The implied volatilities of 1m EURAUD ATM contracts are trading shy above 9%, while the spot price in technical trend approaching near crucial juncture at the resistance of falling wedge, it seems to be equal opportunity for both bulls and bears. It has become a quite tough call for anyone to predict the short term trend but slightly favouring upside traction in near terms.
You could figure out that in our recent technical write up, please follow the below weblink for more reading on our technical post:
While negatively skewed 1m IVs are signaling the luring opportunities in out of the money put writings as the IVs are also on a lower side which is conducive for option writers.
Hedging Framework:
3-Way Options straddle versus OTM put
Spread ratio: (Long 1: Long 1: Short 1)
How to execute:
Go long in EURAUD 1M at the money +0.51 delta call, go long 1M at the money -0.49 delta put and simultaneously, short 2w (1%) out of the money put with positive theta.


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