EUR/USD options markets biased for correction

CME Group’s data for the 6EU7 contract with expiration date on August 4 showed OTM (‘out of the money’) Puts rising by 2,610 contracts, mainly in the 1.1650 strike price, while OTM Calls rose by 3,211 contracts, particularly in the 1.19 strike price.

Activity from ITM (‘in the money’) Puts showed a marginal increment of 8 contracts and a decrease of 330 contracts in ITM Calls.

In the meantime, the Put/Call ratio stays at 1.08.

Correction lower in the offing

There is no change from yesterday’s view, as activity in the options markets keep pointing to the probability of a squeeze lower, as reflected by the increase of more than 2.6K contracts in OTM Puts vs. a rose of over 3.2K contracts in OTM Calls (these viewed as protection against an unexpected up move).