Richard Pace is a journalist who writes for eFXdata, specializing in foreign exchange markets and currency trading. His articles provide analysis and insights into market trends, option flows, and key economic data that impact currency pairs such as GBP/USD and EUR/USD. Richard's work has also been featured in BioRxiv, showcasing his versatility and ability to cover a range of topics.
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Richard Pace's articles mainly focus on investment analysis, often citing data and press releases. He seems to be particularly interested in foreign exchange (forex) trading, options trading, market analysis, and economic data.
To effectively reach out to Richard with pitches or contributions, consider providing well-researched insights into the forex market trends, options strategies backed by solid data or unique perspectives on economic indicators affecting currency markets. Additionally, given his interest in sales & marketing themes within finance & economy topics, pitches related to strategic financial planning or innovative approaches in currency trading may also resonate with him.
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By: Richard Pace
1-month expiry AUD/USD implied volatility inside 9.0/10.0 since US election 1-month daily realised volatility at 7.85 makes implied appear expensive However, 1-month high frequency (hourly) volatility stays well above 9.0 Shows that frequent delta hedging can capture more FX realised volatility
Cash hedging of soon-to-expire FX options can draw/contain FX spot 0.6350 is a big AUD/USD expiry level this coming week Limited flows before Thur's Fed may help to limit overall range/volatility
But, despite a reduction in BoJ rate hike bets, worries clearly simmer Implied volatility gauges actual volatility risk - a key part of premium Post BoJ expiry implied volatility remains very high - 1-week above 12.0 Risk reversals gauge the spot direction most likely to increase volatility 1-week risk reversals increase to 1.95 JPY call over put from 1.25 last week
EUR/USD was little phased as overnight expiry option pricing
By: Richard Pace
While it's not an exact science, larger impending FX option strikes can often have an effect on the FX spot market as their expiries draw closer and that certainly appears to be the case in EUR/USD of late.
wasn't expecting such a hawkish Fed outcome Overnight expiry implied volatility premium was just 66 USD pips pre Fed EUR/USD slumpeed and implied volatility paid, despite impending X-mas lull Benchmark 1-month jumped 7.5 to 8.0 and is now 7.8, 3-month 7.8 to 8.2 1-year expiry implied vol new long term high 7.9 (was 6.5 pre US election)
There's a particular option trade that has rewarded EUR/USD traders since the U.S. election and it's known as long Vega.
Hawkish Fed hit EUR/USD 1.0485 to 1.0344 Wed, recovers 1.0420 so far Thur Profit taking aids recovery, but may struggle to regain recent 1.05 pivot Billions of euros of soon-to-expire option strikes might dictate trading They will attract big hedging flows around the strikes to add congestion
USD/JPY gains were bolstered by this week's hawkish U.S. Federal Reserve and dovish Bank of Japan policy announcements, before Friday's
Related hedging effects can help limit moves if US PCE fails to excite 10-bln euros 1.0325-50, 8bln euros 1.0390-1.0400,
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