📝Low SX7E Vol Seen As Attractive For Directional Trades: Barclays Strategy

For investors who are worried about the assumption of more resilient European economy and/or higher-for-longer rates regime, which is likely a prerequisite for further rally in banks, near decade low levels of SX7E vol present an attractive entry point for directional trades (Figure 11). With the SX7E realised volatility remaining quite low (partly why implied vol is low in the first place), we prefer using option spreads rather than outright calls. Specifically, we suggest SX7E Sep23 117.5-122.5 call spread for €1.15 (30/10d, max payout = 4.4:1, ref: 112.9) - Barclays Derivatives Strategy