FxWirePro: EUR/CHF condor spread suits at the least IV among G10 currency pool

It is going to be either shooting star or gravestone doji as the bears pushing down the day's highs if we have to look at the today's candle. Swiss has produced an upbeat trade surplus numbers on the flip side. The healthy Swiss trade balance has printed at 2.87 billion which is well beyond market analysts' projections at 2.77 billion but below the previous flash at 3.58 billion.

We predict marginal upswings on daily charts with clear converging signals from RSI (14) and stochastic curves. Although there is no trace of drastic or dramatic movements on either side we still sense some sort of upward momentum.

As there are no significant data releases scheduled on CHF side for this week except SNB's quarterly bulletin and for near future EURCHF may likely to experience low volatility in addition. You can make out from the nutshell; EURCHF is to have the least IV.

Currency option strategy through Condor construction: USDCHF

Since the EURCHF's implied volatility is perceived to be minimal, so here comes a multiple leg of option strategy for regular traders of this currency cross when there is little IV. A total of 4 legs are involved in the condor options strategy and a net debit is required to establish the position.

The trader can construct a long condor option spread as follows,

As shown in the figure, the trader can implement this strategy using call options with similar maturities. So strategy goes this way, writing an In-The-Money call and buying deep striking in-the-money call, writing a higher strike OTM calls and buying another deep striking out-of-the-money call for a net debit.