Aussie dollar after long lasting losing streak that has begun from July, it is now making an attempt of recovery a bit as both technical and fundamental indicators are signaling buying sentiments.
Hence, we recommend it is better to cover all your shorts and as shown in the diagram purchase 1 ATM call, 1 lot of (1%) OTM call and simultaneously short 1 lot of deep OTM call (2%) with shorter expiry in the ratio of 2:1.
The higher strike short calls because IV is inching higher at 11% and it finances the purchase of the greater number of long calls (ATM calls are overpriced, so we chose 1% OTM calls as well) and the position is entered for reduced cost.
Vega on Long ATM Call = 62.05
Vega on Long (0.5%) OTM Call = 57.96
The current IV of AUDNZD call is higher side at 11% which is good for writers, usually if the Vega of a long option position is positive and the implied volatility rises or dips, the above stated option prices are directly proportional to the implied volatility.
So in this case Vega both on long position is reasonably acceptable. It is desirable that at maturity the underlying exchange rate of AUDNZD to remain near short strikes in order to achieve highest returns.


Major Pair Currency Score: EURUSD & GBPUSD Bearish and Major Levels to Watch
FxWirePro: USD/JPY eases slightly , but outlook is bullish
FxWirePro: GBP/NZD uptrend loses momentum but bullish setup remains
ECB-BoE Policy Divergence Drags
EURGBP trades weak for the third consecutive week
FxWirePro: EUR/AUD gains slightly, but downward resumption looks likely
FxWirePro: AUD/USD edges higher as US CPI looms large
FxWirePro: GBP/USD retreats as traders await US and UK inflation data
FxWirePro: USD/CAD uptrend loses steam, remains on bullish path
AUDJPY Coils in Tight Range: Bulls Eye Dips as 110 Support Sets the Stage for Breakout
JPY Major Currency Score - EURJPY Bearish, All Other Major Neutral
NZDJPY at a Crossroads: Sideways Range Binds Price Action as 90 Resistance Looms
FxWirePro- Major Pair levels and bias summary
AUDJPY Surges Past 111: Bulls Take Control Amid Broad-Based Australian Dollar Strength
NZDJPY Technical Outlook: Bullish Momentum Builds as Price Tests Key Support Levels
FxWirePro: GBP/AUD consolidating around 1.8980, room for further gains
FxWirePro: USD/ZAR eases as weaker dollar and lower oil prices support rand




