Please be informed that the implied volatilities of EURCHF ATM contracts of all expiries have been the least among G10 currency segment.

While, the 25-delta risk of reversal of EURCHF has also not been indicating any dramatic shoot up nor any slumps, but seems to be one of the pairs to be hedged for downside risks as it indicates puts have been relatively costlier.

Option-trade recommendations:

EURCHF’s range bound pattern is still persisting but some bearish candles are indicating slight weakness on both weekly and monthly charts, (Ranging between upper strikes 1.1110 and lower strikes at around 1.0725 levels.

We could still foresee range bounded trend to persist in near future but little weakness on weekly charts is puzzling this pair to drag southward targets but very much within above stated range.

As a result, we recommend below option strategies using right options, thereby, one can benefit from certain returns.

Naked Strangle Shorting:

Short 1W OTM put (1.5% strike difference referring lower cap)and short OTM call simultaneously of the same expiry (1% strike referring upper cap) (we reiterate, preferably short term for maturity is desired).

Alternatively, one can also prefer iron condor on the same lower IV circumstances. To execute the strategy, the options trader buys a lower strike OTM put, sells a middle strike ATM put, sells a middle strike at-the-money call and buys another higher strike OTM call. This results in a net credit to put on the trade. 

Overview: Slightly bearish in a short term but sideways in the medium term.

Time frame:  7 to 10 days

At current spot at 1.0840 with range bounded trend keeping in consideration, we would like to remain in a safe zone by achieving certain returns though shorting a strangle.