Volumes & Vols spiking off: AUDUSD pair has been the highest IVs to perceive in next 1w-1m among G20 currency segment and is seen at 11.7-12% levels for 1m expiry.

Downside hedging sentiments are still lingering around pair, as a result ATM puts have been trading 23% more than NPV.

More importantly, for AUD, rate compression remains a bearish force for the currency, but in 2016 it will be driven by Fed hikes rather than RBA easing (we think the RBA is done).

The greatest difference, however, is the terms of trade, which we think is bottoming as iron ore prices move within a range and LNG exports rise, thus insulating the trade balance from higher oil prices next year.

By employing vega spreads with 1M At-The-Money vega puts and simultaneously short 4D ITM puts with positive theta values for net debit.

Considering the above aspects, on speculative grounds we recommend go long in one-touch binary puts on every rise in our strategy in order to extract leverage on extended profitability, targets around 25-30 pips.

The prime merits of such one touch option are high yields during high volatility plays. Wider spreads indicates lack of liquidity. The spreads for one touch AUD/USD options are constant time and barrier levels.

Usually, such binary options for every change in 1 pip the relative change in option price 0.01% or even exponential at high implied volatility times. You can see that in charts how every dips would propel Vega effects.