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Stoxx Europe 600 banking index up +1.5%
By Gerry Davies || February 13, 2012 at 08:07 GMT
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Can never have too many European bank stocks is what I say 
EUR/USD sits at 1.3258. Seany boy was on the money with the sell orders clustered 1.3265/80, as we topped out at 1.3275 on the first rally attempt.
Talk of EUR/USD buy stops now gathered through 1.3300.
If we could keep price action confined between 1.3200 and 1.3300 for the rest of the morning I’d be right appreciative. If we could stay between those parameters for the rest of the week I’d be eternally grateful 
But I’m not holding my breath….
Large option expiry, a yard, at 1.33
Yes indeed,. Thx Brown Bear, much appreciated
Joe’s looking for it’s magnetism to attract
could you please enllighten a newbie and explain what is an option expiry and how it moves the forex market price?
Hi Roro, One observation noted over the years is the powerful magnetic attraction of market prices to large expiries of so-called vanilla (plain ordinary puts and calls) options.
All things being equal (are they ever?) prices tend to gravitate toward the strike price at the time of expiry.
Why?
Because each side of the trade has to actively hedge their exposure.
Let’s use the example of a $500 mln JPY put/USD call struck at 100.00.
One side has an exposure of $500 mln dollars when the market is at or above 100.00 and the other side has no exposure. At 99.99, the other side of the trade has a $500 mln exposure and the other side has zero. All the jockeying back and forth tends to draw prices close to the strike as each side tries to position themselves for the moment when the option is exercised or expires out of the money.
This action is most noticeable in the run-up to 10 am New York time when the vast majority of options expire.
Thank you verry much mr. Brown