As shown in the diagram, EURSEK ATM calls are trading a tad below 12% (11.97% to be precise), even though IVs likely to fade a bit it is stagnant above 9%.

If IV is on the higher side, it implies that the market ponders over the price has the potential for large movement in either direction.

Whereas lower IV would divulge the market reckons the price would not move much and so that it is beneficial for option writers.

Technically, since the current rallies of EURSEK can see stiff resistance at 9.4533 levels we could foresee in short term it can very well be interpreted as short-term bulls may struggle but in medium term the resultant effects of the outcomes of the EU referendum props up the EURSEK prospects to a higher level and these bullish effects have been evident on monthly charts.

Moreover, the Swedish inflation hampers the rate cut by Riksbank in its monetary policy which in turn could prop up the pair to the higher levels.

So, trading option spreads in different strikes allows the traders in many tricky market scenarios and likely to fetch positive cashflows.

Hence, we recommend initiating longs in 1M ATM +0.51 delta call of EURSEK, 1 lot of (1%) OTM +0.36 delta call and simultaneously short 1 lot of deep OTM call (2%) with comparatively shorter expiry (preferably 1w) in the ratio of 2:1.