The European Market Brief 30: The Wild World of European Rates Options

Rates are back on the menu, and this time we're diving deep into the wild world of European rates options. Mark Longo is joined by Rex Jones from Eurex and veteran trader and market educator Dan Gramza to explore the European fixed income options landscape—from Bund, Bobl and Schatz options to Buxl, OAT and BTP options. The crew breaks down how European rates markets differ from their U.S. counterparts, where volatility is showing up across the yield curve, and how traders are approaching today's lower-volatility environment. They also discuss short strangles, call and put spreads, condors and other options strategies; country-versus-country opportunities; sovereign spread risk; institutional execution and high-touch trading; Eurex Passive Liquidity Protection; and what could wake up European rates volatility heading into the fall. Plus, Dan explains why low volatility doesn't automatically mean it's time to buy options and shares what he looks for before putting on his preferred three-week short strangle.