Despite a steep gap down trade on Euro we could not see any instruments under the sun but ATM puts & ATM calls options for rescuing hedgers dealing with Euro.
Sell, Sell, Sell..!!! Uttering the bearish jittery on the eve of debt dues on June 30th may cause trade trauma if one just U turn seen in the FX markets. So idea is to play it safe, this doesn't mean to go against the trend or buck the trend.
Prevailing trend in Euro will have downtrend for a day or two but sustaining this down trend may be uncertain.
Euro tumbled almost all major baskets of currencies as a result of Greece debt default that is most likely on this 30th.
We reckon dollar measuring euro at yesterday's low 1.0951 is definitely unfair pricing but further dips from current levels can't be surprised as Greece's huge debt drama has been bolstering from long past.
Hence, idea would be pretty simple terms, usage of At-The Money instruments of EUR/USD are suggested during current global macroeconomic circumstances for hedging purpose as the theta has not been favorable for In-The-Money and Out-of the-Money contracts. For a simple fact, we all know that theta signifying the sensitivity of an option's value to the passage of time; huge theta numbers may puzzle the traders with option premiums.
Although the similar theta values are popping up for At-The-Money instruments but still worth owning them having reasonable time frame.
