For risk-averse, a 2m digital put strike 1.0750 KO 1.0450, This cheap option (costing 11% at that time) is now in the money and will expire right after the December Fed meeting (already priced). Though a scenario of further euro downside would be gradual, the risk of hitting the barrier is much higher post-Trump’s election.

For positional traders Reverse Put Spreads are recommended: We see option writers would be on the competitive advantage as you could probably make out from the nutshell showing implied volatilities of ATM contracts of 1w expiries are considerably reducing comparing to the longer tenors The dollar has surged again, the dollar gains come from three fronts, they are: rising crude prices, Trumps robust fiscal policies favouring dollar strength and healthy set of economic numbers.

As a result, we’re now seeing turbulence in euro’s OTC markets, the implied volatility of ATM contracts for 1w and near month expiries of EURUSD are spiking sky rocketed at around 15% and 11.8% respectively which is the highest among G7 currency space.

While delta risk reversals flashing up progressively with positive numbers that signify hedging arrangements for upside risks over 1 week’s time, while long-term robust bearish sentiments remain intact.

Hence, 1w/2m reverse put spreads with strikes 1.07/1.0/1.0650/1.06 in 2:1 ratios, the option structures resembling these types with longer tenors are also encouraged.

Buying digital puts for aggressive bears: This trade is a vanilla 6m European digital put with a strike at 0.97. This option likely to deliver its notional amount if EURUSD trades below this level at the expiry, a pay-off of nearly eight times the premium amount. It can be replicated by a very tight put spread and is, therefore, taking advantage of the high skew.