As the delta risk reversals of EURJPY have again shown in bearish interests as the progressive increase in negative numbers signify the traction for hedging sentiments for further downside risks in both short and long term.

Accordingly, the yen has been soaring against the euro after a round of modest monetary policy easing from the Bank of Japan disappointed investors in the recent past who had been hoping for at least a hint of more radical stimulus.

Amid the apprehensions on perimeters of the policy arsenal at the ECB and rising euro-centric risks, we recommend maintaining shorts positions in EURJPY for medium term hedging but by capitalizing on every short term upswing, preferably via options during upcoming ECB meetings.

From these risk reversal numbers, am hedging framework can individually be tailored, structured to meet your needs. You can define:

The risk reversal allows for a customized hedging solution, tailored to your risk and hedging profile. risk reversals are OTC derivative instruments and the notional amount does not need to be tied up throughout the full tenor of the trade.

Nonetheless, usual margin requirements still apply. Usually, risk reversals are structured as zero premium hedging solutions.

Currency or precious metal pairs, Tenor, Notional amount, Lower strike, Higher strike, Leverage factor (ratio), Upfront premium, usually zero cost.