness...If this dude ever sets up shop...sell your kids, mortgage your house and divorce your wife...if and as needed. Do what you have to do, to be there!

LOL... Nothing would get me tagged with the Commercial paint faster than that!

Thanks for the endorsement but FF is a place where I like to hang out and wouldn't want anything to jeopardize that.

I only have 3 (previously only 2) pet peeves:
1. misconceptions among retail traders about how institutionals operate.
2. misconceptions among retail traders about the usefulness of knowing FX option strike levels.
3. misconceptions among retail traders in my own country Malaysia about the legality of what they're using.

Lemme have space to clear these up and I'm just happy as a clam..
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #11
  • Apr 16, 2015 9:26pm Apr 16, 2015 9:26pm
Quoting skenobi
{quote} LOL... Nothing would get me tagged with the Commercial paint faster than that!
Bah...

Fuckem!

Do what I do...all efforts for global charities!

Just because you have the ability to reach out, don't mean that it has to be commercial intent.

(Plus, nobody really likes their wife n kids anyways)
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #12
  • Apr 16, 2015 10:11pm Apr 16, 2015 10:11pm
color me subscribed....
"Holy Grail" exists - accepting where is the first step.
  • #13
  • Apr 20, 2015 3:01am Apr 20, 2015 3:01am
Quoting skenobi
{quote} If you can actually SAY the parts I bolded above, then you should've realized by now that in fact it doesn't even matter if one "knows" if a level being targeted is option-related. You can SEE very clearly that it's just a support/resistance level/zone just like any other S/R line. As an aside, you should also know that plain vanilla option strikes are NEVER targeted because the option buyers/sellers would've already continually hedged their delta risks throughout the life of the options they transacted. Therefore upon expiry, usually NOTHING...
I dont know at all what that means. I hope you can tell me i just dont need to keep track of options.
My signature is: "Classified".
  • #14
  • Apr 20, 2015 4:13am Apr 20, 2015 4:13am
Quoting yaed
{quote} I dont know at all what that means. I hope you can tell me i just dont need to keep track of options.
Bottomline: You don't need to keep track of options.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #15
  • Apr 20, 2015 5:56am Apr 20, 2015 5:56am
The option's gamma is higher when the expiry approaches and the price of the underlying is close to the strike. When the market is near the strike when the time to expiration is close, the delta hedging could generate some spot flows. Other flows could be generated for netting of the option position.Unfortunately there is know way ot knw in advance the delta hedging strategy of the option's buyer or seller.

As skenobi says, the fact that there is support or resistance is sufficient to take a trade or stay on the sidelines.
Attached Image
  • #16
  • Last Post: Jun 10, 2015 7:35pm Jun 10, 2015 7:35pm
Quoting srmfx
The option's gamma is higher when the expiry approaches and the price of the underlying is close to the strike. When the market is near the strike when the time to expiration is close, the delta hedging could generate some spot flows. Other flows could be generated for netting of the option position.Unfortunately there is know way ot knw in advance the delta hedging strategy of the option's buyer or seller. As skenobi says, the fact that there is support or resistance is sufficient to take a trade or stay on the sidelines. {image}
I'm not trying to convince anyone. I'm not in the "convincing" business.
0 traders viewing now