We could foresee the bulls taking halt at this point, this has been confirmed when yesterday's highs pulled down while rising volumes, this would reveal losing short term buying interests. There was no clarity from leading oscillators even though stochastic reached overbought zones but RSI was slightly converging with prices rises.
We think shift in vega has not been justifiable with corresponding increase in exchange rate while volatility is perceived at 8.8% which is on higher side. Shift in Vega on Long (1%) 1W OTM call was from 30.88 close to zero when convert this into spread with 1% OTM.
So for now buy far month out of the money call and sell near month ITM call. The delta slows down its speed and becomes a number close to 0 for deep in-the-money options. As a result, the impact of time decay becomes lower as options get deeper ITM.
This strategy is typically employed when the options trader or hedger is bullish on the underlying pair over the longer term but is neutral to mildly bearish in the near term. It may even be possible at some point in time to own the long term call "for free".
