U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
Wall Street Analysts Weigh in on Latest NFP Data 
Stock Futures Dip as Investors Await Key Payrolls Data 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
China's Refining Industry Faces Major Shakeup Amid Challenges 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Today’s space race could turn fatal if we don’t agree on new rules 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
China’s AI Manufacturing Boom Masks Weak Consumer Economy, Citi Says 
Urban studies: Doing research when every city is different 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
OTC outlook and options strategy:
Let’s glance at above nutshell, the positive shift in risks reversals in 1m tenors that indicates the bullish risks in underlying spot FX prices.
Positively skewed IVs of 3m tenors signifies the interests of OTM put strikes (upto 1.3450) that means the ATM puts have the higher likelihood of expiring in-the-money, while balanced hedging sentiments on either side in shorter tenors that are favorable to both call and put options holders’ advantages.
Bearish neutral risk reversals indicate hedgers still bid for downside risks. ATM IVs are trending between 9.74-10.20% range for 1-3M tenors.
Hence, in order to arrest both upside risk that is lingering in intermediate trend and major declining trend, we recommend diagonal option strap strategy that favors underlying spot’s upside bias in short run and mitigates bearish risks in the medium term.
So, we recommend building the FX portfolio exposed to this pair with longs positions in 1 lot of 1M ATM 0.51 delta calls and 2 lots of ATM -0.49 delta puts of 3m expiries, these options positions construct smart hedging at net debit.
The strategy is likely to mitigate both bullish as well as bearish risks irrespective of spot moves. However, on speculative grounds, more potential is foreseen on the upside. Please note positive cashflows whether underlying spot keeps flying or dipping.
Currency Strength Index: FxWirePro's hourly GBP spot index is inching towards 20 levels (which is bullish). Hourly USD spot index was at shy above -58 (bearish) while articulating (at 08:47 GMT).
For more details on the index, please refer below weblink:
http://www.fxwirepro.com/currencyindex
FxWirePro launches Absolute Return Managed Program. For more details, visit:
