EUR/USD is finding support at 1.3580 session lows. Central banks are likely buyers, as they have been the whole way down. 1.3500 barriers are said to be quite substantial and linked to in-the-money options, so they will be defended very vigorously. That means that if EUR/USD trades below 1.3500 before the options expire, 1.3900 and 1.3600 EUR puts would cease to exist.
Why do traders buy options with knockouts attached? They make them cheaper. Often much cheaper. If your option can suddenly disappear, it is obviously less valuable than one which exists until expiry.
S&P futures trade softer as a hope for a Greek bailout slips further into the ether. We’re 4 points lower at 1075 after being down little more than a point for much of the morning.