The following FX option expiries are set for the 10am New York cut on 4 September:

EUR/USD

• 1.1700 (EUR 1.78 bn)
• 1.1600 (EUR 3.13 bn)
• 1.1500 (EUR 1.75 bn)

USD/JPY

• 157.00 (US$ 2.19 bn)
• 155.00 (US$ 2.94 mn)

GBP/USD

• 1.3615 (GBP 439.22 mn)
• 1.3500 (GBP 315.47 mn)
• 1.3400 (GBP 304.19 mn)

USD/CAD

• 1.4000 (USD 781.48 mn)
• 1.3800 (USD 1.28 bn)

USD/CHF

• 0.8150 (USD 548.73 mn)
• 1.8050 (USD 313.98 mn)

AUD/USD

• 0.7250 (AUD 737.92 mn)
• 0.7200 (AUD 1.33 bn)
• 0.7100 (AUD 1.19 bn)

NZD/USD

• 0.5900 (NZD 221.69 mn)

What are option expiries?

FX option expiration price levels refer to the strike prices at which option contracts are set to expire. These levels encompass both calls and puts.

When you see "EUR/USD at 1.1600 for €4 billion," it means there is a total of €4 billion worth of options (calls and puts combined) with a strike price of 1.1600, expiring at that specific time — the "New York Cut" at 10:00 AM ET.

Traders monitor these levels because they often act as a "magnet" for price. For example, if nothing else is happening in the market and the price sits close to an expiry level — say 30 to 50 pips away — the price will usually drift toward the expiry level. This occurs because the hedging activity of market makers such as banks and dealers. As the price approaches the strike price near expiration, these market makers must aggressively buy or sell the currency to hedge their risk.

This hedging activity tends to suppress volatility and keep the price "pinned" close to the strike price until the expiration time passes. Once the expiry passes, that pinning effect disappears, and the strikes with the largest notional amounts — such as EUR 3.13 bn at 1.1600 in EUR/USD or USD 1.28 bn at 1.3800 in USD/CAD in today's list — typically draw the most attention from traders watching for this behavior.

Note that in today's data, USD/CHF shows strikes at 0.8150 and 1.8050, an unusually wide spread that readers may want to treat with caution.

Source: ForexLive