EUR/USD: options market keeps the constructive tone

In view of CME Group’s preliminary data for Wednesday, options activity in the E6U7 contract with expiration date on July 7^th keeps leaning towards the bullish side, as traders added 462 contracts to OTM (‘out of the money’) Puts with the majority of strike prices between 1.13 and 1.1350.

Leg higher hinges on ECB

A resumption of the up trend appears likely from this perspective then, as OTM puts rose by 462 contracts vs. a reduction of 343 contracts in OTM Calls, expressing traders’ preference to buy cheap insurance against a potential move against their view.

In addition, the put/call ratio stays at 1.51, giving extra support to the idea that much of the insurance is placed on the sell side.