Silver Spikes to $62.89 on Fed Cut – But Weekly Bearish Divergence Flashes Caution: Don’t Chase, Wait for the Dip 
Wall Street Analysts Weigh in on Latest NFP Data 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
Stock Futures Dip as Investors Await Key Payrolls Data 
Bitcoin Reserves Hit 5-Year Low as $2.15B Exits Exchanges – Bulls Quietly Loading the Spring Below $100K 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Evercore Reaffirms Alphabet’s Search Dominance as AI Competition Intensifies 
Volatility shocks and the passage of time have opposite effects on the value of a vanilla option (see ATM strikes on USDJPY options). When it can benefit from more volatility (long vega and gamma on OTM put strikes), time has a negative impact every day (short theta).
Yen IVs: Live September meeting should keep 2M vol supported; while yen 1-3m risk-reversals still a better sale as Fed considers global slowdown risks and Brexit settlements which is why the US central bank keeps deferring rate hikes atleast until the end of 2016 or by Q1 of 2017.
Please be noted that the 1m IV skews are more biased towards OTM put strikes, significant changes can indicate a change in market expectations for the future direction in the underlying forex spot rate and these risk reversals evidences the difference in volatility, and therefore price, between puts and calls on the most liquid out-of-the-money (OTM) options quoted on the OTC market.
This loss is the greatest when the spot is close to the option strike, and accelerates as maturity approaches (convergence towards intrinsic value, i.e. the terminal payoff). Conversely, a short volatility strategy gains value with time.
Therefore, long vol directional investors are struggling against the clock while short vol investors are not pressed by the countdown to expiry. The former ‘buy’ market volatility while the latter ‘buy’ time on the market. As a result, long vol directional investors generally are more interested in contemplating an early unwind than short vol investors.
