Dollar Option Bulls Come Out in Force After Payrolls

The options market is gearing up for a bull run in the dollar after February's non-farm payrolls showed improvement in the U.S. jobs picture.

Dollars and Euro
Dollars and Euro

Options traders saw sizeable downside put buying in the EUR/USD, predicting a drop in the euro to as low as 123.50 after the report.

"I guess the theory is that a solid number makes the Fed less accommodative and some new story comes out of Europe," said Jim Iuorio, TJM Institutional Services director.

The bullish bets on the dollar came even as the euro rose and the U.S. dollar index fell marginally following the report.

U.S. payrolls rose 192,000 in February, and the jobless rate fell to 8.9% from 9%. That's the highest payrolls number since May last year, and the lowest unemployment rate in two years.

The bullish stance taken today is in contrast to how options traders were recently playing the dollar.

Before Friday's payrolls data, the option players were setting up for a long, boring year ahead for the buck, selling straddles in the PowerShares DB Dollar Index Bullish Fund, a strategy that is most profitable if the dollar doesn't move much.

Watch Options Actionon CNBC Fridays 5:30pm ET, Saturdays 6a ET and on Sundays 6a ET

Note: Beginning Friday, March 11th Options Action moves to 5p ET

Questions, comments send them to us at:

Latest Video


Host Bio

  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

Options Action Traders

From Our Sponsor

Sign Up for Our Newsletter Options Action

Insight directly from the members of our Options Action panel
Get this delivered to your inbox, and more info about about our products and services.
By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.